 Including session of this workshop in which we have on the panel, Sonita Singh, a friend from men, Dr. Anita Gupta, the senior scientist from Department of Science and Technology, Professor Amarna, whom I have requested to chair the panel, moderate the panel discussions. Mr. Pravin Gandhi, our friend and mentor and director on the Board of Science and of course I myself. So since you have already heard the three of the panelists earlier in the day, I would like to request Pravin Bhai to share some of his thoughts, particularly on angel funding and VC funding as seen from the funder's perspective, what they look for amongst the entrepreneurs who come to them for funding and more importantly, what kind of support they expect the incubators to give such people in the matters of funding, networking, etc. So Pravin Bhai, could you just share your thoughts for five minutes? Just as a matter of background, I have been involved in funding early stage companies since year 2000 and personally I have been an entrepreneur the life before that, which are many years and currently also we are running a fund which is again meant for early stage. So I have one great amount of interest in this space and a great amount of empathy for this space. What is and pardon my I am not if at all I sound critical, please don't take it personally but you know I just sometimes like to call Spade a Spade and you know show my frustrations. So one of the biggest learnings that we have had since we started this fund is that the quality of entrepreneurs that we create are just not up to speed. Lot of the stuff that should have been done prior to them becoming somewhat of a full and running entrepreneurs, we end up doing to the extent of even you know what it means about shareholding in a company, registration of a company etc etc etc. So that is very frustrating but besides that those things can be resolved but fundamentally I believe that I think that our historically our thinking in our families really does not provide of an independent thinking of commerce because there are joint families and people tend to depend on the elders to decide what is to be bought and what is to be sold. Like America you get that education of what is revenue, what is expense very early in your life. So one lesson that I believe that we all can learn is that some of our incubation program must address that issue that largely the entrepreneurs that we do create here I mean not in the IIT but we do have lot of entrepreneur but that are generally with a trading mindset that can I take one piece from here and put it here and earn some commission. Now in that scenario it does not require it is a very opportunistic business. So in that you do not think about creating an enterprise that is that I have to worry about capital I have to distinguish between revenue, cash flow, expense, how much money will I need and so on and so forth and it is surprising and I am not an expert at what people learn in the entrepreneur 101 wherever it is being taught that these things are being taught in the manner that they should be taught. It is also people do not seem to understand I mean forget the quality of the weather you know I am not a big fan you know the VC pitch should be in this form and that form and so on and so forth but the fundamentals must be clear. But people do not seem to know how much money it will take to run their business and if they do not know then they will not create enterprises understanding what kind of funding will it take to do that particular business they have in mind and if they say that oh I want to do this but it is going to require if they knew that it requires 10 million dollars I would not even go anywhere near it you know people should not waste time because if that is what they want to do they must size their business according to what is the capital that is available in the market. The other I think thing I believe is perhaps lacking is that the importance of teams building a team of entrepreneurs or when you start a company building a team as sponsors is extremely important you know we tend to be all loan rangers saying that oh I have got this great product and once I have designed it you know there will be a queue in front of my office for people to buy that does not work. So it to me creating teams is very important at the start of stage and these must be complementary teams not one technologies and another technologies who will keep fighting as to whose technology is better and the enterprise will never take off. So I think a complementary team at the start with a commitment to live through that enterprise is very important because there will be good times and there will be bad times and if you say oh I am going to go hire marketing manager from Indus and Lever and all that is all pipe dream because where are the people there is nobody out there who will join unless you demonstrate a successful enterprise. So till that time you are going to have to rough it out and so that is why the team is very important. The counter for that is and I think that is another thing that incubators should worry about is to provide counseling continuous counseling to the teams because we are all human beings. I have been in partnerships all my life and I have seen ups and downs and unless if the two partners or the three partners are very very opinionated and if I say the same then that partnership is going to break. It is human nature that when there is success some partners will take credit and when there is failure it is obviously somebody else is fault. So continuous counseling through this incubation phase as to why it is important for them to stay together which is you know because this is like a marriage because you like to believe that this is a long term association and you are going to have to do give and take and that I think is another very important thing that we should all inculcate in these teams that are the other big issue that I you know is with us as Indians is that we do not like to fail or we do not like to