INDIA: On Transcontinental Times’ live show ‘Smart Entrepreneurship Decoded,’ this week, Indian investor, Vikram Duggal joined the discussion on investment advisory and the culture of the startup ecosystem with host and Indian entrepreneur, Nalin Singh.
Vikram Duggal from Kolkata is the managing partner of Ekcle Ventures and Ekcle Advisory Services. He has a group of investors who he brings together for small seed and pre-seed deals. He participates and co-invests with other investors in larger deals, and then there is his advisory firm — where he advises firms when the deals get really big.
Here are some excerpts from the interview with Vikram Duggal –
When asked what was his trigger to step into the investment sector after coming off of a corporate background, Duggal said:
“I started off with one of the companies at Pune — a digital security startup I worked with. So that must have been the genesis, that got the bug of entrepreneurship or startups into me, subsequently, I had to go back to Kolkata, which does not have many corporate opportunities to offer, that’s when I decided to start out on my own, basically, work with startups, soon one thing led to another. I was on board as a mentor and advisor with IIM Calcutta and IIT Kanpur innovation centre, I was also helping United Seed Fund then, later angel investors happened and now we have a network of our own called — Eckle ventures and services.”
The pilot phase – getting the first few investors
“I would say before gaining the trust of investors, there have to be certain credentials, so for good 2-3 years I spent, as part of the ecosystem learning the rules, being associated with entities like IIT Kanpur, you end up meeting whole bunch of people and you learn from them, I am still learning every single day, from every interaction we have with entrepreneurs and then you start making your own investments, and when returns start showing, that’s when one can get that kind of confidence and go to others and say that — be a part of our network. It was both ways, on some occasions batchmates told us that we picked some interesting companies so next time we have a good deal, share with them. And on some occasions, we pushed people and said — we would love to have you on our platform.”
“It takes a couple of meetings and interactions, they go through the financials, then we ask investors for the interest — how much are they ready to participate. We typically have a higher ticket size since we have fewer investors and bigger names with value, so depending on the ticket size everyone comes with their amount, then we combine all the amount and issue a common term sheet. Once the entrepreneur says okay, then we start with the financial and legal procedures, then the share building agreement is shared and signed, post which the finds are transferred.”
When talking about calling for investors, Duggal also explains how the structuring of their deals takes place.
What about a company’s pitch makes you speak to them again?
“Definitely we are looking for what the innovation is or the product differentiator is, but moreover we are looking at the scalability — how big can the company become, whether it can become a unicorn or remains an MSME. Secondly, what’s really the vibe we’re getting from the founders — dedication, passion, commitment, perseverance, ethics and transparency.”
But when asked to choose between the person and the idea, Duggal said, “Always the person, if the idea is great and if you put a lousy person behind the wheel, you’re not getting anywhere. But if you have a great guy behind the wheel, he’ll still manage to make something of it. So it’s always the person.”
When Singh asked Duggal –
What you do is something niche, so how do you scale something service-oriented and knowledge offering?
“The whole ecosystem is going by leaps and bounds. This year we have at least 26 companies that have reached the status of a unicorn, and in the past 7 years, we have had around 50 unicorns, which means almost half the figure happened in the last one year, so that’s the kind of way companies are scaling up, so there will be need of as many advisors and investors. There are mid-aged people saying, hey let’s not do a regular job now, thinking of doing a start-up, it is now or never — so with a lot of new things there will always be the demand for such services, accelerators or transactions advisors. Angel networks are coming up, there are so many new venture capital funds launched. People get influenced by their friends in the network who gained a lot from investing. We are getting a lot of fresh blood in the ecosystem, I think India is on the cusp of a boom in terms of startups.”