Hardeep Singh
The global pandemic came to light a plethora of pre-existing problems for businesses all around the world, along with an air of unpredictability. In such an environment, doing nothing was a sure-shot way to become obsolete, whereas learning from those companies that negotiated the market well to emerge stronger and more resourceful would be evolutionary. It is a good choice to learn from Venture Catalysts because of the ways in which it has been transformative during the pandemic, bringing about a clear democratic shift in the operating ecology of start-up companies. Venture Catalysts is the first comprehensive incubator in India, with diversified portfolios ranging from around $150,000.00 to $1.5 million. In the jargon of venture capitalists, early-stage startups have limitless potential that must be tapped to create substantial value.
Therefore, they invest judiciously in pre-seed, seed, and pre-series A rounds to enhance the growth of startups. Currently, they have surpassed 207 investments in over 178 distinct startups and continue to do so. In addition to BharatPe, Zingbus, HomeCapital, Beardo, SuprDaily, Fynd, Innov8, PeeSafe, IGP.com, Couloot, and BlowHorn, their portfolios are worth over $5 billion.
It is interesting to note that collaborative decision-making is embodied in the organization’s investment committee, which is comprised of former venture capitalists, seasoned owners of hedge funds, freelancers who have a flavour of having exited from significant start-ups, and core investment bankers. They evaluate more than 700 business ideas for start-ups every single month. Venture Catalysts invests in approximately 100–150 start-ups each year, which represents fewer than 2% of the start-up companies that are evaluated each year after being shortlisted and evaluated for potential. The stage of ideation is more intimately tied to a variety of factors, including the competencies of the company’s founders, the appeal of the sectors, and the novelty quotient. The product-market fit should be a top priority for the subsequent seed fund stage as well as the pre-Series A stage. One thing, however, that does not change is the fact that, at the end of the day, the founders are a significant pivot for any venture capitalist to consider when making a choice on whether or not to make an investment.
An ecosystem for start-up businesses has always benefited significantly from locally-born individuals’ ventures into global thought. Any such ecosystem’s defining characteristics and boundaries are correlated with the adaptability of the businesses functioning there. An active, participatory ecosystem that is led by actors and players fosters the system’s local dynamics and innovation potential.
Early on, the core Venture Catalysts team discovered that while capital investment opportunities were more prevalent in tier-II, tier-III, and beyond cities, more than two-thirds of start-ups were headquartered in major Indian cities like Delhi, Hyderabad, Bengaluru, Mumbai, and Chennai. In an attempt to break the mould, it established facilitation centres in less developed towns with growing infrastructure, such as Surat, Raipur, Dehradun, Kanpur, and Lucknow, and began educating potential investors on the chances for high returns offered by start-up investments. Thus, a chance was taken advantage of starting the democratization of the start-up ecosystem.
Democratising the start-up ecosystem in pandemic times
The explosion of incubators and accelerators in tier-II and tier-III cities and beyond is unparalleled. According to available data, a start-up’s chances of receiving funding rise thrice after joining an incubator or accelerator. India appears to be mimicking the trend that has been observed in the United States, which is currently the world’s leading startup nation. These angel investors in tier-II, tier-III, and beyond cities are gradually recognizing the high-return prospects in startup financing. The movement from larger cities is an indication that local startups should seize the opportunity. Planning their start-ups in their home city and taking advantage of the cheap cost of talent acquisition and operating expenses enables them to achieve profitable returns in a shorter amount of time.
Democratization has therefore produced an environment that makes it possible for more investors to investigate high-return asset classes, which has resulted in the creation of enhanced performance opportunities and has driven competition among venture capitalists in the market about improving start-up valuations. It is widely accepted that thriving new businesses are essential to the growth of an economy. As a result of these businesses’ efforts, the nation reaps a wide range of socioeconomic benefits, including the generation of new employment opportunities and the development of innovations with commercial potential. In line with this train of thought, Venture Catalysts has been successful in democratizing the start-up ecosystem by cultivating a network of more than 5,000 angel investors in India’s odd cities, the majority of whom hail from tier-II and tier-III locations.
Leader’s foresight
In the middle of things, Venture Catalysts finds itself, with a colossal, invested number of more than Rs. 500 crores by itself and having surpassed the $1.2 billion record in total value for all portfolio companies. The business was fuelled by the ability to see a future where the start-up ecosystem would be opened up to more people. Today, Venture Catalysts is the leader in start-up investments and incubation because they opened the start-up ecosystem to more people in turn democratising it. The future of entrepreneurship in India appears bright thanks to ongoing improvements in the internet infrastructure, streamlined access to capital, and rising consumer buying power.
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About Author: Prof (Dr) Manoj Joshi
Dr. Manoj Joshi, is co-Author of “The VUCA Company”, “The VUCA Learner”, “VUCA in Start-ups” and “Role of Business Incubators in the economic growth of India”. He is a Chartered Engineer and currently a Professor of Strategy & Entrepreneurship and Director, Centre for VUCA Studies, Amity University. He is the Regional Editor India, JFBM; IJSBA and an editorial board member for journals like APJM, JSBM, BSE, JEEE, WRMSED etc.
His consulting includes VUCA strategy, travelled extensively with over 32 years of experience in areas of Screw pumps Design, Heat Exchangers, Loading Arms, consulting, research and teaching. He has a deep interest in dark matter, dark energy, astral travel, travelling to woods and life after death.