admit that we fail. I think that that is another mindset change that must happen at the academic level is that it is okay to fail that you will learn something from failure and you will go on to do something else or you will make your decision based on some different data than you did the last time. So you know it is important for people to learn and it is okay to fail but if I say that I am going to grade you on the success of your entrepreneurship if there was some grading in the in the in that school then perhaps you know it will just reinforce the motivation to say oh if I fail I get two marks but if I succeed I get ten marks I think it is one must grade them based on the process they went through I mean Sabeer Bhatia had one hotmail after that he has consistently failed it does not make him good bad or otherwise that is the way it is one more pardon me to say this because you know we find these with the entrepreneurs so that is why I am just sharing is that there must be specialized training schedules or training modules in the entrepreneurship course because like for example web designing search engine marketing what all especially if you are doing an internet kind of a business and that is more than likely you will do and not go and build a hotel it is surprising to find how weak most of the entrepreneurs are in this areas. So you know whether it is about product marketing technology marketing internet marketing people must you know these things need to be taught last one other micro issue macro issue to my mind is that the collaboration with the industry whether it is enterprises whether they are angel investors whether they are VCs must be lot more proactive from the institute side rather than the VC side or it may be equal because you know you should we should not sit and believe that VCs need us so they will come running to us no I think that we need them as much as they need us so it must be very important that you know they there is a very active collaboration and some of the things I thought of is that if you have continuous programs of updates on what is the right program projects to be involved in and so on and so forth so that it helps the entrepreneur align their enterprise with what the industry needs not what he thinks they should need industry should need you know because more often than not all entrepreneurs not applicable to people in the incubation is that they design a product without insufficient market validation because and they and it the product may even be good but we do not go and ask whether it is right for this time it may be ahead of its time or there are no customers for it etcetera etcetera so market validation and a very deep validation to the extent that you know I have now sold something or the other for past 40 years and one thing I know that an Indian customer never says no as long as he does not have to buy it at that time so if you go and ask somebody what do you think of the idea he say very good very good when come back to me when it is ready so they never say no while in US you will find people up front telling you I do not think this will work friend ok so that so you have to also learn to separate the wheat from the shaft is this real or you know you know it is to be I remember when I was involved with Hindutron and we used to sell digital computers we used to always get barraged by our counterparts in the US saying how come you are not selling as much as you should we get hundreds of inquiries for literature every month so I used to tell them please come and talk to these people or ask me for literature because they are putting it in the library they have no budget to buy so you know so I mean we have this appetite for learning and second is that we are not really very you know honest in our communication saying maybe this does not work so it does not work ok. The other thing is that I think incubators have to decide maybe what are in this what are in the business for are they in the business as a as a social goal or is it to create entrepreneurs and in a to that extent it is a commercial enterprise because we have found for example in many of the incubators that we have visited and talked to entrepreneurs that there are PhD students professors please excuse me if I offend anybody that perhaps they have good products you know something around Indian languages and all that and we get excited and then we never hear from them again why because and then I was asking the incubator head he says what to do you know they are very happy in that cocoon of theirs they do not want to necessarily face the reality of the market now you know now at that point perhaps there should be a program to say ok is there a way I can take that IP and sell it to somebody else or create a team around there so there must be instead of that idea sitting in some IIT Delhi lab it can be productive somewhere else so this you know and I think the incubator evaluate themselves as to what need are they meeting you know and if you have some PhD students sitting there for 4 years I think that you are perhaps denied some other potential entrepreneur space in that facility so there must be constant evaluation on some agreed criteria as to what they should be and how the churn within the incubator should take place because the rate success ratio is very small so unless you can churn and create a velocity you know you will be stuck with you know very poor percentage of successful entrepreneurs but so but that has to be a criteria for the incubator that yes we created 5 entrepreneurs out of 50 which got funding forget the success what is success is that they got funding that it was the idea in the team was good enough to get funding so I think that that discipline is important you know I mean I know that you know when a professor comes to sit there and do something nobody can say no but again I think that that should be determined by some set of criteria so that you know it is not somebody's personal baby to decide you should go out and not go out lastly I mean two more