Rakesh Balaji is 28 and has a seven-year track record as a chip design engineer. He wants to quit his job and start-up with his own company in Bangalore. Dreaming about an idea and marshalling the courage to quit his job with a California-based semiconductor products’ company is hard enough. But Balaji’s toughest challenge yet is to find funding for his idea. Balaji and hundreds of other aspiring entrepreneurs swarmed the TiE Entrepreneurial Summit in Bangalore, earlier this week, as they tried to figure out how to fund and grow companies in a brutal business environment.As a Silicon Valley-like-start-up culture begins to take root in Bangalore, long considered the world’s destination for outsourcing, India’s young entrepreneurs are facing a tough reality. Finding partners, investors and employees is tricky at the best of times. But in a recessionary global economy, it can be simply overwhelming. The nervous energy was evident as young men and women flocked around successful entrepreneurs such as Azim Premji of Wipro and Vijay Mallya of United Breweries who were at the TiE summit. The three-day event, billed as Asia’s largest for entrepreneurs, had 43 sessions and 135 speakers and 22 panel discussions.Entrepreneurs venturing into a wide array of sectors such as security, clean energy, aerospace, leisure and medical systems hung on to every word. TiE, short for The Indus Entrepreneurs, is a Silicon Valley-based not-for-profit founded by successful Indians to help support Indian start-ups by providing advice, contacts and funding. It seemed like Padma Duraiswamy (32), founder-CEO of Bangalore-based Chimera Technologies, which provides services to self-service kiosk developers, was in the need of all three. Duraiswamy was at the TiE event to get “pepped up”, she said. She wants to expand her company, figure out a future direction and muster up some funding. “Should I take the venture capital route for funding?” she wondered aloud. In a gloomy economic scenario, small start-ups have the hardest time, said Sanjeev Joshi, a director at incubating firm Invendis Technologies. Funding is squeezed dry and valuations are at a dismal low.Indian start-ups are badly hit on several fronts. Most of their funding is routed from developed economies, where economic turmoil has taken its toll. And even where funds are available, the appetite for risk has vastly diminished. The scenario has changed dramatically in the last year for entrepreneurs. In Bangalore this time last year, money was chasing ideas, say people in the business. A year later, it is a full cycle and ideas are chasing too little money. As dozens of budding entrepreneurs squelched into bean bags in a crowded corner of the TiE summit, mentor Gururaj Desh Deshpande delivered some harsh advice: “The Americans think entrepreneurship is super easy in India and China, but I can tell you that being an entrepreneur is hard work anywhere in the world.” Deshpande, an influential technology guru and founder of successful American companies such as Cascade Communications and Sycamore Networks, said that start-ups with no track record, who are raising money for the very first time, are going to have a rough time. “Set yourself a deadline and if the money does not come in, give up and move on.” Self-funded Vasuprasad H, managing director of Bangalore-based CelNet, a start-up developing mobile-based applications, was at the TiE summit looking to “network, scout for partners and funding”. Though a market surely existed for the services he provides, Vasuprasad said, small players like him suffered from the lack of marketing and branding.Evidently, different entrepreneurs were at different stages of their journey. Loveleen Arun and Sanjar Imam, founders of luxury travel company ‘Panache’, sought one-to-one mentoring sessions as they charted the growth plants of their 10-people company ‘to its next level’. India’s luxury travel market is just coming into its own, Arun said. The company would need funding to get itself known to a larger target audience and to expand outside Bangalore as well as overseas. As entrepreneurs thronged to an overcrowded mentoring session by Silicon Valley angel investor and TiE founder Kanwal Rekhi, the millionaire deflated the dreams of many aspiring entrepreneurs walking around with their business plans in the ready. He does not do angel investing anymore, said Rekhi who now heads a fund called Inventus Capital Partners. He never invests in an idea anyway, Rekhi revealed, only in the person behind the idea.In the current gloomy scenario, as investors get ultra-selective, the would-be entrepreneur Rakesh Balaji has a plan. He is considering ‘bootstrapping’ or starting up the company with his own money. He says he can ride the initial months with his own savings and, as the definition goes, money borrowed from “friends, fools and family”. saritha.rai@expressindia.com
