I was talking to a friend recently on the problems of early-stage investing in tech companies India:
- lack of serial/successful entrepreneurs whom investors can bet on
- limitations of the digital (Internet and mobile) marketspaces (in terms of revenue opportunity) in India
- dearth of risk capital (from angels and VCs)
- not enough mentors to guide early-stage companies through the challenging initial years
- poor digital infrastructure (broadband, 3G) which limits scope in the domestic market
In this context, it is no surprise that the whole investment cycle has shifted: angels act like VCs, VCs act like PEs and PEs like banks. There are many entrepreneurs who start off, but end up in struggle because of limited capital. So, can something be done about this?
I will outline an idea tomorrow.