points I think one of the biggest issues in this country I think in terms of that why we have not been able to successfully create products you know where we call ourselves superpower or whatever power we call we do not create products here and why do we not create it is not that people in infosys or people anywhere else in IIT are dumb to create products but who will buy their products there is no market here and if I have to fund somebody to sell in the US that would not work either so there needs to be some again and perhaps IIT or incubators and there may be some collaborative thing that you can do is to open doors for these companies so that some beta testing or there are customers who will do beta tests because once a beta test is done somebody understands it is a good product somebody will buy but you know I have been asking NASCOM to say that okay ask 20 of your top companies to create a cell that will only do this that you know look at software products from somebody you know and either use it internally on a trial basis give it but you know again under their innovation scheme but you know it does not seem to happen because everybody is very busy doing what they are doing but I think that that is another thing that we have to somehow influence the system to do that create a mindset of early adaption I mean why do buy the Cisco, Nortel all these people get you know new ideas all not done inside is because they go out and try new ideas out of that you know maybe they will buy few and that will fail and some will succeed but you have to go do that provided there is a marketplace here because you cannot there is no way you can say I will develop a product here and sell it in the US market because you have no clue what the US market is all about okay and no amount of money will solve that problem. Frequent mentoring and seminars on industry segment and lastly I think that again and I think something that we have been talking about in sign is to establish a network of angels and VCs that I think the entrepreneurs will feel lot more safe if they had some kind of a semi guarantee or a virtual ability to believe that there is funding beyond this because you know in the end that is the motivation if you are going to do two years and then to do what they will go back and join some multinational you know the whole thing would have been wasted. So some some way that or the incubators or DST or whoever can create a fund which gets allocated but must be then given to companies that deserve that by an external investment committee but they must feel that there is some you know something beyond this horizon that I will get then they will be lot more motivated to do what they are doing and again from a policy point of view one thing that tie has been working on without any success is to suggest to the government that they must create some financial incentive for angels to invest because we sort of view this as because there is no angel money available today very honestly either people are very busy putting it in the stock market but now maybe they will put it somewhere else but so if you can sort of compare that investment in a not large sum of 250 lakhs or rupees as what you allow for under DST scheme as R and D where you get a 133 percent depreciation or something like that that will you know incentivize the angels to take some risks if not that I may at least get a right off here. That way you will create a community of angels that can sustain because that that ecosystem as it is very little money is available where we operate today where we are a 15 million dollar fund there is another fund of 10 million dollars I think there is room for 500 million dollars worth of early stage funding but you know there is no money one verse is also true that there are not enough plans I mean we must have seen a thousand plans and we have funded seven companies so whether it is a good ratio or bad ratio I do not know and some of them and I will just make one last point I think another thing that you must teach to people is about this business of valuation that you know valuation is irrelevant at the point of when you are starting if you will perform well you will get your value if you build a valuable company you will get a valuation but to say I am worth 5 crores or I am worth 20 crores and all that is to me a meaningless discussion. So you know with that at least I can tell you what we think from and there is I think ample opportunity the reason we only invest in Mumbai and Bangalore is because we believe that we have to be near our companies so we do not invest in Delhi. So you know there must be seed funds which are in geography so that they can because it is a lot of hand holding I can tell you that there is not phone calls and say ha aisa kar lo because there is nobody there who understand aisa karo mai ne kya karne kaya you have to make them make the connection so it is a it is a lot more beyond just academically teaching people Dubai what is the business plan and what is what the form of VC pitch should be is a lot of contextual work that needs to be done. Thank you. Couple of very important points that you made before I open the panel for questions would any member like to add briefly on whatever they are already stated or disagree. Mr Gandhi mentioned a lot of things that need to be taught and in that context I absolutely agree with every single thing that you have said you know and I can also see why you are still receiving you know teams plans which don't meet up to your expectation because it's a fairly new even teaching entrepreneurship is a fairly new thing that's happening here you know most of our 317 institutions are literally in year one of their you know initiation into entrepreneurship education our challenge right now is to teach all of these things to the faculty members so that they get then translated into programs on campuses but the one thing that we are seeing with some of our mature institutions Mr Gandhi is that you know the emphasis on these things is there what does