Comments on: vcs in india – what do they want?

By: Rajesh M

Rajesh M — Mon, 09 Jun 2008 07:53:18 +0000

if i was a VC, i would probably fund startups that were doing the spadework in a niche space for the big guys.

eg: myspace got acquired by news corp

any big offline media company looking to enhance their portfolio to the net would consider buying myspace as they suddenly get a toehold into the “new media” generation.

news corp can now go to their advertisers and say, hey we can run your campaign on tv as well as on the net now.

thats a big deal.

By: deapthought

deapthought — Fri, 02 May 2008 08:10:47 +0000

here is what i think – if i were publicizing myself to be a true risk-taking early stage venture capital company, i would raise a small amount of money – $10MM (small for a fund). i would invest in incredibly early/idea-stage startups, but i would invest it in the smartest guys and the best/most talented teams i could find (subjective, of course). i would be highly industry agnostic, but invest in businesses that i understand. i would invest somewhere in the neighborhood of $1MM per team/idea i would fund. that would be my strategy.

yelp may or may not be nearing profitability today, but they have a cult following and have created a sub-culture of internet users, at least in the bay area. if someone thinks that is worth something, they will ultimately extract value from that, either through revenues or through an acquiror.

By: Biron

Biron — Fri, 02 May 2008 03:48:19 +0000

Let me ask this: what would you invest in? An article in the WSJ cited lack of skilled labor as an obstacle to india’s growth… If I were an investor in India, I would fund the basics – construction, infrastructure, vocational institutions, etc. That’s where the large near-term growth is. If companies like Yelp aren’t nearing profitability in mature markets like the US, I can understand why investors would shun similar businesses in fledgling markets like India & China.

By: deapthought

deapthought — Fri, 02 May 2008 01:50:56 +0000

krishna, i think what we’re witnessing (and this is more prevalent in the west and in more mature internet markets like china) is the very basic vc theory of placing 10 bets, knowing that perhaps only 1 will work. there are some very public examples, a la youtube, of businesses that had solved the traction problem, but had not attacked the monetization issue yet. twitter is the flavour of this year with respect to similar dynamics – insane traction and buzz, a seemingly great paper valuation, but not revenue-generating.

By: krishna

krishna — Fri, 02 May 2008 01:36:47 +0000

I agree who wouldn’t give money to someone who’s making money!

What baffles me is the number of companies who get funded even without a revenue model. There are many of these “web 2.0″ companies across the globe with billions of page views but they can’t make a dollar and they cant get acquired…so what do they do? Raise more money…I dont get it.

By: deapthought

deapthought — Tue, 29 Apr 2008 06:13:30 +0000

that’s just the point. it sounds damn good to me too – and i am not an informed, intelligent, risk-analyzing investor – i’m a normal dude. i would expect vcs to be in the business of ’stretching’, and some do – but not most. so yes, i do find this somewhat surprising.

By: Biron

Biron — Tue, 29 Apr 2008 05:21:56 +0000

“a clear, unobstructed, non-convoluted path to money” sounds like a damn good bet to me… you find this surprising?