Entrepreneurs Should Choose VCs and Not Vice Versa

I have been in the Entrepreneural venture for around half a year, and have been scouting for investment for some time. Met many VCs and attended few Start-up summits organized by Proto.in and startupcity. Let me share my experience here.

Indian Market is full of enterpreneurs and there are very few investors around. This makes investors more powerful then the fund seeking enterpreneurs.

Present Investors are of various categories -- individual investors (high net worth individuals), Seed Funds, Venture Capitalists, Equity Partners etc. They invest in different modes, and they enter and exit at certain defined stages.

Let me discuss something about different type of categorization of investors.

Categorization I : Risk Takers Vs Avoiders

Risk takers mostly prefer to be the first company to invest in a venture, and they look low valuation and high return. They have risk taking ability with good vision and judgmental ability.

The avoiders do not posses any of these three traits. All they seek is a area where they can park their fund, and get good returns. They don't know how and they do not make any effort to understand. All they do is look at places where the other companies invest and then become a secondary investor. They believe in other's judgement.

Categorization II : Big Thinkers Vs Small and Beautiful Vs Quick Monsters

Big Thinkers are more strategic. They invests in ambitious projects and are more open to ideas. They take risks but calculated risk, and often help clients grow using their network. They are active but understand the business and its challenges; they also don't bug the management team of the client unnecessarily.

Small and Beautiful are the folks who look around their closed circle of friend enterpreneurs, and make investments. They are not aggressive in growth but invest for medium to long term. They exit partially and value relation with the promoters. They are supportive but prefer not to give too much time for the venture.

Quick Monsters are very smart folks, who are strong in tactical works but not very strategic. They don't value relations, and can enter and exit at any time they want. They neither have long term strategic thought as a Investment Company nor they have for their clients. All they look is an immediate opportunity to get in, and exit when it favors them.

Categorization III : Open Minded Vs Look-up Tablers

Few people I talked with do not believe that VCs can be categorized this way. But I have an experience to support. I visited few VCs were stuck with the questions in his look up table.

They had four questions to ask.

1. Who are you clients?

2. What is your revenue?

3. How long are you in the industry?

4. How experience is your team? Any celebrity entrepreneur with you?

Is this because of the outsourcing culture in India? Does this say people here can't think outside of clients and revenues? I have no answer.

They never asked my what my company do, what is the business plan and how I can work with the investor to bring good value to the customers and the stakeholders of both the companies. I was surprised! I call them the Look Up Tablers.

These class of investors have very good experience in managing money, and they are no better than investors who buy shares from the stock market. They are of no more value than their money. Sometimes even their money can be a problem. I expect them to bug the management team every now and them, and influence the invested company to change its course.

The Open Minded Investors are the other hypothetical class of investors, who understand the team, the product, the potential and the vision. They invest in the company and share the vision.

Sadly, I have not met any such investors. Have heard about them, and would love to meet if there are any.

Investment : Enterpreneurs and the Investors

What I have learned in last few months is, as a entrepreneur one must be strong enough to reject some investors and one must posses a quality to reject an offer to meet the investors too. Companies after all do not run only on investors money; it can run in bank loans, some small borrowings, some quick revenue survival plan, and some cost sharing partnerships with revenue rich companies.

All these strategies do have their own drawback, but going around a wrong investor is more bad. It takes away the valuable time, delay the work, frustrate the team and most of all forces to divert the main vision.

The investors are in the business of investing. They have to invest in order to survive and grow. They are more forceful than the enterpreneurs towards investment.

Ending Thoughts

Most of the Investors we meet are not the enterprenuers and they are the staffs of the investment company. Enterpreneurs need to understand this, and be prepared to be rejected and misunderstood. After all had they been enterpreneurs themselves, they would not come up with questions you cant answer.

It is more important to target a right investor, and find them at the right time. It is also important to find the right partner for the business who bring in money. Wrong investor can be more harmful than a no investor. Enterpreneurs needs to be careful.

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What do you think? I would love to hear from you. Share your thoughts here as comment.

If you have any experience to share, please do it. I am sure, all want to read and understand on what's going wrong.

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InRev : Information Revolution Starts Now!

Finally today is the day for InRev to come into existence. It has been a long and challenging path to make it happen but finally we could realise our dream of starting own company. And it has come with a promise to bring Information Revolution in the World.

Last decade has been the period of development for Risk Management, Marketing Analytics and Web Analytics; and these areas have shaped up well. The challenge however remains in the integration of all these services to make optimal decisions.

There are several challenges including making Web Analytics more Marketing friendly, and taking developments of Business Intelligence and Decision Management areas in Non-Web Environment to Web. We have entered the Market to address these areas, and will be working to integrated the Web and Non-Web data to provide an integrated platform.

Company Info:

InRev transforms business by making all possible information available at all times. We combine Domain Knowledge, Trusted Reporting Structure and innovative applications to help companies advance their Business Decisions. We serve across all stages of Business Intelligence and Decision Management areas, right from Data Extraction and Integration, to Strategy Consulting using the Intelligent Insights of the Business.