the team mean you know even if you are putting a business plan in the context of a course in classroom you know you are not really expected to have a real team around you right but the emphasis on team and what kind of a team it would take for that particular business to succeed you know that mental exercise is done you know so that there is the understanding that there are complementary skills that are required that there would be different kinds of you know leadership dynamics within a certain team all of that is being taught you know either through these theoretical or through even some simulation kind of exercises and other things and also the emphasis on finance and of course you know we at any end put a great deal of emphasis on bringing an industry into every single one of these interactions and learning opportunities to the DST I think one very important point point by made from a policy perspective is that there truly is no financial incentive for angel funding you see if you take the second round funding a third round funding or market funding that funding comes at a time where there is a reasonable assurance already existing knowledge and valuation at that point in time is much more meaningful because all parameters are known and it is only proper that that falls under the existing policy framework of financing and so on but angel funding is almost like a R&D investment and that's a very good suggestion so perhaps if you could take this as a take back from the thing as a suggestion that angel funding up to a certain limit say 50 lakhs per company or whatever should be considered as an R&D investment although there would be of course shares and things like that but the things should be considered in terms of incentivizing the angel coming and I hope you heard him very loud and clear when he said that at that stage when you go to the angels valuation is meaningless I gave you an example of how we conducted the valuation of our first company when Rakesh Matur Nandan and I did it it was not done on the basis of any realistic estimate of how much will that product sell or something like that but rather how much does the team require to sustain themselves to build up a company and from that requirement as I said Rakesh Matur said look I think if I am doing I mean at that time the term used was not angel funding it was just funding says I think I should have a 20% stake because I've been mentoring them I'll continue to mentor them and they need about this much money therefore the valuation of this company in my mind is this much now this might appear very arbitrary but believe me at the angel round of funding there are no other parameters known so Praveen Bhai of course said it very explicitly that valuation at that stage is crap however it is not totally crap because when a funder like him sits to evaluate people at that time he has this uncanny ability to judge individuals ideas and so on from a long-term perspective that comes out of experience I don't even he can give you a logical algorithm also how he does it but that is what comes out of experience and that experience and that judgment is very valuable that is one point the second point he made is about the need for angels to be near the action angel funders are not you know saw cars who just give money and collect interest they are actually part and parcel of the risk that is being taken so when you think of building incubators in different places in your own geography as I said earlier you must find the local successful entrepreneurs who will either form some kind of a small angel fund there itself or will in turn tie up with the country wide funds such as this or whatever and we'll say that okay since you are in Delhi Praveen Bhai but I'm in Coimbatore or I'm in Jarsupada now if we can set up an understanding if I know what exactly you want me to do I can be part of your activity and I can mentor these people on a day-to-day basis and we could have a weekly conference call with some such thing could be could be possible but this connection has to be built by the organization which runs the incubator because individual incubating companies will be incapable of doing this and not only that we see the angels will not have any faith in any individual come the faith will at most be at best be there on the organization which right so that is one very good take of course marketing is too weak he has already mentioned and we shall be running a separate today program on the marketing mantra so thank you very much Praveen Bhai let's open this panel for questions now I am Prasad from Niti sir I want to point where I would like to mention sir this is with reference to the time basically sir may request you to I mean work towards creating entrepreneurship change in different colleges or journals or material related to the entrepreneurship people for example I mean we couldn't see many of the cases which are being circulated like I have seen NEN or other sources for example for HCL chairmen speaking I have attended one of the programs last time at Delhi if you can have a CD of that sort in the country probably can be wonderful mechanism through which entrepreneurship can be developed or educated I specifically request I that it should work to encourage entrepreneurs to create change in different colleges different institutions in the country which are really falling short of journals also same case the second point sir the academics and entrepreneurship are altogether different separated like in the country which we are practicing I mean there's a need to integrate like but probably I mean something has to be done by the highest level body where how these things can be integrated there it can be integrated there's no conflict between academics and entrepreneurship it can start from school to PG level there is no need to be crying at the PG level saying that you should become an entrepreneur after 25 years we are working somebody asking somebody saying that you should become an entrepreneur we should ask somebody to become an