"In India one doesn't have to look hard to find growth, at the same time, entrepreneurship is not a short term game, it is a 5-10 year stint and you have to choose what you want to do very carefully." feels  Prashanth Prakash, Partner, Erasmic Venture Fund, who has over 10 years of Start-up experience in Internet Software, Retail and Healthcare related businesses and has invested in numerous start ups in India.

Excerpts:

Entrepreneurs have always aspired to be in glamorous businesses, but as a VC fund we have also looked at very traditional industries. It is being demonstrated in India that if you have the right competencies then it is possible to be successful as an entrepreneur even in a non technical space. The whole VC sentiment within the country is still very tech focussed, though a small fund is set aside for non tech ventures. There are global funds interested to invest in India; and it has to be deployed only in India. So today raising money is not an issue.

We have yet to find an entrepreneur who understands all nuances of start-ups, but we have come a long way from the 90s. Today there are support systems for an entrepreneur, which were not available a couple of years back, viz. incubation services, VC funds, organisations who provide business plans etc. Enough money has been raised, it has to be deployed, and people can't talk about lack of money as a cause for stifling entrepreneurship in India.

If you are a younger entrepreneur, you find experienced people willing to partner with you, providing the much needed mentoring. Entrepreneurship is not something you can do alone; it's good to have the right team from the beginning. Entrepreneurs in India are generally averse to giving up control and share profits, it is better to share the profits and grow than keeping all the profits for yourself.

In spite of very bullish predictions of our economy, our consumer driven growth and disposable income, Indian companies take longer time to mature. An Entrepreneur needs to be practical, it is important to set expectations within the team that it takes long to grow and the passion needs to be sustained throughout.

Staged capital infusion is a better/safer strategy for all parties - nothing wrong in raising money, little money at the beginning, little more money when you are growing and a lot more money later is the right way to grow an enterprise. There are some VCs who will invest for the long haul, it is good to take the right kind of money at the right time.

Valuation expectations from Entrepreneurs need to be reasonable, at the moment it is still is a challenge. Poor visibility on Exit scenarios is also a big challenge for Entrepreneurs.

Indian companies are traditionally averse to growth, however this mindset is changing and you see larger enterprises in the country are expanding their foot print and establishing their presence abroad slowly.

Focus should be on monetization and unique value of the business idea. If I am a startup, should I straight away look at revenue generation? Focusing on user values is more important than extracting money from them. If basics are taken care of, monetization will follow.

Startups that can execute on their strategy and get separated from the noise will stand out. It is also essential to be frugal, and make efficient use of capital. An example is in the fast food, Katizone is a company which says, why should fast food be American, Indian food is inherently more healthy and Kati Zone is attempting to provide fast food that is Indian and healthy.

Timely Talent acquisition is essential for a start up. Recession is an opportune time for a start up to attract good talent. For professionals who feel are stagnating in their jobs, this is the right time to explore and partner with startups, to get the right break.

It is difficult to say which industry to focus on, for instance one could say that retail industry is growing so should one not be in that industry, but Interesting thing is that you don't have to be in retail business, every other person can't start a successful big bazaar, but look at surrogate growth, for e.g., there is a company who has invested in gift card business, which is not investment heavy.

Prashanth  is Partner, Erasmic Venture Fund (EVF) a VC fund backed by Google. EVF has made investments in 14 plus companies that are in fairly diverse areas, such as Internet & Mobile, Knowledge Process Outsourcing, Food & Consumer Retail, Bio Tech and Technology Products. He helped define both the Vision and Strategic direction for NetKraft to establish it as one of the leading off-shore Solutions Company focusing on the Retail and Health-Care Verticals.

He was speaking at a Panel Discussion organized by Businessgyan and TASMAC  on the topic ‘How to grow in turbulent times?' 

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