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Incubator Funds in India: Real Estate & Infrastructure

Posted on Thursday, Nov 15th 2007

Pretty much wherever you look to set up your entrepreneurial venture in, at this point, in India, you are looking at expensive real estate. I have heard from entrepreneurs who are struggling to rent 1,500 sq. ft of space to start their ventures up.

Therefore, imagine how valuable it would be if you could sublet from an incubator that has dealt with the down payments, furnishings, telecom needs, etc. for say, a 10,000 Sq. ft. space that is then parceled out to 5-8 portfolio companies? Or, the incubator can look at the real estate as an investment opportunity, buy it, and then sublease it out. In fact, on second thoughts, I would do the latter.

What I am getting at is there is far too many obstacles on the path of entrepreneurship right now. It would be very useful if incubator funds can take the real estate / infrastructure one off the table.

Again, from my experience, when I started DAIS in Calcutta in 1994, it was an absolute nightmare to get space. Once I managed to get the space, it was actually reasonably priced. However, telephones were impossible to get. It took me 6 months to get a landline. Internet connection was hideously expensive and VSNL, the monopoly provider at the time, did not know how to configure it, because we were their first client in Calcutta.

Now, Real Estate has become expensive, but telecom has become easy and affordable. Either way, I would say, the drain of energy that DAIS caused me in its early days gives me profound appreciation for the entrepreneurs who are trying to set up ventures in India, and looks like, right now, Real Estate is a bottleneck.

Something that I suggest the incubator addresses.

Of course, this restricts us to a model where the Incubator Fund would operate in one city only. Meaning, we need multiple Incubator Funds operating in each of the major metros. At least, in Bangalore, Pune, Chennai, Hyderabad, Delhi, and Kolkata.

This segment is a part in the series : Incubator Funds in India

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BTW, have you looked at NirmaLabs?

Sumedh Thursday, November 15, 2007 at 11:48 PM PT

I have heard of Nirma Labs, don’t know of their precise workings.

You will see when I discuss the fund structure, that Nirma Labs is perhaps not the kind of model I am after.

But perhaps I am wrong. I would love to be wrong on this one.

Sramana

Sramana Mitra Friday, November 16, 2007 at 12:50 AM PT

[…] Incubator Funds in India: Real Estate & Infrastructure? […]

Early Stage Technology Entrepreneurship and Incubators in India at VentureWoods Sunday, November 18, 2007 at 11:21 AM PT