The Indian start-up ecosystem is booming post 2020. Despite a raging pandemic, start-ups managed to break all odds and touched an absolute new high. New start-ups are cropping up and venture capitalists are also taking centre stage along with them.
India recorded 6 new unicorns in just first week in April. The total number of unicorns currently in 2021 is 10 and April is being hailed as the unicorn month.
In India, what is happening in the start-up world is very bizarre and very amazing at the same time. There are start-up unicorns in every corner of India right now.
New-age start-ups and micro-VCs are a match made in heaven. It’s your choice what side you want to be on because both are the right choices currently.
Why you should become an Entrepreneur.
A healthy and productive exchange is occurring between entrepreneurs and VCs currently where entrepreneurs are communicating ideas very well and are getting immense funding from Venture Capitalists. A trickle-down effect is happening for the start-up community where investors are increasingly interested in seed and series A funding rounds.
2021 is the year of fundraising for entrepreneurs and this is the right time to look for early-stage Venture Capitalists since they have become more accessible.
There is a funding gold rush happening and as an entrepreneur, this is the opportunity to jump in and seize funding with just a solid idea.
It’s the right time to become a micro-Venture Capitalist.
In the investor space, a lot of angel investors are opening micro funds to support early-stage start-ups. As an investor, these micro funds are putting their money in the right place where the potential is high. That place is the Indian start-up ecosystem.
The number of micro-Venture Capitalist funds in India are drastically increasing because of the kind of start-ups coming out of the Indian start-up ecosystem. They are all new age start-ups, and they have products which are very cost effective but technologically powerful and advanced. These start-ups are targeting global markets worth billions.
Set up a fund with a corpus below $30 M and invest in pre-seed and seed stage start-ups.
Investing beyond seed funding like series A will be tough as a new Venture Capitalist because there is currently a lot of aggression in the market. Big corporate VCs are investing heavily in start-ups and the competition is very high.
In the last 3 years, micro-VC’s have invested a total of $341 M in the Indian start-up ecosystem. This money has gone to 566 start-ups and a total of 730 deals have been closed.
Even if you can’t afford a lot of capital, you can help and guide bubbling start-ups by supporting them and offering them valuable resources like unconditional network access, expert guidance, and by assisting in fundraising from other Venture Capotalistss.
In the Indian investors’ landscape, micro-VCs are new age VC’s, a perfect match for new age start-ups.
They are providing risk capital which bigger VCs possibly cannot provide.
Big Venture Capitalists are investing a lot of money. But fledgling start-ups are not eligible for such large funding. Also, the founders are probably very raw, they don’t have the right knowledge. Most probably their pitches get rejected. These start-ups are considered high risk but promise high returns since they are backed by new age, enthusiastic, solid ideas in the tech domain.
Micros VCs seed funding these start-ups have high possibility of good returns because it is the season of unicorns. Your capital will be small, but you will be writing seed fund checks for the next generation of innovative start-up owners. There is a high chance that your checks are going to a worthy place.
As an example, iSeed is a Micro Venture Capitalist fund started by Utsav Somani who was a part of AngelList. iSeed recently got its second fund, 50M $. Which will be invested in the Indian start-up ecosystem.
What’s in it for me?
There is tremendous funding opportunity for entrepreneurs in 2021. Also, the next 10 years will be the years for India’s tech entrepreneurs. So, if you want to become an entrepreneur, the tech domain is most lucrative at the moment.
If you want to become a Venture Capitalist, the time is right to become a micro-VC. As a micro-VC investor, you can invest in start-ups who are in the absolute fledgling stage. You could also act as a mentor or first investor. Capital will be low to invest in this stage.
New-age start-ups and micro-VCs are a match made in heaven. Its your choice which sides you want to be on because both are the right choices at the moment.