galatime.com - Kaushik Gala

Note: The views & opinions expressed in these essays are strictly my own, and not those of any entity I may be associated with as an employee, consultant, promoter, investor, etc.

ARCHIVES

 

Pune

› Technology Venture Investors in Pune

 

Technology Entrepreneurship in India - Teams

› Entrepreneurial traits

› Picking cofounders

 

Technology Entrepreneurship in India - Generating Revenue

› Is your business model well-defined?

› Your industry's value chain

› What is your value proposition?

› Which distribution channels will you use?

› Who will drive business development?

 

Technology Entrepreneurship in India - Raising Capital

› Venture capital & venture capitalists (VCs)

› Corporate venture capital

› Angels & angel networks in India

› Government support for Indian startups

› Proof-of-concept funding

› Do you need a business plan?

› How much money should you raise?

› Startup valuation

› Pitching to investors

› Figure out the term sheet

› Negotiating with investors

› Due diligence - A necessary evil

› Time to sign the investment agreements

 

Equities, ETFs, F&O

› Oct 2011: Equity Risk Premium for India

› Jun 2011: Investing in Indian equities

 

Technology Enterprises in India

› Nov 2010: Technology investment in India - WATER

› Aug 2010: Technology enterprises in India - 3 avatars

 

Risk Capital for MSMEs

› Mar 2010: Risk mitigation for investors in MSMEs

› Mar 2010: Why don't (Indian) MSMEs get risk capital?

› Feb 2010: Angel investing - Will it work for Indian MSMEs?

› Feb 2010: What's so special about innovative MSMEs?

› Feb 2010: Where do Indian/NRI (V)HNIs invest?

› Feb 2010: Funding options for innovative MSMEs in India

› Jan 2010: Innovative MSMEs in India

Venture capital & venture capitalists (VCs)

(Last revised Mar-2012, Send comments to galatime@gmail.com)

Although most technology entrepreneurs are aware of venture capital firms, they do not always know how to pick the right one. Fewer know the importance of picking the right partner within the firm. And fewer still know what makes a good VC.

This is due to an asymmetry: entreprenenurs interact with only a few VCs, while VCs interact with numerous entrepreneurs. Thus, VCs are able to hone their pattern-matching skills and abilities to pick the 'best' founders. Founders, on the other hand, need to put in quite a bit of deliberate effort to identify great VCs.

So, what should you look for in a venture capitalist?

  • Deep operational experience and skills, in technology development and/or business development
  • Good reputation amongst entrepreneurs whom the VC previously funded - both where money was made and where money was lost
  • Part of a firm known to be entrepreneur friendly (in term sheets, recessionary environments, executive hiring)
  • A tendency to counsel, not control; motivate, not micro-manage; incentivize, not impose.

Perspectives