Dear Readers, this post is another one in the series of interviews with investors. I am pleased to introduce Samir Kumar, MD, Inventus, who has been very active in the Bangalore Entrepreneurial Circuit. Samir has been an early stage investor for some years now and is available on email at email@example.com. Read on to get some of his insights on what he is looking for in a company. If you are looking for funding, you can take hope, Samir and some other investors are of the view that this is also a time for investments, despite the global economic turmoil.
Question: What is the Inventus Investment Philosophy?
Answer: Inventus is focused on early-growth ventures that address large, rapidly expanding markets. We back teams that we believe can exhibit superior execution of their plans.
Question: You have invested in several companies. Would you like to share some success stories with our readers?
Answer: RelQ was one of my successful investments (made when I was in Acer Tech Ventures). It grew nicely, and had a successful outcome when EDS acquired the company in mid-2007. One of the key reasons for success was that the team had a strong background in the Quality and Testing space. The company also remained focused on testing, and resisted the temptation of straying into the software development space, which seemed very lucrative at one time (year 2000). This focus, and background of the entrepreneurs resulted in a good outcome for all.
Question: Can you share some experience of rejecting a company?
Answer: There have been many companies that one has had to pass. This is the nature of the business, since one typically ends up funding 1-2 companies from 100 seen. Most often, however, we try and explain the reasons to the entrepreneur, and leave him with some positive feedback that can help him as he moves forward. Typically, companies that we pass have either a very competitive landscape, or are addressing a small market opportunity, or are in a space that is not growing rapidly.
Question: There may have been some companies that you may have invested in that may have failed. If yes, in hindsight, what do you think went wrong with those companies? If you had to invest in them again, would you do so?
Answer: We have no problem backing entrepreneurs who may not have succeeded the first time. We look to see if they’ve learnt lessons from their first experience, and have come out wiser as a result. What went wrong in failures are many reasons – markets not emerging in time, cash burn not properly managed, etc.
Question: Most entrepreneurs understand that venture capitalists look at several companies and fund only a handful. How can entrepreneurs increase their chances of raising VC funding
Answer: VCs look for strong teams with a good track record, and that bring complementary skills to the table. We also look for differentiated companies which address large and rapidly growing markets.
Question: What do you see as the impact of the global financial crisis on Indian entrepreneurs and growth companies? As a result of this are there certain sectors that you are favouring over others for investment?
Answer: The global financial crisis could be seen as a boon in many ways for serious entrepreneurs. While such events usually make markets harder to address, they also result in costs becoming lower, and hiring becoming easier. Thus, while the start-up is working on building its product or services, they see a favorable environment, and hopefully, by the time they’re ready to roll out their product or service, the cycle would have started changing.