Funding Pains at TiE-ISB Connect 2009

Early stage or growth, raising capital has been tough for almost all companies since last October. Declining venture capital and private equity investment numbers over the last several months are evidence — see the latest Grant Thornton report here. For startups, especially, raising venture capital is a challenge even in fair weather. Each stage, from seed through Series A and B, comes along with its own unique hurdles. “There are investment and operational issues at each stage, both for the entrepreneur and the investor. We need to engage in a dialogue on those issues,” says Sateesh Andra, venture partner, Draper Fisher Jurvetson, flagging off the underlying theme for TiE-ISB Connect 2009, scheduled for October 22 and 23 in Hyderabad.

The forum, in its main theme, is asking ‘The Crisis Will Pass…Will You?’ It is a pertinent question. Before the current economic downturn is out, several startups as well as a few venture capital firms, will bite the dust. And going by the rumblings that one is beginning to hear more and more in venture capital circles, the dust is going to kick up quite a storm (more on that in a later post).

Interestingly, the organizers have decided to address funding issues not only at the seed and early stages but also at the growth stage. “It is important to look at the entire lifecycle. Early stage companies will eventually need growth capital, which has its own issues,” says Rajesh Raju, director, Peepul Capital, which is a growth investor.

One of those issues, as most startups will agree, is that these days it is difficult to distinguish a growth investor from an early stage one. Many venture capital investors in India play both ways. Raju, who puts growth deal ticket sizes at between $10 million and $25 million per company, will be chairing a session on growth investing on Day 2 of the event. If you are an entrepreneur who thinks you are ready to raise growth capital, here’s a preview of what to expect at the session.

Other key tracks at the event:

• Workshop ‘Jumpstart Your Venture’
• Seed Stage Funding and Operational Challenges
• Taking India Forward – Entrepreneurs, Andra explains, are to be found in every walk of life, including politics, social service and even the bureaucracy. This session will see entrepreneurial individuals from such areas come in and talk about their experiences in bringing about change.
• Next 800 million Opportunity – This was the event’s theme last year and the quest to discover business models that work for rural markets and social sectors continues. Definitely my favourite track.

See you there.