InRev is the promise to the World to take the Information Extraction and Usage to the next level. We plan to make use of every possible data, and process them to build Killer Apps that brings an Information Revolution in the World.

Products and Services:

• ETL Suite

InRev ETL Suite connects to all types of data sources, and integrates them. It has a Data Processor which helps in creating new variables and preparing OLAP cubes.

• MIS Reporting

Data Visualization, Executive Dashboards and Executive Summary Reports are available at the click of the mouse. It has inbuilt best in class data security measures and tested fail proof architecture to support huge amount and complexity of data.

InRev Reports are very user friendly, and it is probably the only reporting tool in the World to give every user what they want. It has different interfaces for people at various positions. It is sure to be loved by all, from Analysts to the CEOs.

• Analytics and Consulting

InRev provides Consulting Services in various areas of Analytics including Database and Marketing Analytics, and Risk Management. InRev has Consultants, who are experts in Predictive Modeling, Optimization and Portfolio Analytics, Business Rules Management, Model Development and Deployment.

• Decision Management Tools

World has various BI Tools, but yet we thought we will add value. We provide the tools that exactly fit your business needs, and do not burden you with huge costly package. We provide tools for various Statistical tests of the data including Information Value and Single Factor Analysis. Other products include Bayesian Risk Tables, Natural Segmentation, and Objective Market Segmentation etc.

• Professional Services

Huge investment in BI Tools is everyone’s problem specially when there are very few people who can use it. InRev addresses this issue by providing Consulting Experts who can work in client site to solve the business problem or train the internal resources.

The Expertise Areas include SAS™, BusinessObjects™, CART™ from Salford Systems, Model Builder™ from Fair Isaac etc. We also provide consulting services for various open source tools like OpenI™, JasperReports™, Tableu™, and Mondrain™.

• Open Strategies

Open Strategies is the major differentiator for InRev from other Vertical Solutions players. The Open Strategies include two initiatives:

F Cube (Forecasts For Free): InRev brings the latest Macro-Economic Forecasts for the US and Global Economy. And it brings for free for use for all purposes including commercial.

InRev will however charge for any ad-hoc requests made by its clients for specific reports or forecasts, which are not included in the regular offerings. Additional revenue source for this initiative will be the Advertising. 

Cricketing Queries: InRev plans to make a user friendly simulator for World Cricket Reporting and Forecasts. It will include all basic reporting functions from the cricketing world, to prediction of Player and Team Performance.

This initiative will be done in partnership with companies involved in Cricket. Advertisement and Ad-hoc request processing will be revenue sources for InRev.

I am very excited about my new venture, and am happy to have great team with me. Laxmi's background as a successful business person fighting crisis times, and Deep's passion and expertise in analysing Economic Data to make business decisions are some of the major strengths we have.

I have few other folks with me. Will keep updating on them and products and services of InRev in days ahead.

Would appreciate you feedback and/or comments. Please give them via comment to this post or email me.

Very Happy New Year to you and your family. Have a great year ahead.

Cheers!!

Entrepreneurs : Don't Do an MBA

First let me ask you few questions.
1. Do you remember Maradona?
2. Do you know who Bill Gates is?
3. Do you know who Britney Spears is?
4. Do you know Sergey Brin?
5. Do you know Steve Jobs?

Well, you must have scored 5 out of 5. Great.

Now can you give some time to think who are the people managing these folks. Remember the managers of Britney and Marodona? Remember who Steve Ballmer is? And then think if you can remember what educational degree these folks have.

Done? YES!! Cool.

I am sure none of you actually scored 100% on the later half.

I have been studying whether MBA is necessary to be successful in career, especially an Entrepreneur career. The study showed that most of the World CEOs are MBAs, and it was a WOW for MBAs.

But then the underlying thing is, none of the most successful Entrepreneurs are MBAs. They are either college drop outs like Steve Jobs and Bill Gates, or they are simply very passionate youth Entrepreneurs like Kishore Binyani (founder, chairman of Future Group).

This lead I to think that MBA is required to be a high spending CEO or a high profile Employee as the Entrepreneurs tend to hire MBAs for the Managerial roles. But if you have something to deliver to the world and if you are passionate about it, You Don’t Need an MBA.

MBA is a waste of two years. And at the end of two years, you are left with little passion about work but are trained to manage other folks. Managing is a great skill to have to lessen risk in life. But to really do something World will remember for long, it might not be. Because World Remembers people who actually work but not the one who Manages them.

MBAs have built many companies but only few of them can actually jump into starting a business after an MBA. They need to work for some other company to build their profile and earn money to pay back educational loan (which most people think is a path to greatness).
So MBAs when start a company, it’s gonna be their retiring venture which calls for being risk averse (for family reasons or age issues or whatever). Instead if someone starts a company early, he can take it much ahead as it is gonna be his starting venture and he can take up huge risks.

So if you think, you are Entrepreneurial and can build company. Please don't do an MBA and please don't go and work under someone who once chose not to go for an MBA.

Just start a company. Do it asap.