The Venture Intelligence Blog

Y-Combinator founder Paul Graham thinks so. Citing the example of uber angel investor Ron Conway (Google, Facebook, Twitter), he explains why in his recent blog post  (emphasis mine): The startup world became more transparent and more unpredictable. Both make it harder to seem good without actually being good.  It's obvious why transparency has that effect. When an investor maltreats a founder now, it gets out. Maybe not all the way to the press, but other founders hear about it, and that means that investor starts to lose deals.  The effect of unpredictability is more subtle. It increases the work of being inconsistent. If you're going to be two-faced, you have to know who you should be nice to and who you can get away with being nasty to. In the startup world, things change so rapidly that you can't tell. The random college kid you talk to today might in a couple years be the CEO of the hottest startup in the Valley. If you can't tell who to be nice to, you have ...

Mukund Mohan of Microsoft Ventures has a numbers-based post on the probability of funding and the equity dilutions Indian entrepreneurs face depending on whether they go to an Accelerator first versus VCs and Angel Investors. The first scenario for you, the entrepreneur, is to get funded directly by a VC . The chances of that happening in India are low – 1.4%.  The other challenge is that those companies got relatively poor valuations (average about $1.4 Million pre money). Only 19 out of 1300 entities got funded last year to raise their series A through a VC directly. In this case you will possibly dilute 30-40% and still own >60% of the company . I have used 30% dilution in the chart below. The second scenario is to get angel funding and then in 18 months get VC funding. The chances are better that you might go through this scenario (2X more – 43 companies got angel funded last year), and then venture funding. You will end up owning 56% of your company (by g...

Dear Colleague, In 2004, the buzz around one mega exit - of Private Equity investor Warburg Pincus from Bharti Airtel - got institutional investors across the world excited about the Indian Private Equity opportunity. Naturally, there was a boom in PE fund offerings from India- typically focused on minority growth capital type investments - to cater to this rising appetite. And billions of dollars flowed in search of the next big Bharti. Now, in one forum after another, these investors - "Limited Partners" (investors in PE/VC funds, LPs for short) - have been hyper critical of Indian PE fund managers for their lacklustre returns. Indian PE sure seems to have hit rock bottom. Is There Hope? Admidst a lot of skepticism, the BSE Sensex was the best performer among emerging markets (aka BRICs) in 2012 after being the worst performer in 2011. Recent months have seen MNCs from Europe to Japan and, of course, the US -  in their almost desperate search for gro...