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Incubator Funds in India: Management Team

Posted on Friday, Nov 16th 2007

This is going to be the last segment for this series on Incubators in India, and it tackles the key to making such incubators work. We have said, that we need concept engineering, engineering management, product marketing, sales, biz dev, legal and financial talent in the incubator management team.

I am going to, therefore, propose a different structure for the incubators than what traditional venture funds have.

Venture Funds, generally, are structured as “Partnerships”, with a hierarchy of Managing Partner, General Partners, and
Analysts / Associates / Principals.

Our incubators, however, need to be more of an “operating company” structure. In fact, the skill-set that is of least significance in an incubator is that of a banker. Instead, what we need are experienced entrepreneurs, marketeers, sales and biz dev stars, as well as good engineering managers who can bring a new product to market.

In terms of location, I would go so far as to say that it is okay for a portion of this management team to be located in Silicon Valley, especially if the concept engineering / marketing / sales / biz dev challenges happen to be focused on the US market.
Most certainly, the engineering management, legal, financial resources, as well as resources such as telemarketing, telesales,
etc. need to be located in India. On the other hand, if the entire focus of the incubator turns out to be on domestic producer – domestic consumer businesses, then keeping the whole team in India would be desirable.

In the end, I hope that multiple such incubators sprout up, and each takes shape from the personality and expertise of its management team. A networking equipment focused management team is better off not doing consumer internet, and founders of Bazee.com are likely not to venture into CAD or EDA. Entrepreneurs, similarly, would ideally have choices of aligning with incubators that match their focus area. Similarly, service industry entrepreneurs would need to be careful about getting into product incubators.

Of course, you do realize, that the whole series that I have just written is a “vision”. What exists today in the Indian context is well short of anything remotely equivalent to this.

I hope, however, that the venture money that is sitting around collecting money-market interest right now would recognize the need for catalyzing the early-stage venture industry with something more than their apathy and neglect.

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

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[…] Legal & Financial Structuring?, Real Estate & Infrastructure, Adult Supervision?, Fund Structure?, Management Team, SynthesisMy first experience of technology entrepreneurship in India was in 1994 while I was still […]

Incubator Funds in India: Synthesis - Sramana Mitra on Strategy Sunday, November 18, 2007 at 10:46 PM PT

Hi Sramana, Nice series of articles! Having recently spent close to 3 years in Bangalore (part of the time as a Product Mktg consultant for tech start-ups), I have seen first hand the need for entrepreneurs to find investors who can combine funding with hands-on operational guidance. Your proposal for an “operating company” structure for the incubator fund is a good one.

I also like the idea of having this team geographically distributed. There is a lot of entrepreneurial energy in India right now, and a lot of these ideas have global relevance. And not all of these ideas can be monetized by focusing solely on the Indian market.

The million $ question is how to make this happen. The VCs who have the venture money either just pay lip-service to the idea of providing strong operational guidance, or believe that they have all this in-house. Would like to hear your thoughts on how to catalyze a shift in their thinking.

Dharma

Dharma Kuthanur Tuesday, November 20, 2007 at 3:10 PM PT

Million dollar question indeed, Dharma. I’m trying to catalyze through the blog and through my network.

I would encourage all of you to do the same.

A few “pilot funds” showing early success would be important.

Sramana

Sramana Mitra Tuesday, November 20, 2007 at 3:45 PM PT