What Indian startup investors should learn from global investors

India has a very blooming start-up industry and it can be seen from the fact that the Indian startups have raised billion of dollars through various investments. The year 2016 has seen an exponential growth of the startups in comparison to last year. This massive growth in the number of startups and investments in them have been majorly done by the HNI’s and the private investors and investment firms. Thus, the investment community in India is clearly getting matured and recognizing the potential of the start-up industry. 

Though the current scenario is much better that the scenario that existed a few years ago. There is still a lot of space for the investors, especially when it comes to early stage investment. India’s start-up sector is growing phenomenally, but we still lag behind when it comes to other global players.  This brings into light a lot of learning that the Indian investors can learn from the International Venture Capital community playbook. It is true that the Indian market operates is very different from other markets, still there is a lot to learn. The International VC’s have been in the scenario from a very long time now. They have a better experience and insights. Indian investors can gain a lot to gain from the ups and downs faced by them. Learning from the key insights that lead to the success and failure of their global counterparts, they can work towards optimizing their approach.

Development of a sustainable, holistic, self-nurturing ecosystem  - There is an acute need to boost start-up growth in India. Investments should not only take into consideration the monetary component.  There are aspects of investment that are still in isolation, which include mentoring, technological expertise, financial and CA services, networking, logistics, etc. These are very basic aspects which, if taken care of can pave the ways to the growth and success of the Indian start-up sector. There have been so many examples of how the startups who have received good rounds of initial funding had to either turn their business models or scale down their operations. In worst case scenarios, some of them had to completely shut shop in recent times. This is a clear indicator of the fact that monetary investment alone cannot be considered to be the sole driver for success. Startups if mentored and supported at the very initial stage will be the game changers. Even as an investor, your focus should be on integrating various businesses, verticals, services and platforms promote symbiotic growth for all key stakeholders. Our startups need a right direction to continue to grow and succeed.

Development of a dedicated start-up culture – We need to learn from the success of other countries on how their entrepreneurs have carved out in the global arena. In India, we need to push for the growth of similar, start-up/entrepreneurial centric culture as this can ensure a steady influx of entrepreneurial successes. Today’s entrepreneurs are tomorrow’s mentors’ and investors and if today we start creating and promoting a centric approach, we are building ways of creating future success stories.

A bold decision making: Investors definitely need to be much bolder in decision-making. A lot many times, an investor invests in startups that follow the same business model or use the business model that the other startups are already implementing. A smart investor will always place their money on a smart and different start-up. Say a startup that leverages technology to address a market gap, is something an investor should bet their money on as it has a higher probability of being successful.

Cross-pollination of innovations and ideas: The investors should also promote programs like to work with international startups and growth stage companies looking to access the Indian market. It is true that such initiatives will help in cross pollination of innovators and thus bring International concepts and technologies into the Indian market and vice-versa.  Now is the time where we should be supporting work-spaces within a community of like-minded entrepreneurs, local industry expert mentors, professional and administrative services for business establishment, corporate connections for customer development and networking opportunities with potential investors. 

Diversification of investment portfolios and placement of the funds in multiple markets: At a global level, India is a very attractive destination for investors. Investors usually have a very straight investment philosophy. If you find good businesses with sustainable competitiveness run by good management and invest with a long term horizon, you will be successful over the long-run. You also need to be patient, persistent, and invest with discipline.Many market participants seek performance through making short-term bets, but this should not be encouraged.