entrepreneur even at 10th standard 5th standard 6th standard so that kind of integration has to be brought in in the curriculum and the the teaching style itself that's one thing which we are doing at NITI which I insist on I got a specific these things are incubator cases for example if you would like to search for I don't think any incubator cases I get in the net or in Indian cases like madam was saying there are 45 incubator cases in India for example I have seen Trivendra Monson where there's a good incubator ICSA Park got an incubator award but probably we need to have cases like I mean otherwise how I can model myself saying that I should become one more sign I should become one more ICSA Park I request the DST to promote the cases so that we'll get a handful of cases we will understand what are the models they're working for that this is one thing I got a specific We are short initiating study and like wide range of documentation on the incubators as well as the successful companies as well as the failures of that one yes for example faculty development programs initiated by DST has got two weeks program 15 days program I understand I mean I I can't understand how a faculty can spend 15 days time for a this thing today we got T20 programs 20 hours cricket we are playing today and we got 15 days training program for entrepreneurship development I think actually after 15 days I think you will dissipate rather than really get inspired I submitted a program for two days program with DST I mean the EDI says that you are not eligible to get two days training program for faculty I really got surprised anyhow these are four comments which I made it I request thank you very much you said something about tie so let me answer that see I mean tie has an active EMP what we call entrepreneurship nurturing program what we do find that students don't join okay although we have you know significantly reduced fees for students so perhaps you know you can work with tie to maybe the college can fund it or we can reduce the cost further to make sure because we also have an organization to run so it's not that we are you know making profits out of this but and we can create a separate mentoring group that can work with your you know the entrepreneurship and that's offer offer open to all chapters in all cities that we have entrepreneurs who know more little more than what these kids do so we'll be happy to work with with these groups of people I think they are best suited to give you circulation on where there is success or because we don't have access to all that data so but I'm saying tie is more than happy to to work with you on a longer term basis but that again goes back to my earlier statement is that you need to identify the need and proactively reach out I mean we don't dream about this I must go and offer this to Niti your IIT you need us as much as we need you so please I'll just comment on the need for the cases that you mentioned and the initiative which DST is taking as mentioned by Dr. Anita Gupta on the not only just cases but the entire I'll tell you one problem which I have faced time and again on this documentation either there is very little documentation available or there is a plethora of documentation which has not been classified and summarized so what happens today technically I have access to each one of the 45 websites which will describe all the 45 things technically I have access to all the websites of men and everything that they do so either it is too much information from which I cannot call out exactly that small portion of information which I need for a specific purpose like setting away incubator all doing marketing all attracting and accessing VC funding now each one of these things have each one of these perhaps a time has come to exploit the flexibility of markup language on the internet and create three levels of documentation one is completely a summary sheet of all the internet links that are available but classified according to the needs so it is perfectly all right if the same link appears twice however if the entire link opens to give me a 20 page document whether I access it for marketing or whether I access it for VC funding is not good enough so each of these links should then be reorganized as multiple pages one page for a particular theme and I think the links should be organized on that summary page if I'm looking at VC funding then any one of these 45 sites I visit I don't get 20 page document from each but I go only to those paragraphs of those sections which relate to VC fund I would suggest that in the case you are collecting this documentation would be very glad to provide some kind of an organizer structure because this will probably be far more helpful in quickly pointy has a question this is again to dr. Gupta proven by mentioned about you know fiscal incentive about the angel investment now seven or eight years of experience at sign we have also observed a very little participation from the industry not only for you know taking the product as a market validation but also you know in terms of their participation and investing in startup company which has a large resources to you know actually invest in the company so just like fiscal incentive you know for angel investor perhaps some kind of fiscal incentive you know risk capital by per se at a very early stage can be treated on par with Harendi and if I'm not mistaken this was also this both the proposals were part of the planning commissions you know report that you indicated yeah so I think something on that if you are taking the first comment with you then this is another comment they are the same actors same people exactly they are the same people who prepared that report exactly same point is that we have been shouting from the roof top for last three years in that nobody is even blinking so you know maybe if it goes under DSP and under you know because we don't understand how you know how to make something working I think you know DSP did a fairly good job to get some kind of