Raghavan, who works out of  Singapore and Mumbai, has been angel investing in Indian startups for about four years through the Delhi-based Indian Angel Network (IAN). It is not clear whether he continues to be associated with IAN, though he no longer seems to be listed as a member on the IAN website. Prior to becoming an angel investor, Raghavan, led Accenture India’s domestic business as managing director of the company. Amit Patni currently heads Mumbai-based Nirvana, an Internet and mobility focused venture capital firm that invests in the early and growth stages. Nirvana is backed by the Patni family, who recently sold Patni Computers to iGate Corporation.

“We had earlier announced that we would be looking at enlisting the support of six to seven angel investors to join our Charter Angels program. As Shravan and I met potential angel investors individually, we were pleasantly surprised by the strong support we received and finally ended up signing up almost double that number,” Ravi Kiran, co-founder of VentureNursery said in a press release. Kiran, former CEO of Starcom MediaVest’s South East Asia and South Asia operations, teamed up with Fame Cinemas founder Shravan Shroff to launch VentureNursery in March.

Applications for the accelerator’s maiden bootcamp closed on April 23 with 120 entries from 17 cities. The final shortlist of between five and eight startups will be announced shortly.

Here’s the list of charter angels at VentureNursery:

1. Amit Patni, co-founder and chairman, Nirvana Venture Advisors
2. Anand Ladsariya, CEO and promoter director, Everest Flavours
3. Arihant Patni, director, Nirvana Venture Advisors
4. Ashok Kumar Damani, co-founder, K Damani Group of Companies
5. Bhanu Chopra, founder, Rate Gain
6. Bharat Banka, CEO, Aditya Birla Private Equity
7. Kaushal Kumbhat, managing director, FMS Group
8. Nitin Agarwal, managing partner, N M Fashions and CEO, Devesh Agriexim
9. Sadeesh Raghavan, Member, global advisory board, Acumen Fund
10. Sanjay Mehta, CEO, MAIA Intelligence
11. Siddharth Raisoni, executive director, SGR Advisors
12. Sameer Brij Verma, vice president, Nexus Venture Partners

Social networking site Facebook will go public on the Nasdaq on Friday, ringing in what is being tipped as the largest ever initial public (IPO) offering by a technology company. The final offer price is speculated at between $34 and $38, which means that the Menlo Park, California-headquartered company could end up raising nearly $16 billion.

The imminent IPO spells massive returns for venture capital investors such as Accel Partners, Greylock Partners, Elevation Partners, serial entrepreneur Mark Adreessen and his firm Adreessen Horowitz and, Kleiner Perkins Caulfield and Byers, who invested in the company across multiple stages.

Ahead of the IPO, catch up on what’s been written around the most exciting technology IPO out of Silicon Valley since Google in 2004, via Themeefy’s magazine on the listing:

What’s Themeefy? It’s a personal publishing Web 2.0 tool developed by Pune-based startup Sievelogic Software Technologies.  The company was bootstrapped in April 2010 by former Symantec executive Titash Neogi. It has also developed Bibkosh, a knowledge networking platform that allows users to connect with people on the basis of ‘what they know’ as opposed to ‘who you know’.

Tell us what you thought about the Themeefy app?

The main event in June is expected to see the participation of over 40 speakers from Asia and Silicon Valley and over 1,000 delegates. Some of the speakers confirmed for the event include Amit Anand from Jungle Ventures; Ben Gillenwater, head of content at Research in Motion; James Chan from Neoteny Labs; Monica Tsai from SingTel Innov8; Saumil Nanavaty, CEO of Chalkboard; and Federico Folcia, founder of Roomorama. Topics of debate and discussion at the two-day event include startup growth and scaling, lean startup development and mobile web and applications.

You can still sign up to attend the event. Follow the link to register.

