I think the VC market in India is poised to grow leaps and bounds – simply because of the immense opportunity to invest in entrepreneurs as an asset class. Here are some trends which should provide some support to this argument:
- There is a lot of wealth generated amongst people in recent times
- People with a fair amount of capital invested in safe asset categories want to explore riskier segments with limited funds (both for thrill and returns)
- Traditional investment options are really tapering off (need more creativity from financial institutions here)
- The first generation of entrepreneurs (post liberalisation) are cashing in on their investments and ventures
Of all the people who are turning towards venture investing, the first generation entrepreneurs who have cashed out seem the best. They have been there, done that, know the nuances of not having money, have experienced the difficulties of raising capital, can quickly identify opportunities, can spot entrepreneurial talent, and can take risk. Since this number is growing, there is tremendous hope that the VC market in all its forms (angel, seed, early stage, etc) will bloom. Its good for them too!
What do you think?