IIMA’s Leverage 2009: The Private Equity and Venture Capitalists conference began today with House-full “Mentoring Café” sessions organized by the esteemed faculty of IIMA. The sessions were held specially for entrepreneurs and were conducted by Prof. Raghuram (Services, Logistics &Operations), Prof. P. K. Sinha (Strategy & Marketing)and Prof. Ajay Pandey (Strategy & Finance).
The sessions were quite interactive as entrepreneurs asked questions ranging from value creation, service providing, financing to making a sales pitch. Prof. Raghuram commented that “there’s considerable opportunity to increase the service level at each point in the Indian context”. He talked about various ways in which basic services – courier delivery – and special services – call centers – can be improved to garner more customer satisfaction. Prof. PK Sinha commented that it is paramount that the values of customers be in sync with the value provided by the company. He said “business values have a limited life, but consumer values are eternal”. Prof. Pandey warned the entrepreneurs to not make a pure sales pitch to possible investors when showcasing a business plan. He said that overplaying the upsides and underplaying or ignoring the downsides forces the investor to carry due diligence and bear costs, thereby creating a bad impression of the entrepreneur. He also talked about the current market situation where funds have dried up, and commented that there are ways to counter it, which is certainly not easy.
The inaugural session of Leverage 2009 kicked off with the opening address by Prof B. H. Jajoo’s , Dean IIM-A. Prof. Jajoo applauded the efforts put in by students to organize the event and underlined the importance of entrepreneurship in the current economic turmoil. The event with theme “Venture Capital and Private Equity: Investing and Managing Portfolios in Distressed Times” consists of a business plan showcase event and high profile speaker series. The inaugural session marked the release of the first magazine on Venture Capital and Private Equity, Leverage. Prof Jajoo highlighted the exponential growth of Private Equity in the last few years and the importance of an event like Leverage in the current economic uncertainty. Prof Rakesh Basant highlighted the role of CIIE and its activities which has the core idea of linking teaching, research and incubation. CIIE has been instrumental in supporting around 15 companies on the verticals of health, clean energy and information technology. Prof. Basant explained the organic linkages between CIIE and IIM A and the involvement of faculty and students with CIIE activities.
The first guest speaker of the day was Mr. Kanwal Rekhi. Mr. Rekhi, the cofounder of Inventus Capital, widely referred as “The Legend from Asia”, delivered a lecture on “Entrepreneurship in Hard Times”. Mr. Rekhi suggested that recession is the best time to be an entrepreneur. He explained that in current environment, jobs are scarce, resources are cheap. He clarified the misconception that funding is impossible in current scenario.
Mr. Rekhi encouraged the youth to lead from the front. He stated, “Society needs a fine balance of discipline and indiscipline, of stability and dynamism”, and then explained how entrepreneurs are essential, along with managers for the prosperity of overall society. The west, especially the US has enjoyed a very fine balance and thus exhibits a great potential for entrepreneurs and business managers.
Mr. Rekhi also hinted at the importance of innovation required to be a successful entrepreneur. He described his success story about how he, along with two other partners, developed innovations in TCP/IP connectivity to capture the huge market of distributed personal computers at Silicon Valley. After returning back to India, Mr. Rekhi realized the need to encourage entrepreneurs. He wanted to provide some help, develop role models, and create a platform for entrepreneurs to come forward. This led to the establishment of Inventus and the rest is history. He concluded by urging the youth to give themselves a chance to succeed. “It’s up to you to give yourself a chance, else no one would ever know, what you could achieve”, he said.
The second speaker for the day was Mr. Mohanjit Jolly, Executive Director of Draper Fisher Juvertson, India. He is an alumnus of Anderson School of Business Management, UCLA. He started off on a lighter note with taking a dig at VCs saying, “I will let you in on a secret. Most VCs would tell you in confidence that VC money is the last resort you should take after borrowing, begging and stealing; simply because VC money is very expensive!”Mr. Jolly shared nuggets of his experience from over thousands of pitches he has heard as a Venture Capitalist and emphasized on ten most common mistakes an entrepreneur should learn from and never make while presenting his/her proposal.
A common mistake budding entrepreneurs make, said Mr. Jolly, is believing there is no competition. He also said that young entrepreneurs very often complain that VC funding is a huge vicious cycle. Complaining is the last thing one should do, he said. One should embark onto building a credibility continuum. There were two important must-dos he recommended for impressing the VCs. First, you must have a very good team that can work well together and second, take the help of professionals when it comes to legal counsel, accounting and other such functions. “A divorce lawyer handling your company’s legals is a sure-fire red flag for any VC”, he said. He concluded saying that, “You should look infectious; the other person must think once that he is going to make it big”.
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