Here’s a quick recap on what happened at the six satellites, courtesy of e27:

• Nine startups survive the test of fire to pitch at Japan satellite
• Fourteen startups gear up to pitch at first Taiwan satellite
• Vietnam satellite sees promising B2B satellites to pitch
• Fourteen startups get their five-minute pitch at Singapore
• Seven startups for the first Philippines satellite
• Indonesia satellite shows maturity of local ecosystem

Image Courtesy: e27

The company launched its services under the eHealth Access brand name in January this year. The company’s founder, S Jayadeep Reddy, a pharmaceuticals and hospitals executive, started Dialurdoctor in 2009. “Dialurdoctor provided only tele-doctor services. When we decided to diversify into video, chat and email, we rebranded as eHealth Access,” Reddy told StartupCentral via email.

Users need to sign up in order to consult doctors. The site offers three kinds of subscription plans — individual, doctor and corporate. Under the individual plan, a single consultation costs Rs 99 and a yearly family consultation plan costs Rs 999. The company has not set revenue growth targets for the next 12 months but targets 1 lakh customers by the end of the current financial year, including corporate and retail customers. “Though our core business is corporate, we have seen consistent growth in the retail area with better ecommerce options,” said Reddy.

On fundraising plans, Reddy said that since the company currently in expansion mode, it has not yet planned for its second round of funding. “Investors are approaching us, but we are looking to start discussions only after third quarter,” he said.

The company claims 33,000 customers and 27 corporate clients at present. It also sets up on-premise health kiosks and conducts health camps enable easier access to its services. Expansion plans in the medium term include an office in Bangalore and other metros.

Image Courtesy: eHealth Access

Facebook kicked off its IPO roadshow on Monday and is expected to start trading on the Nasdaq next Friday under the ticker symbol FB. In case you missed it, check out the roadshow presentation. The company plans to sell 337 million shares priced at between $28 and $35 a share. The Sao Paulo, Brazil-born Saverin’s move to give up US citizenship may help him to save on tax when Facebook goes public, says Bloomberg. Saverin co-founded Facebook in 2004 with CEO Mark Zuckerberg at Harvard University but subsequently moved out of the company due to differences of opinion.

Meanwhile, Reuters reports that the upcoming IPO may already be oversubscribed, quoting unnamed sources. In another report, though, Bloomberg suggests that the IPO has generated lower-than-expected demand from institutional investors, also quoting unnamed sources.

Earlier, Mark Zuckerberg, while addressing investors at the Silicon Valley leg of the IPO roadshow, said that his first priority post-listing would be to improve the company’s mobile application. Investors in Wall Street have raised concerns about the social networking company’s ability to generate revenues from mobile users.

Image Courtesy: Matt Harnack / Facebook

The accelerator is also in talks with three early stage venture capital firms to partner the initiative, of which two have already confirmed their participation, Apoorv Ranjan Sharma, executive vice president at Venture Nursery, told StartupCentral.

Out of the 120 applications, about 47 per cent have come in from the Mumbai and Pune region, while Bangalore and Delhi accounted for about 15 per cent each, said Sharma. The majority of applications, approximately 40 per cent, came through social media channels, while references accounted for about 25 per cent.

In terms of sector diversity, about 40 per cent of applications are from the retail sector, of which ecommerce startups constitute about 16 per cent. The other sectors include consumer technology, media and entertainment and education. “The typical profile of applicants is professionals who have professional experience of between four years and 10 years, though we also have a couple of applicants with more than 20 years of experience,” he said. Another interesting statistic is that 29 per cent of the total applicants have been involved in at least one startup in the past.

In addition to applications for the 13-week bootcamp, the accelerator has also received two dozen applications for its parallel track programme, which is designed for startups who are at a relatively advanced stage and may not need the 13-week programme.

The accelerator’s aim is to conduct a minimum of two bootcamps in a year in Mumbai with a target to accommodate up to eight start-ups in each program. At the end of each boot camp, successfully graduating start-ups will be evaluated for investment by a group of committed angel investors. VentureNursery will pick up sweat equity in the startups that participate in the bootcamp and Kiran and Shroff are also committed to investing in up to three startups that graduate from the programme.

Shroff founded and led Mumbai-based multiplex player Fame Cinemas, which was acquired by Inox Leisure in early 2010. Kiran led Starcom MediaVest Group’s South East Asia and South Asia operations as CEO and is a co-founder of Mumbai-based growth advisory firm Friends of Ambition. Both are also active angel investors through Mumbai Angels and Indian Angel Network and have made 18 investments between them.

