Dear Mr. Murthy,
Thank you for your noble work of starting a VC fund for India and Indians, however as a probable investment seeking entrepreneur (am awaiting to be funded for the past 2 years after innumerable presentations and demos and VC meetings and all) I would like to highlight the following points to your goodselves which I hope you will consider and not negate like the rest of VCs or shall I say “Vulture Capitalists!”
1) Product / Service should be a niche and not generic – Who say generalist ideas do not work? If we have 7 million SMEs to serve, why can a SME related product not succeed? Why does a product which has day to day use not succeed if backed with proper innovation, research, service, support and ready customers? All VCs just want to focus on the Niche, they just want something which no one else has done before and if they get a generalist – they just say, “its too crowded”, “not our fund focus”, “we are already full with our investment portfolio”, “we will refer you to someone else or some other fund” and all bla bla bla….With this negative attitude good companies are being left behind. No one encourages, no VC funds a company or an entrepreneur who says “I have a plan to make a better OS than Windows?” Why is such an idea not funded? Why is such an idea not allowed to be groomed? Is Windows the end? Is it the ultimate thing on this planet? Why don’t VC’s allow entrepreneurs to take risk? Why this hype and hoopla on all this niche and stuff? Why not fund generalist companies with unique model and mass appeal?
2) Customers should be well known and if possible branded – If there is a product focusing for example on the Indian SME, how will that customer be branded or well known? If they were that well known will they not be branded? Just think about this! I request you, Sir to focus on companies who have customers, invest in real running sweat and blood companies and not just paper companies with an idea or a concept. VCs here do not even talk to companies who have meager sales, reason being they do not have branded customers. How the hell does a small time entrepreneur get branded customers without proper support and capital? It’s a chicken and egg situation and not one which anyone wants get into !!!
3) You have to be in the Sexy area or be the blue eyed entrepreneur for the Funder – Like for example, if you are going to build a software product which competes, for example with Google or SAP or Microsoft – No VC will even touch you in today’s world! Reasons? Competition is too stiff, you can’t beat Microsoft…You can’t beat Google etc. The so called Angel funding or risk capital funding is missing from our country. Mr. Murthy, please consider funding companies who have the hunger and commitment to take on the world. Please consider funding companies who will make the west sit up and take notice, buy our genuine products and services and not just purchase our time and effort and pay us for that. Let’s become more tangible rather than being intangible and service oriented. Let’s get aggressive. Rather than all company profiles being shown as a Microsoft Partner or a SAP Partner or an IBM Partner. Let it be the reverse with western counterparts claiming they are partner to such and such Indian company. That’s when we can say we have arrived, that’s when we can say its “MADE IN INDIA!”
4) Plain Jane Idea companies given a choice over running enterprises – Most VCs don’t like balance sheets which are small in size, sales which are less or are bleeding. It’s our experience that they will fund an idea more than an existing running poor setup. Please consider companies with an existing set-up, or bleeding set-up as these are the entrepreneurs who have the guts to run things on their own by putting in their own capital. A person who can risk his personal wealth is a sure shot bet to succeed and manage the investors’ wealth better.
5) Presentations / Business Plan Summaries in those killer 10 slides – This has been the worst experience for me. All investors ask for presentations of 10 slides, 200 words, 1 slide on product, 1 slide on financials, 1 slide on team etc etc. I agree that if they are checking 100s of proposals they should have a common format to make the process simple. So have a common format but why the cap on the number of slides? If you read 10-15 more slides will heaven fall on us??? How do we explain a multi vertical and horizontal Software Product in 2 slides? How do we show and convince you on the feasibility of a product huge and complex like an enterprise wide solution, an ERP or a Business Operating System? How? I would request Mr. Murthy to please allow the Entrepreneur to speak / write his heart out. Give a format but do not cap on the slides / words etc. I mean, how can you decide to invest in someone in 2 minutes? Is it a gut feeling or whatever? Investment is like a marriage; do you deicide to marry someone in 2 minutes even if your gut says it? Does love at 1st sight work in today’s so complex materialistic world? 1 or 2 off-hand meetings and you decide the worth, fate, future of that company / entrepreneurs? How?
6) Herd Mentality Investment – When DOTCOM was in, all VCs invested into dot coms. When Social Networking, Mobile Advertising, Green Technology is in – all are investing into it. Who will invest into companies thinking out of the box? Why does a VC not encourage someone who thinks against the current? Why does everyone just want to play safe? WHY?
