Last week I was at an interesting round-table organized by Welingkarâs Education on âSeeding Entrepreneurial Startups & Social Businesses in B School Campusesâ. They had put together an interesting group together there were VCs, University Professors, Consultants, Entrepreneurs, Startups, representatives from IITs, IIMs, representatives from TiE & students pretty much the entire eco system was present in one room. The discussion and part interesting, part practical and part academic which was kind of expected given the room was full of people trying to figure out how we can teach MBA students to become entrepreneurs and now to ignite the passion etc. etc. Facebook, Google, Yahoo and a lot of other major companies came about as campus startups.
Folks from IIT and IIM very cheering up the fact they they now have 4-5 startups coming up every year to which i brought my point. Do you really think we should be happy with 4-5 startups coming from the Dozen IIT and IIMs and the thousands of MBA schools in the country ? NO WAY
According to me if we really have to be serious about startup space in India we need to have at-least a 1000 startups over the next 5 years. Here is the math if we have to aim for 200 startups a year for the next 5 years and these 200 startups are coming say from the
5 Metros Mumbai, Delhi, Bangalore, Hyderabad, Chennai @ 30 per year
5 Cities Kolkatta, Chandigarh, Indore-Bhopal, Jaipur, Ahmedabad doing 10 each year.
Other cities too can contribute say total 5-10 per year
Now based on established startup funding models it is clear that most western startups operate at a $25k to $50k seed funding level and therefore it is fair to assume that a typical seed round in India can easily be in the 10 Lakhs $20k range. Which make a total funding requirement over 5 years of 1000×10 Lakhs = 100 Crs. approx $20 million.
That’s not such a big sum in the funding world however the challenge is how to actively manage, guide and mentor these 1000 startups and what kind of an organization is actually equipped to do so. My answer is simple what about the local entrepreneurs. If corporate funding is able to combine with local ‘Angels’/ Entrepreneurs say 50:50 where 5 lakhs comes from central fund and 5 lakhs comes from a local angel who is the lead on the startup and takes active personal interest in developing the idea and mentor the startups. The startup get the advantage of personalized mentoring as well as access to the larger network of contacts and knowledge which can help take them to the next level
At the same time I may be totally wrong too maybe India just needs a 100 high quality startups ?? which much higher funding ?
While I am still working to develop this idea further taking inputs from friends, incubators and investors across the globe would be happy to get your ideas and how we can get to 1000 startups in India ?