Image Courtesy: VentureNursery

Last month, International Finance Corporation (IFC), a unit of the World Bank, announced a slew of investments in small and medium enterprises-focused private equity funds in India. The investments are part of IFC’s ongoing limited partner investment programme that backs SME-focused investors. So far, this year, the developmental finance institution has announced investments worth $70 million in four funds and is slated to announce a couple more. Ayaan Adam, head of financial institutions & private equity, manager financial markets, South Asia, spoke to StartupCentral in Mumbai about the institution’s approach to private equity and why its exposure to venture capital funds is still small. Edited excerpts:

As an institution with a developmental agenda, how do you approach private equity investing?

First, let’s step back. IFC has three businesses today. The first is the investment business, which is direct and has two components. The first is where we take direct equity in a company or give them a loan. The second is our fund-of-funds, which is very small. So, for example, if you are looking at our equity portfolio, which we do directly, and our fund-of-funds, the latter is 25 per cent of our overall investments. In both cases, we invest from our own balance sheet.

The second business that we have is called the advisory business, where we provide advice to companies and it cuts across many different levels. It is a very deep business.

The third one is the asset management business, where we actually mobilize money from large, external limited partners (institutions that invest in private equity funds) and invest it on their behalf in emerging markets. The $1 billion Global Infrastructure Fund that we are currently raising is an example.

Our mission in private equity is to start the industry, set the norms and establish the general partners (industry term for managers of private equity funds). If you look at the India context, we’ve backed funds like ICICI Venture and, you know, all of the old funds. We are one of the first limited partners in this market. We were also the first limited partner in South Africa, Mexico, Brazil and China. We work with the managers and learn a lot. We make mistakes as well.

Can you elaborate on some of the lessons and global best practices that have evolved as a result of those experiences?

In early 2000-2001 we took stock. All of the managers that we had invested in were first-time fund managers. So we took stock of which groups worked, why they worked and why they didn’t work. And then we applied it to our businesses. Now when we assess an investment manager, we say, it’s great to have investment experience but we also need somebody who has run companies. Because once you’ve made an investment, you need somebody who is going to go there and work with the management of the investee company. Value is not going to get created by just making an investment. It’s not a stock market investment. In the private equity game you need to really work with the entrepreneurs. You need to gain their trust. The sweat part of much more important than the money that you’re putting on the table. So we look at the team, the composition, their ability to stick together and we look at the incentive structure. We want to make sure that it is well dispersed.

What has been the India-specific experience?

Let me talk about the general experience of limited partners in India. Yes, it has been a bit up and down. A lot of limited partners came in during the early nineties and so forth, it was post liberalization and lots of money did fly into India, both on the listed side and on the private equity side. A lot of general partners were first time fund managers, who did not have a lot of experience. Nobody, even limited partners, had a lot of experience. Also, there was the issue of the entrepreneurs. They were not open to the concept of private equity investors coming in and making money in 4-5 years. I think that you will see that the funds that were ending in the early 2000s would have mixed reviews. Some have done okay. Some have done well. All of them have learnt.

In India, I would look at vintages. Funds from the vintages 2001 till 2004, that were exiting at the height of the market, in 2006 and 2007, have done very well. There are a number of very good managers in India. India Value Fund has done well. Baring India has done well. And they have backed truly entrepreneurial companies that did multiple expansions.

So if you look in totality, you cannot generalize in India. Vintages are important. There are coincidences with the stock market but it doesn’t mean there were bad managers. If there were 100, there are maybe 10 that were good. And you should have just had a better selection process.

What is your checklist for evaluating a fund or fund management team?

One, if a fund manager has already raised more than 50 per cent of the fund from private capital sources, it is very difficult for us to justify an investment. As IFC, we would ask what additional value would we add to these managers. Our job is not to displace the private markets. Our job is to put our stamp of approval so that the manager can attract more private money. But, we also can’t just back a fund where we are the only limited partner. We usually look for four or five other limited partners to come in. And we get there for the most part. So that’s the first test; can they raise money?