Mr. Murthy, I humbly hope you will consider my letter and have a human touch so that the right Entrepreneurs, Companies and Products / Services are funded to take INDIA to the next level!!!
Whatever you decide, Mr. Murthy keep in mind millions of enterprising Indians are looking forward to your help and support as always. Like you created Infosys we hope you create your VC fund as a benchmark in the Indian venture investment landscape. We all are waiting, all of us – INCLUDING ME 
Dear Mr. Murthy,
Thank you for your noble work of starting a VC fund for India and Indians, however as a probable investment seeking entrepreneur (am awaiting to be funded for the past 2 years after innumerable presentations and demos and VC meetings and all) I would like to highlight the following points to your goodselves which I hope you will consider and not negate like the rest of VCs or shall I say “Vulture Capitalists!”
1) Product / Service should be a niche and not generic – Who say generalist ideas do not work? If we have 7 million SMEs to serve, why can a SME related product not succeed? Why does a product which has day to day use not succeed if backed with proper innovation, research, service, support and ready customers? All VCs just want to focus on the Niche, they just want something which no one else has done before and if they get a generalist – they just say, “its too crowded”, “not our fund focus”, “we are already full with our investment portfolio”, “we will refer you to someone else or some other fund” and all bla bla bla….With this negative attitude good companies are being left behind. No one encourages, no VC funds a company or an entrepreneur who says “I have a plan to make a better OS than Windows?” Why is such an idea not funded? Why is such an idea not allowed to be groomed? Is Windows the end? Is it the ultimate thing on this planet? Why don’t VC’s allow entrepreneurs to take risk? Why this hype and hoopla on all this niche and stuff? Why not fund generalist companies with unique model and mass appeal?
2) Customers should be well known and if possible branded – If there is a product focusing for example on the Indian SME, how will that customer be branded or well known? If they were that well known will they not be branded? Just think about this! I request you, Sir to focus on companies who have customers, invest in real running sweat and blood companies and not just paper companies with an idea or a concept. VCs here do not even talk to companies who have meager sales, reason being they do not have branded customers. How the hell does a small time entrepreneur get branded customers without proper support and capital? It’s a chicken and egg situation and not one which anyone wants get into !!!
3) You have to be in the Sexy area or be the blue eyed entrepreneur for the Funder – Like for example, if you are going to build a software product which competes, for example with Google or SAP or Microsoft – No VC will even touch you in today’s world! Reasons? Competition is too stiff, you can’t beat Microsoft…You can’t beat Google etc. The so called Angel funding or risk capital funding is missing from our country. Mr. Murthy, please consider funding companies who have the hunger and commitment to take on the world. Please consider funding companies who will make the west sit up and take notice, buy our genuine products and services and not just purchase our time and effort and pay us for that. Let’s become more tangible rather than being intangible and service oriented. Let’s get aggressive. Rather than all company profiles being shown as a Microsoft Partner or a SAP Partner or an IBM Partner. Let it be the reverse with western counterparts claiming they are partner to such and such Indian company. That’s when we can say we have arrived, that’s when we can say its “MADE IN INDIA!”
4) Plain Jane Idea companies given a choice over running enterprises – Most VCs don’t like balance sheets which are small in size, sales which are less or are bleeding. It’s our experience that they will fund an idea more than an existing running poor setup. Please consider companies with an existing set-up, or bleeding set-up as these are the entrepreneurs who have the guts to run things on their own by putting in their own capital. A person who can risk his personal wealth is a sure shot bet to succeed and manage the investors’ wealth better.
5) Presentations / Business Plan Summaries in those killer 10 slides – This has been the worst experience for me. All investors ask for presentations of 10 slides, 200 words, 1 slide on product, 1 slide on financials, 1 slide on team etc etc. I agree that if they are checking 100s of proposals they should have a common format to make the process simple. So have a common format but why the cap on the number of slides? If you read 10-15 more slides will heaven fall on us??? How do we explain a multi vertical and horizontal Software Product in 2 slides? How do we show and convince you on the feasibility of a product huge and complex like an enterprise wide solution, an ERP or a Business Operating System? How? I would request Mr. Murthy to please allow the Entrepreneur to speak / write his heart out. Give a format but do not cap on the slides / words etc. I mean, how can you decide to invest in someone in 2 minutes? Is it a gut feeling or whatever? Investment is like a marriage; do you deicide to marry someone in 2 minutes even if your gut says it? Does love at 1st sight work in today’s so complex materialistic world? 1 or 2 off-hand meetings and you decide the worth, fate, future of that company / entrepreneurs? How?
