To begin with..I must acknowledge that the 4th panel discussion on raising and leveraging private equity/venture capital today at PE Insights summit, was one of the best panels that i have attended in a long time..and i am sure the feeling is mutual for everyone who was with me in the audience, what with the panel stretching to 2 hours. What I liked about the panel I have summed up here for all those entrepreneurs who could not attend .
Kanwaljit Singh,MD,Helion Ventures (one of the brightest and most self effacing VC i have met) raised a very pertinent point which every entrepreneur should ask "Why" and "When" do i need a VC? This question becomes pertinent especially in our country where investments are less then 1 percent as compared to the deal flow. Also what if you don't get VC investments..do you have a plan B? Another key consideration for an entrepreneur should be the kind of Investor you get on board - Do you want someone who appreciates business building, participates in your business development alongwith you or is just a financial engineer? Is an Investor going to be for the governance or value add or just be a nuisance?
Sanjay Nayak, CEO and MD, Tejas Networks brought in the entrepreneur's perspective - Entrepreneurs should not solely focus on the kind of equity dilution or valuation they get, as long as you have the conviction in your business and the right Investor comes and is ready to help you grow your business its ok to partner. At the end of the day if your pie becomes very big, its a win-win for everyone."
Also Sanjay emphasised on the need to be transparent/honest and open to all your stakeholders, drawing from his own entrepreneurial journey, Sanjay said, "from the very beginning i was open with my prospective investors and this helped me get the best investors on board, at the end of the day..a VC is as passionate to grow your business as you are." On being asked when is the right time to raise money?Sanjay replied, "As early as possible" (which got a huge applause from the audience)
Ganesh K, Founder and CEO, TutorVista,who has successfully raised multiple rounds of money and has 4 successful ventures to his credit, highlighted the need to be clear as to what business entrepreneur you want to be - do you want to go for an IPO, monetize, go for a buyout or just pursue your passion or just be in the lifestyle domain? As long as you are clear where you are headed, you can accordingly have your game plan." Drawing from his own journey, he shared an interesting info with us..while he was planning to launch TutorVista in US, he knew what kind of investor he wanted and why.Ganesh said, "Consumer Internet business is not easy, especially when you are entering a US market and asking them to shell out 100 dollars for your services..we knew we needed a marquee investor..an entrepreneur "Ganesh" with his background is good but he will not bring credibility in an overseas market where you are asking for money..but a name like Sequoia at that point of time, did give us the added push. The need from a business perspective was clear.. a marquee investor and so we went with Sequoia though we were getting better valuations from some other investors".
On a lighter note Ganesh said, "To get an investor you have to appeal to their Greed" the higher the appeal to their greed the more your chance of getting them on board. Also getting an investor is like a mating business.. the more your sex appeal the higher gets your chance of getting them, valuation etc can always be worked on once the intent is there."(ofcouse all this had all of in the audience completely enthralled)
There was much more meat in the discussion but i could scribble only this much:) Hope it gives you some perspective. While i am at it, i thank Karthik from PE Insights once again for organizing the engaging summit and having us as Online partner.
Look forward to hearing from you
please do write to me at firstname.lastname@example.org