Then, we look at the business model; is it sustainable? We do a rigorous analysis of not just the fund manager and their track record, but we also check their background against the business thesis. Given this background, can they implement the strategy? If we feel there are gaps, we make recommendations. Sometimes we start with a team of two people and end up with a team of five, based on those recommendations.

The third thing is that we look is the market. Last year we were looking at fund managers who were only focused on Tier II cities. We visited every state and asked the fund managers to put together a synthetic pipeline of companies.  We went in interviewed those companies.

How many funds will you invest in this year?

We’ve already invested in Ambit Pragma II ($20 million), Zephyr Peacock India II ($15 million), Forum Synergies ($15 million) and Pragati India Fund ($20 million). We’ll probably do another two or three. This includes two climate change focused funds, of which one is a venture capital type of fund (may invest $5 million in CIIE-managed Infuse Capital).

Why is IFC’s exposure to venture capital funds in India so low?

We don’t have a lot of experience in venture, globally. We’ve only done one in China, CDH Investments, which was very successful actually. We’ve done a couple in India; APIDC and Aavishkaar. I think we’ve toyed around doing one in Russia but we decided against it. And then we’ve done one in Mexico and one in Brazil.

If you look at the venture capital model in the US, it’s clustered around really two areas – the Bay Area and the Cambridge Massachusetts area. And maybe pockets here and there in Seattle. So a venture capital firm can just focus on that area. In the venture capital model, you need to make investments in 40-50 companies and get 3-4 great exits. When you look at a country like India, with its population, the entrepreneurs are everywhere. So it’s very difficult and we’re struggling with that. We’re trying to figure out what can we do in this space. It’s not that we’re averse to it. If we do venture capital anywhere, India will be one of the places. But we want to do it right and we just don’t have the formula.

Image Courtesy: IFC

Aavishkaar is currently also raising its second microfinance focused fund, the $80 million Aavishkaar Goodwell II. The Aavishkaar India II fund, in which Cisco has invested, is a generalist fund. Vineet Rai, founder and managing director of Aavishkaar, had told StartupCentral in February that the fund had raised commitments of $70 million as part of its first close and investors include International Financial Corporation (IFC), KfW Bankengruppe and Cisco Systems. “Cisco has been a fairly active limited partner (institutions that invest in venture capital funds) in India for some time,” he had said at the time. Over the past few years, Cisco, said the press release, has committed up to $200 million in venture capital investments here. Nearly half of this has already been deployed.

Aaviskaar India II fund has already invested around $6 million across four deals, which includes solar-powered ATM machines manufacturer Vortex Engineering.

Read our previous post on Aavishkaar’s fundraising and its future plans for a global fund.

Launched in April 2011, Pragati will invest in small and medium enterprises in the economically weak states of Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal. Deal ticket sizes will range between $5 million and $10 million and the fund will pick up equity stakes of between 25 per cent and 35 per cent, Narayanan Shadagopan, founder and managing director of Pragati Equity Advisors, which manages the fund, told reporters at a press conference in Mumbai today.

Some of the sectors that the fund will focus on include capital goods, specialty chemicals and waster water management, said Shadagopan. The emphasis will be on growth stage businesses that have the potential to create jobs and improve income levels in the eight specified states. “It is an extremely important investment for IFC. Small and medium enterprises in India’s low-income states are constrained by limited funds,” said Rashad Kaldany, the organization’s vice president of global industries. The companies that the fund would invest in would typically have current revenues at between Rs 50 crore and Rs 150 crore (between $10 million and $30 million) and it will by and large remain sector-agnostic in its focus. It expects to stay invested in portfolio companies for about six years and anticipates most exits taking place through the mergers and acquisitions route.

For IFC, which is an active limited partner (investor in private equity funds) in the Indian market, Pragati is part of a bouquet of seven local private equity funds that the institution has in the pipeline for investments this year. See details of the other six below:

• Ambit Pragma II: The growth capital, small and medium enterprises-focused fund has a target corpus of $150 million. IFC has committed an investment of $20 million.
• Zephyr Peacock India Fund III: Raising a $150 million corpus to invest in small and medium enterprises. IFC has committed $15 million.
• Climate change-focused funds: Plans to make undisclosed commitments to two unnamed climate change-focused funds. Further details were not disclosed.
• Generalist fund: Will make an undisclosed commitment to a generalist fund later this year, for which further details were not disclosed.
• IKMC: IFC has committed up to $15 million in India Knowledge Manufacturing Company (IKMC), which has a target corpus of $150 million. The fund will focus on sectors such as healthcare, information technology and cleantech. IKMC will invest through Forum Synergies India Trust, a SEBI-registered venture capital fund, which in turn is managed by Forum Synergies (India) PE Fund Managers.

