Elevate 2019: Ex-entrepreneurs are changing the perspective of the investment community

In the panel on ‘Investment landscape and its impact on startups and investors’, conducted as a part of Elevate Karnataka 2019, investors talked about what is happening in the space, how should entrepreneurs and investors need to work and more.

In the last few years, the investment landscape has seen a shift from the service sector to the product sector.

“Until a few years back, service sector or IT was the major focus for investors. Today, the service sector is slowly vanishing. Today, each sector in the product space gets a separate set of investors. There are VCs dedicated to each sector today,” says A. R. Jayakumar, CEO, KAMCO.

Adding to it, Ashok Mishra, VP of ASIC-BU for Alten Calsoft Labs, also an ex-entrepreneur, shares stories from his entrepreneurial days when the frequently asked question was whether they were in IT/software.

Ashok says that it was then very difficult to get investment for hardware startups.

Today, it is the availability of funds to each sector that makes it successful. Many new tech horizons have come up now, especially in the space of IoT and Blockchain.

“It has come to a state now that if the VCs find your startup innovative, then it will get funded.”

What do investors bring to the table

“It is the job of entrepreneurs to make their vision easy to understand to the investors,” says Samir Kumar, MD of Inventus (India) Advisors.

He added that entrepreneurs knows their vision and startup 25X better that the investors.

According to Ashok, the current investment community consists more of former entrepreneurs, bringing in a different perspective to the table.

It is important for any startup to convince investors that a startup will be able to make money in the next five years. The investors are there to make money.

“Entrepreneurs and investors need to work together to understand and create value to a startup,” says Samir. Coming from a investor background, he makes it clear that the investors don’t want to run a business.

Overseas investment

Keeping aside big investment firms such as Y-Combinator, Samir states that most VCs are not likely to go and invest far away from where they are located. It will be less likely to be successful.

To add to it, Ashok says that most global investments are done from India today. There seems no need to go abroad and invest there.

(Edited by Saheli Sen Gupta)