For developing entrepreneurship in India, we have to stop promoting only technological entreprneurship. Where ever we see there is Venture Capitalist he or she is more willing to fund technological innovations rather than to good or great ideas. In my view if we want to develop entrepreneurship in India than we must have to stop attaching entrepreneurship only with technology instead good ideas in field of marketing, Financing and services etc. If any one starts a new marketing firm or new bus service or a warehouse in his or her city or village will be of equal help to the economy like any one starting a mechanical factory.

It is not that only technological innovations can help economy. Main focus should be on the idea and how much we can rely on the idea. There was one person who used a piece of bun added some vegetables to it and we got BURGER. One man was selling flavoured supari and tobacco on cycle, he went on to set up PAN PARAG, There was one man who wanted to see the call rates drop to the cost of post card, we got RELIANCE INFOCOM.

Undoubtedly there are purely indigenous opportunities in India not being developed, but most of the US transplants are legitimate value additions and will have a potential among India’s urban consumers. Consumption and lifestyles of India’s emerging middle class will not be that different from the US. I suppose most VC’s are like most entrepreneurs anywhere - go for the low hanging fruits first.

I am convinced that most of the Venture Capitalists (VC’s) and Private Equity (PE) Funds are doing a Me-Too Job or behaving like heard mentality, without adding much value to Indian Entrepreneurship.

Lot has been written about changing land-scape of India’s corporate world, courtesy advent of new animal called VC’s / PE funds, who support a new technology / emerging company or sun-rise industry. However, a close scrutiny, reveals a different story.

Most of the VC’s / PE funds in India are from American Origin, namely 2 prominent cities i.e. Menlo Park, CA and New York City, NY. They follow a very stereo type funding pattern, which I call a courier job. It is heartening though, that Indian subsidiaries of USA based VC’s / PE funds are headed by Indian, who has studied or worked in USA. So, there is a direct India linkage, but in reality, none of them (The Indian Partner, CEO or the India Boss) is able to finance or Venture into a space or industry if that has no reference point in USA (means the Industry, Sector never funded before).

The case in point is startling. Travelocity / Orbitz and Expedia has been funded in USA, thus Good amount of money has been poured into Travel sector in India as well like TravelGuru / Yatra / makemytrip.com etc. Any intelligent person would know that this is a crowded space and margin is not more that 3-5% max, so why so much money is chasing so many players ? Simple, India Operated USA based VC’s / PE does not want to work hard or take chances. If this sector has worked in USA, they feel it will work in India as well, hence the rush..

Another good example is Real Estate. Every PE Funds, worth the salt, is putting huge bet on Real Estate thus we see Raheja’s / DLF , Hiranandani’s are raising over 100 Million in last 12 months. Again, no brainier as this sector has worked in Western Word.

So, the so called intelligent people running these VC / PE funds are just doing courier job. They are not adding value or creating wealth for India lest we could have seen some investments in Insurance Broking & Distribution ; Finance ; Mobile Distribution ; Web Marketing ; Car Distribution etc.

M

In India, if a first generation entrepreneur hits it off, good for her. Or else, it’s headlong ruin or worse, it would mean starvation.