Overall, the institution expects to invest $100 million as a limited partner this year, apart from other direct investments, said Ayaan Adam, head of financial institutions and private equity and manager financial markets for South Asia. Earlier, it also made a $20 million commitment to bottom-of-the-pyramid focused venture capital fund Aavishkaar’s $120 million second fund.

Image Courtesy: IFC

The draft framework of the regulations, dubbed AIF Regulations, had been opened to public debate on SEBI’s website last August. The final framework takes into account several changed suggested by the private equity and venture capital industry, chiefly through its representative body Indian Venture Capital Association.

A look at the salient features of the regulatory framework in brief:

Scope of the Regulations and Applicability to existing funds

• AIFs whether operating as private equity funds, real estate funds or hedge funds, etc. must register with SEBI under the AIF Regulations.
• SEBI (Venture Capital Funds) Regulations, 1996 (“VCF Regulations”) shall be repealed. However, existing VCFs shall continue to be regulated by the VCF Regulations till the existing fund or scheme managed by the fund is wound up.
• Existing funds not registered under the VCF Regulations will not be allowed to float any new scheme without registration under AIF Regulations.
• Existing funds not registered under the VCF Regulations which seek registration but are not able to comply with all provisions of AIF Regulations may seek exemption from the Board from strict compliance with the AIF Regulations.

Categories of Funds

1. Category I AIF: Those AIFs with positive spillover effects on the economy, for which certain incentives or concessions might  be considered by SEBI or Government of India or other regulators in India; and which shall include venture capital funds, SME funds, social venture funds and infrastructure funds. These funds shall be close ended, shall not engage in leverage and shall follow investment restrictions as prescribed for each category. Investment restrictions for VCFs are similar to restrictions in the existing VCF Regulations. Depending upon the specific need of each type of funds, Category I funds shall be given concessions.
2. Category II AIF: Those AIFs for which no specific incentives or concessions are given by the government or any other Regulator; which shall not undertake leverage other than to meet day-to-day operational requirements as permitted in these Regulations; and which shall include private equity funds, debt funds, fund-of-funds and such other funds that are not classified as category I or III.  These funds shall be close ended, shall not engage in leverage and have no other investment restrictions. This forms the residual category, funds which cannot be classified either as Category I or III will be classified as Category II.
3. Category III AIF: Those AIFs which Funds including hedge funds that are considered to have negative externalities such as exacerbating systemic risk through leverage or complex trading strategies. These funds can be open ended or close ended, may engage in leverage subject to limits as may be specified by the Board. Category III funds shall be regulated through issuance of directions regarding areas such as operational standards, conduct of business rules, prudential requirements, and restrictions on redemption, conflict of interest as may be specified by the Board.

The AIF Regulations will be applicable to all pooled investment vehicles, except specifically notified vehicles such as mutual funds, CIS schemes, family trusts, ESOP trusts, employees welfare trusts or holding companies, which are directly regulated by any other regulator in the country.

An Alternative Investment Fund will be required to have a minimum corpus of Rs 20 crore. The minimum investment by an investor in such a fund has been stipulated at Rs 1 crore. Each fund should not have more than 1,000 investors at a time. The fund manager or sponsor of the fund will have to commit 2.5 per cent of the initial corpus or Rs 5 crore, whichever is lower. The regulations also bar the fund manager from adjusting the commitment through the waiver of management fees (private equity fund managers typically charge 2 per cent of the fund corpus as management fee).

The regulations cap investments by a single fund in a single investee company at 25 per cent of the fund corpus. They also restrict the fund from investing in associate companies.

For more details, download a PDF copy of the SEBI press release issued last evening.