fiscal incentive for incubators yeah yeah yeah right so by the way proven by incubators as well as incubating companies working within the incubator do not now have to pay service tax for it it is also yes very small thing correct I have known for a long time but Nalini is more involved in SME segmentation yes okay and hence he's the old old old industry so you know for him this VAT and service tax and perhaps are more important than you know getting an angel funding maybe we could as a as a consequence to this workshop Dr. Muktaathri could you note this point what we should do is we should write a formal later consolidating all the points that have emerged and explicitly suggest to DST that in order to encourage angel funding where essentially they are taking a huge R&D risk like any other R&D perhaps the department might be kind enough to moot a proposal to treat investment up to a certain point as an R&D investment or expenditure rather than anything else yes that's an excellent idea one of the comments somebody made in the government was it shouldn't be that a father gives his son 50 lakh rupees and take yeah you know we are very creative there also in fact this is very interesting and this shows another mindset and as he said we are very creative so in the country such things do happen but unfortunately if two percent of these things happen 98 percent of the normal people but because this problem the government has to ensure that the larger good happens and that the provisions are not used by individuals for sort of self-sustaining and that is the object but if we apply these rules specifically to those situations where companies have been evaluated independently admitted to an incubator and then this angel funding is going same conditions that you put probably it would make sense any other questions I was wondering if you had sort of a specific due diligence kind of checklist that you go through with companies that you're evaluating of very sort of precisely the kinds of things you're hoping they've taken care of by the time they come to you well no I mean you know very honestly you know at the level we are investing there is nothing to do due diligence on because it's two people and a plan so I don't know what I can do due diligence on so we do of course do reference checks on the individuals who are asking if the company is a little more mature we go through but again they are never in any significant revenue mode so that you know there is balance sheet or P&L has any meaning so I would say maybe there is some 10% worth of due diligence in terms of reference checks and all that otherwise as Dr. Fartuck said that it is essentially a gut feel in the interaction with the entrepreneur saying maybe does he understand what he is or she is doing and that's very important that it's not I cannot do any DCF calculation on some spreadsheet because nobody knows so and it is likely that the business plan will change within the first year so you know all that is irrelevant so you basically bet on the team and we are very big on team being the bigger criteria than the idea Excellent point he made sorry this is one more question I'll comment on this later Manohar from Manipal My question is when I have gone through this series of lectures lot of information I gathered today professor Amarnath said there is a TEP funding if you look at DSP there is a fund for setting up the incubator if you look at basic fund report for anything venture capitalists are there angel funding is there everything is there in spite of this why things are not happening probably my understanding goes it is not being percolated down to every nook and corner of the country I think there is a lot of such initiatives are required if I look at DST and incubators where they are located mostly for the sake of some risk hours from DST are kind of organization they are found in most of the government organizations that is the first point I would like to point out and when you ask some regions if you look at the entrepreneurship capabilities they are quite strong in that but when it comes to government support is concerned I don't see anything whether it is the ignorance of the people or whether it is a government mechanism which has not initiated this type of entrepreneurship awareness in those reasons it is not very clear to me I think you can comment on that please use the microphone in fact South private players are very proactive in fact I must say VIT yeah VIT, Kongu and as a country they are all proactive in getting our support as a country as far as DST concerned we need not make any distinction between the private and the public as long as the proposal is sound enough we are ready to support to in fact I will add to that in more than one respect this is a perception coming from the old days that the departments will typically fund only the government distributions there is no more correct not only in this case but any other correct but the fundamental distinguishing and defining feature is the quality of proposal made and the commitment seen within the proposing institute to that way if it is seen to be made the proposal is seen to be made just to grab some money which unfortunately is the case several times and that is not necessarily only from private institutions even from government institutions the departments are now clever enough to figure that out and refuse such a support in either case am I right Dr. Shosh? that is most important very very important there are few places yes even the committee members have made a comment that proposal is strong but you are a private institute we are not in a position to see no that is that is there they might be stating so on the face of it but that is not the correct statement only one comment which I would like to make regarding private institutes we would definitely seek more commitment and more contribution the sort of a matching in most of the cases just to have their more commitment on the proposal that is the only thing because private institutions cannot give