6) Herd Mentality Investment – When DOTCOM was in, all VCs invested into dot coms. When Social Networking, Mobile Advertising, Green Technology is in – all are investing into it. Who will invest into companies thinking out of the box? Why does a VC not encourage someone who thinks against the current? Why does everyone just want to play safe? WHY?
Mr. Murthy, I humbly hope you will consider my letter and have a human touch so that the right Entrepreneurs, Companies and Products / Services are funded to take INDIA to the next level!!!
Whatever you decide, Mr. Murthy keep in mind millions of enterprising Indians are looking forward to your help and support as always. Like you created Infosys we hope you create your VC fund as a benchmark in the Indian venture investment landscape. We all are waiting, all of us – INCLUDING ME J
http://www.scientificaauzar.com
Murthy will not finance , he deducts 300rs from every one salary in the name of CSR where does it go no one knows..
The reason to sell VC was to sell his shares …Neilkani left in the name of UI. Infosys is aship about to sink, the rats have jumed and the captains (employess) also jumped remember 40% attrition stories…
Akshay,
I totally understand and feel your thought process.Spot on.
From personal experience – The VC’s in India don’t seem to know what they are doing.
My suggestion is don’t waste your time talking to them.
Bootstrap. do your thing. Grow scale.
One fine day, you could be approached. At which point, you may not really need their money, unless your business is working capital intensive.
Best of Luck!
Vishal Borker,
Hi,
can any one of you help me out in knowing what is the procedure to avail this VC fund??
thanks
Hi,
Pretty good points. Mainly regarding Existing companies Vs new ideas on paper.
Keep it up.
Regards
Anand
@Neel – you are right, I am indeed furstrated with the white collar approach of the VCs and hence this letter to Mr Murthy who is known for being an honest and non hypocratic gentleman!!
If you feel this letter is too long, thats your problem buddy – I have got a tereffic response to this letter, comments and has even made me win the VOICE OF ENTERPRISING INDIAN Contest @ TiE Summit ’09
I have even got the much needed response and time of VCs, Angels and HNIs after writing this!!!
Thanks to all and especially to YourStory and Shradha for giving us a great platform to voice our comments…
Akshay.
Isnt the letter too dumb. Just shows your frustration and trying to get attention of Narayan Murthy now that you have tried all other VCs, Angel Investors and PE Firms.
Also, like you slides, even the letter is too long and just shows the scope for precision and editing.
ATB dude…
Neel Shah
CEO & Founder,
SPOXCHANGE
http://spoxchange.net
info@spoxchange.net
Hi there……..would any1 of yuo be interested in putting money and start a venture in food industry…?
[quote name="Jeev999"]Great and comprehensive points! 8)[/quote]
[quote name="Jeev999"]Great and comprehensive points! 8)[/quote]
Thanks – Akshay.
Great and comprehensive points!
[quote name="ParitoshS"]paritosh@paritoshsharma.com
Lets connect here![/quote]
Sure, sending you a mail rightaway
Regards,
Akshay.
Your Voice can get you connected with Iconic Entrepreneurs: http://tiesummit.org/VoiContest.aspx
paritosh@paritoshsharma.com
Lets connect here!
Hi Paritosh,
We require growth funding and not Angel funding. We already have quite a few customers and are doing well.
Anyways, lets take this offline – where can we touch base?
Akshay.
Akshay,
Let me understand your concept and I can at my level push you across some HNI’s I know, some of whom have personally told me, that they are lookign at smart and good investments. And yes, you are right they do take in big stakes. With them, money is no big deal, but safety is.
Anyway, the grants from MSME may not be real big, but they can surely support you with customers. So grant to a tune of a couple of lakhs and lets say first set of clients, aint a bad deal!
Hi Paritosh,
We have approached and are approaching HNIs, lets see – hoping for the best. Usually HNIs ask huge stakes but lets see – we are talking to a few…If you can recommend a few known to you – would be highly obliged
Yes we have heard of Zoho and we compete Zoho but our model is not just like Zoho, its different and hence the funding needs…
We have approached the MSME foundation and are hoping for the best, however am not sure that the GRANTS which they offer can take us to the next level of growth but no harm in trying
Akshay.
