Why organising data is crucial for startups to attract more capital from private markets

In a fireside chat on day 2 of TechSparks 2021, Ravi Ravulaparthi, Co-founder and CEO, Qapita Fintech, and Sateesh Andra, Founding Partner, Endiya Partners, discussed how private markets offer a big wealth creation opportunity.
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"Organising data creates greater transparency, and will attract more investors from private markets to invest in emerging companies," said Ravi Ravulaparthi, Co-founder and CEO of Qapita, on day 2 of TechSparks 2021, Asia's largest and most influential startup-tech conference hosted by YourStory.

With the theme 'What's Next: Rethinking the future'TechSparks 2021 is providing a platform for the most defining conversations on how disruptive technology innovations can shape our lives post-pandemic.

“Organising data is beneficial for people to invest into this sector,” Ravi said, during a fireside chat on 'Private markets: a multi-decade, multi-billion-dollar wealth creation opportunity'.

Currently, data about private companies is limited, compared to public companies, he added. Qapita Fintech's software platform helps startups in managing their capitalisation tables and ESOPs accurately for founders to engage better with stakeholders.

“The transparency benefits all stakeholders of a company because it solves the problem of existing investors, incumbent investors, or employees who want to have some kind of liquidity, as well as potentially attract new investors into the company itself,” explained Sateesh Andra, Founding, Partner, Endiya Partners, a venture capital fund.

“It induces confidence in people when they are making the decisions,” he said.

The future of startups offers a lot of opportunities for wealth creation in India, not just for founders, but also investors and employees. In 2021, India has seen more than 30 startups turning into unicorns in India.

“This will be a $1 trillion to $1.5 trillion economy, creating hundreds of thousands of jobs, and that means hundreds of thousands of owners of private companies as well,” Ravi told Manasi Phadnis, Senior Anchor, YourStory.

“There will also be employee-owners of companies, as most of these companies will have equity compensation plans," he said. "So, a substantial amount of wealth is going to get created and distributed through this sector.”

India's private markets are drawing the attention of venture capitalist and private equity investors globally because of how they are driving innovation. Tech startups tap available capital to build and deploy solutions from India, which has a large talent pool of engineers. “Capital chases opportunities,” Sateesh said.

India also is a large market with a population of 1.4 billion people. Proactive government regulations, improving access to capital, and the possibility of exits are spurring the growth, he noted. “Exits play a huge role. They catalyse the whole ecosystem because they complete the loop.”

Sateesh however pointed out that access to private markets is limited. “You do not have democratic access like the stock market,” he said, adding that even angel investors have difficulty in attracting startups.

“So, the options are fairly limited, but there is humongous appetite and demand from individuals, while fully being aware of the risks because these are private companies,” Sateesh said.

Ravi said that substantial amount of value creation happens before a company becomes a public company. For these investment opportunities to be democratised and to be available to a wider set of people, Ravi pointed out that Ravi pointed out that technology can enable access, transparency, and efficiency.

Technology can play a role in getting a wider set of people access to this kind of wealth creation. The transparency comes from data, and efficiency comes from systems, he added.

“Companies are also creating this value. They are actually giving access to a wider set of employees to have ownership in the company,” Ravi said.


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Edited by Kunal Talgeri