This might upset a couple of people out there. While I will not go so far as to suggest that Venture Capitalists (VCs) are dumb, but I would definitely stick my neck out in saying that they ain’t the best brains out there either.
Most of them are basically ’’fund managers’’.
Mostly ppl think that VCs are good at speculating, after all if it ain’t **YOUR MONEY** it ain’t all that hard to loose right ?!! That ain’t right either. Problem mostly is that VCs in India have absolutely no experience whatsoever of startups. They have never *ventured* out on their own. Thats why they have some nice Excel Sheets and Powerpoints to show around but little else when it comes to value addition.
The problem also lies with the Entrepreneur who thinks that the only thing he needs is **dough** for his **BRIGHT IDEA**. While the idea might be bright, its highly unlikely that a raw idea is going to recieve instant mega-success. The idea needs to refined, and refine and refined till it actually becomes **marketable**.
There ain’t a VC I have met till date, *I work in the industry and am one myself*, that had any idea about providing a venture with value-add needed to make a venture successful. The only exception to this statement were people like Mahesh (aka Passionfund) and Rahul Patwardhan (aka Indiaco.com). These two people actually have a decent idea of what they are doing and thats the reason why they are perhaps the only ones to have some kind of exits already happening in their portfolios.
I strongly believe that one of the many reasons why a venture that is funded never goes to an exit is exactly that, that it got **funded**. A startup should be lean and mean. Money makes one comfortable whereas insecurity is what is needed.
VCs need to realise that ventures need a lot more than just money. In fact, money is just **one of the many things** that a venture needs. A venture needs a confidant in a VC someone who they think they can trust to be squarely behind them when things go down. If VCs continue to think that after putting in money all they gotta do is watch the returns come in then they might as well pack their bags. VCs need to be able to provide their ventures with the skill sets like strategy and marketing that are solely reqd. by the startups as well as access to customers/markets.
If neone thinks that VC industry can be brought down to a science they are sadly mistaken ! It is an ART ! Every startup, every venture is unique ! There can be **NO** shortcuts ! No Assembly Lines to ensure returns !