Well, first things first, In my personal view this is highly absurd and you would not have written such a vague letter, if you would have actually known how a VC works.
I am not a VC, neither do I represent one. I am an entrepreneur and consult start-ups and am running a start-up, bootstrapping.
Now some gyan: I sat across with one of the top VC’s in India in a f2f wherein I really got the working of a VC.
You have spoken about : “if you are going to build a software product..”- have you heard of Zoho??
Have you ever thought of approaching a HNI, sitting on plethora of cash and ready to invest? He will sit across the table and close the deal down asap, without wasting his/ your time.
If you are an ICT start-up, do you know there are various schemes by DST and MSME which allot you absolutely free GRANTS, have you approached them?
[quote name="Vijay Anand"]hehe. Good one
Keep in touch mate, and admire the passion.[/quote]
Sure Vijay – thanks, good day – god bless all.
Am based out of Andheri Mumbai, if you in Mumbai can catch up for sure
Regards,
Akshay.
hehe. Good one
Keep in touch mate, and admire the passion.
[quote name="Vijay Anand"]Yep, Nayak is a brilliant movie. All movie lines aside, here’s what I am working on. You might be interested. I am definitely not sitting on the sidelines and counting my money as you assume
http://www.venturewoods.org/index.php/2009/08/27/is-micro-funding-a-new-trend-to-come//quote
All I can say is ITS A NICE LETTER
Will be in touch – god bless!!!
Yep, Nayak is a brilliant movie. All movie lines aside, here’s what I am working on. You might be interested. I am definitely not sitting on the sidelines and counting my money as you assume
http://www.venturewoods.org/index.php/2009/08/27/is-micro-funding-a-new-trend-to-come/
Vijay, if you have seen the Hindi Film Nayak – there is a dialogue in that film where Anil Kapoor says he wanna live a common man’s life, marry, have children, work 9-6, make money and then retire one day, to this Paresh Rawal says that if Mahatma Gandhi had done this we would have never got independance and we would be still slaves!!
I choose not to sit back and make people active and be the change element – maybe thru such letters (which may sound stupid to you!! ) – My mantra is – “Be the change what we want to see – told once by the Mahatma!!
You can sit back, relax, enjoy, maybe crib and offhand comment at such letters and ofcourse count your big bucks while we get on with this change – You like what y’re doing and I like what am doing – so lets enjoy!!!
Akshay.
Akshay,
No such luck as getting funded by a VC and all – they wanted way too much equity when I was building a company
All of us took up part time jobs, ploughed it back into the company, built it and sold it. That seemed more logical than writing letters 
Anyways, good luck. Back to work.
Vijay
Founder, Proto.in
[quote name="Charu Jaitley"]THIS IS VERY NICE AND HONEST[/quote]
Thanks – Akshay
[quote name="ankurjain2k"]Good work
It is awesome
Ankur[/quote]
Thanks – May all Entreprenuers win and get the right funds!!
Akshay.
[quote name="Ravie Boharia"]Well said![/quote]
Thanks – chale chalo!!!
Akshay.
[quote name="Ravie Boharia"]Well said![/quote]
Thanks – Chale chalo
Akshay.
[quote name="Vijay Anand"]Akshay,
Very useful link for you: http://en.wikipedia.org/wiki/Venture_capital
It helps to understand how the VC industry works – they are nothing more than a highly specialized bank. You have to look at it from that perspective.
And I am not a VC.
V.[/quote]
Vijay – have read millions of such articles brother!! Anyways, thanks for the link and we know that VCs & PEs are nothing but a specialized bank – so this article is addressed to the entire investory community as a whole
Something has to change here, problem is – Venture Funding is termed AS RISK CAPITAL but is any VC risking here??? Lets ponder and debate it out!!!
If not u not a VC have u been funded by one?? (Million dollar question – hmm)
Akshay.
[quote name="Ravie Boharia"]Well said![/quote]
Thanks, lets do it guys – lets do it….Jago Entrepreneurs Jago!!!
Akshay,
Very useful link for you: http://en.wikipedia.org/wiki/Venture_capital
It helps to understand how the VC industry works – they are nothing more than a highly specialized bank. You have to look at it from that perspective.
