regular readers have probably observed that I love to make
this column as interactive as possible, and lots of times,
I share insights and inputs from readers, especially questions
and comments that would be of interest to a wider audience.
I recently initiated one such chain of mails that I exchanged
with a wannabe entrepreneur that I will share here. The identity
of person mailing me is masked per his request.
am a regular reader of you column in Express Computer. Many
times I was thinking of writing a mail to you, but couldn’t.
Today the time has come to do it. I work at a MNC specialising
in software services in India. I currently concentrate in
the area of image processing focusing on security system,
industrial automation, etc.
have been toying with the idea of starting a software company
focusing on product development for a while. I thought of
healthcare and security area and in my area (image processing).
Request your help in getting any information in this regard.
Please do not mention my name if you are publishing it your
I regularly receive mails from individuals claiming to possess
an idea for the ‘next killer app,’ asking me for investments,
I was intrigued by the note from Dr. No and I responded with
the following mail.
for your mail and kind words about my write-ups.
idea really sounds intriguing. I am assuming that you are
already working in the field on you want to start the product
you can get any external inputs, you will have to begin to
address some of the common questions that a VC (Venture Capitalist)
or investor is going to ask you:
invest in you?
do you bring to the table?
is going to be the ROI (Return on Investment)
course, people are also going to ask you about your business
plan. Do you have one? If so, has it been reviewed by others
in the industry?
exchanging this note, Dr No responded back saying that the
questions I had asked were exactly the kind being asked by
the VCs that they had approached. He went on to add that the
venture was being planned very carefully. With over a decade
in the industry, he had gained a gut-feel for the market and
wished to explore developing a product in an area which he
understood. Being a bit risk averse, he along with his friends
were moonlighting on the project during their spare time,
they had also invested their own resources to employ a few
engineers to develop the product. After they got sufficient
traction, they were planning to approach prospective investors.
this exchange, I began to realise that Dr No and his friends
had the right perspective on entrepreneurship and new ventures.
Though they were on track towards attracting the interest
of a VC, they still had a few miles to travel.
venture capitalists rarely invest in any venture that they
don’t have a gut-feel for. They also expect the entrepreneurs
to be fully vested in the venture before opening their purse
strings. What it means is that the entrepreneurs should be
able to demonstrate their complete commitment to the project
either in terms of having a workable solution or product that
the VC’s fund will help market, or be involved fully in the
project, with everything to loose if the venture failed.
it basically means is that part-timers with little to lose
if the venture failed have lesser chances of attracting a
serious (unless the product is already finished, in which
case the VC’s funds will just help outsource the manufacturing
this article does not even attempt to give a big-picture overview
of what it takes to attract venture funding, with the few
exchange of notes with a prospective entrepreneur, I hoped
to demonstrate one small facet of the processes involved.
As always, readers are welcome to add their thoughts or to