The Startup ( need to get a new word ) ecosystem in India has gained a lot of attention , traction and also acceptance .
In late 2007 when Flipkart was founded and in 2008 , when it became more recognized , ( remember buying a book in 2008 ) had asked self , how one can be a part of the journey .
Left it there — should have explored deeper .
First lesson learnt — Follow your gut .
Cut to 2016 , when a category was being created , and was also using the product — had experienced the product and its experience .. and then put the Investor hat on –
- Product Market Fit ( PMF) — tick
- Customer experience — tick
- Negative working capital- big tick
- Founder experience — tick
- Scalability- tick
- Possibility of future fund raise — tick
What can go wrong? — execution . Well then execution risk is there in every such investment opportunity.
The list can go on .. giving a sense of elementary checks ..
Learning from the first lesson and with data on ground .. carried out the first investment into a category creator , which later on became a market leader — MilkBasket
What happened between 2008 and 2016 is also important .
Individuals started trusting the disrupters who wanted to create a new product or offer a new service . Started investing smaller amounts, sometimes as low as Rs . 50,000 . And a new description came into play — Angel . And when a group came together , it was known as Angel(s).
That’s when the Angel networks came into existence . And these networks were the early providers of risk capital . The big boys of VC and PE followed , but then the Angels were the ones who kick started the journey .
Over to 2023, the number of unicorns in India is over 100. Now the needle is moving from valuation to profitability. That’s where the coming of age of this sector is in play.
Today, with the popularity of ‘Shark Tank’ in India , investing in startup’s & startup’s have become more mainstream.
The regulator is also getting more active in this space . Over the last few months, the number of consultation papers and the final regulations to monitor this space is also giving more comfort to the investors.
With the GDP of India expected to double within the next 5 years ( well not into forecasting ) , the opportunities for the capital requirement and deployment are in place.
It’s the direction, which matters when one is looking at opportunities. On the macro side , India’s GDP moved from $2 trillion to $3 trillion in less than 5 years . That’s only when one of the parameters .
With the direction now firmly placed for growth , it’s the investors who needs to participate in this journey.
And there are enough opportunities to invest and no need to rush for fear of FOMO ( Fear of Missing out ) or wanting to just follow the herd.
Do understand what you are wanting to expect from the investment and your probable investment horizon and why you are investing !
This is an interesting asset class and participates with full information and knowledge . The ride can be exhilarating and enriching and also create wealth ….
Author:
Brijesh Damodaran