And I am not a VC.
V.
[quote name="ankurjain2k"]Good work
It is awesome
Ankur[/quote]
Thanks Ankur – we need support to move ahead and state our point. This is like Gandhi’s Satyagraha or a non co-operation movement – JAGO VCs JAGOOO
[quote name="Anoop Krishnan"]if a VC is ready …can u guess how many bplans will flow to his email?? can u imagine giving chance to people to present half an hour and guess how much time it takes..?
AN IDEA ALONE CANNOT CHANGE OUR LIFE! :p[/quote]
Anoop read the article in totality, we are asking VCs not to fund ideas, we both on the same page!!! we are asking them to fund real companies with real products and real customers and not ideas!!
We are thinking alike, if VCs stop giving ideas and all funky things a priority and start talking to people who have taken the risk to run companies for a few years – I can bet he won’t have more than 3-5 plan a day to go thru and meet 3-5 entreprenuers in a day – am sure that’s manageable!!!
Akshay.
if a VC is ready …can u guess how many bplans will flow to his email?? can u imagine giving chance to people to present half an hour and guess how much time it takes..?
AN IDEA ALONE CANNOT CHANGE OUR LIFE! :p
Continued…
Last but not the least if all VCs look for quick bucks to sell the company and stuff in 3-5 years am sorry to say that INDIA CAN NEVER HAVE THE NEXT GOOGLE, MICROSOFT, ORACLE or ANY GREAT PRODUCT – We are and we will stay only great service companies to serve the WEST and the entire investor fraternity is to be made responsible for this – both private and public sector!!!
Like Dhirubhai broke the license raj seems someone will have to do something to break the service company raj in INDIA to make the NEXT GOOGLE OUT OF INDIA
Hope I garner some support to make it happen!!
I strongly beleive – ‘Tough Times Don’t Last, Tough Men Do’ and so I will, we will and all Entreprenuers in INDIA WILL – God Bless all………….
Regards,
Akshay.
Continued…..
We are not asking for any blind money to be put in, have the guts – then evaluate us. With the test of time we have become rock solid. We have passed through all the thorns in life to become a true diamond – all we need is the right investor to take us along and then sky is the limit!!
Last but not the least, the VC community has only made us write the above 6 points – these are THEIR points of rating of the business plan. Maybe you do not belong to that fraternity as you are saying they will throw these 6 points – If that’s the case i feel you are a sane VC and would like to meet up
Dear Mr Vijay,
We entrepreneurs are ready for the thorns, who says to give money for free? As such VCs and PEs have lost enough on social networking and eye balls and mobile advertising and stuff – History is the proof of this that in this bubble most VCs did not make any money whatsoever – Where was this sense prevailing then? Why was money put in any tom dick and harry portal which was literally copying others? Would not like to name those high end portals but why most VCs invested for eyeballs??
With this article what we are asking is JUST A FAIR CHANCE. Please read this full article and then comment!! When product companies like us are not even called for evaulation, it really hurts vis-a-vis any other plane jane service company or another social networking site or portal having the same adveritising as their revenue model!!
No Offense, but Open letters have become way too fashionable these days. A little understanding into how the venture capital industry would throw off half the stuff mentioned here.
People need to understand that this is capitalism, not some charity throw-away money. It comes with its thorns for sure.
When an investor raises money (very hard to do in India) they promise a 40% return, in 5years. India barely produces fast-growing companies that will be built AND sold in five years to return that money. So what do investors do? They wait for the company to do get the point of making some money so that their job becomes to scale the company (hoping that it will save time) rather than building everything from scratch.
Seriously. Get a grip. Learn how an industry works before writing open letters – it just shines a bad light if you are representing the entire entrepreneurial community – or if thats your hope.
Vijay
Well said!
dear pal
it takes just 2 mins to valuate the potential….if we start talking, we can understand the potential….everyone will be confident on their idea…but…the truth is strange…………
THIS IS VERY NICE AND HONEST
Interested in meeting the likes of N.R. Narayan Murthy, then make sure to be at the TiE Entrepreneurial summit which is the asia’s largest.
Participate in the Voice of Enterprising India contest and get free passes to the event.
Submit your Entrepreneurial idea/venture at http://www.qik.li/voei
Good work
It is awesome
Ankur