that much of funding so that is the only and we purely go by the merit of the proposal let me also comment on the scale that you mentioned what you say is not true even if the information is available take the case of angel funding you would have heard what Praveen Bhai said they would have examined something like 1000 proposals they found only 7 worthy of support so please understand that the quality of proposals which are coming for funding are probably very atrociously listed without any understanding of what a funder will look at probably the sense of commitment that he sees he clearly stated and that is exactly what we also learnt earlier when Kamal used to mentor us as the startup incubator incubator itself as a startup so he gave us couple of hints always look into the eyes of the people try to judge the fire in their belly at the initial stage we are even before angel funding we don't even know what will happen but as we progress further is there a commitment is there a commitment to sustain the good and bad times now that judgment the incubators have to make and such well-judged people only should come just as quality of proposals from the proposals of incubator is not adequate many times similarly proposals for funding from the incubating company is also atrocious I don't know whether I shared with you or not but as a part of the tie activity many years ago I have created an event where the startups were supposed to give their pitch in 90 seconds one and a half minutes and we had lot of type of charter members supporters, sponsors and VCs accumulated and many startups asked me this question how can we tell everything that we want to say of importance in 90 seconds flag and I told him what Kamal had told me which is if you cannot convey your major pitch to me in 90 seconds and get me attracted I will not be willing to spend 9 minutes with you and if in those 9 minutes if I give you if you are not able to convince me then I am not going to spend 9 hours with you so the pitch has to be made at different levels and you have to convince people and that's the reason why when I said you know levels of documentation I think there has to be a 2 minute pitch a 20 minute pitch and a 20 hour pitch and the appropriate pitch must be made at appropriate time this applies to proposals this applies to evaluation in fact this applies to life in general I would think yeah please please our experience also indicates that most of the institution about 70% approaches for funding of TBI only to strengthen their equipment base that is their sole interest okay so until and unless they are conceptually clear about the incubation what all goes into it it's very difficult to get it going and have success in the incubator program so I will request for a fact if this program can be at least organized twice in a year we will be ready to support you target about 30 at least 30 institutions in one program so if we devote time to educate institutions about the conceptual framework of incubation and entrepreneurship I think we will then be able to get very good proposals and the effectiveness of the incubation program will also be enhanced can I ask a question to you is there a periodic audit on some criteria on what these incubators do because otherwise there is a real estate being wasted actually the audit is not very formal but like we have a national level committee which reviews the performance on a set criteria based on the number of enterprises promoted the incubation process and systems are in place but we need to have a deeper analysis of the I think so I mean I think in terms of the incubating feedback external industry feedback because I think in the end you are doing this to service somebody external to the system not the internal faculty or other people so there must be some participation from the external world to you know in that audit process in fact we are having impact analysis of the whole program but I would like to invite you if you can contribute to be a part of that committee I am saying I would be happy to be part of any committee but in the end I have been in so many committees and especially I was very passionate because we actually funded this tie and Stanford program to you know we spent a lot of money to create that whole set of recommendation to the finance ministry what needs to be done for the whole entrepreneurship space we have spoken to Montaig but proven by a few things have happened and more will happen give us some time after all we I am not a very patient person that's the problem but if you look at India you know the Indian philosophy what is time it is infinite you know but anyway I would just like to mention a couple of points here because this audit what he says is extremely mercy as a control system engineer we have some very fundamental sort of mindset what we talk about observability and controllability if something cannot be observed you cannot make measurements if something cannot be measured it cannot be controlled and if something cannot be controlled you cannot optimize now if our ambition is to optimize the whole set of incubators then the auditing in terms of measurement in terms of understanding and to be invoked formally would be a very good idea I think what he mentioned I would just touch upon one point which is completely different sort of parallel the revenue model that you had mentioned about the incubator and you had suggested that the following should be the revenues for day to day running and so on and you had mentioned about the you know rental and such services I mean money for such services from day one I had shared this with the audience here but I will repeat this when I started the pilot incubator here I had exactly the same model in mind that model required the startup companies to invest some money to begin with from day one at that time such investment or angel of funding is not available and we estimated about 5 to 6 lakh rupees per year company will have to spend in those days the heydays of internet we used to get large number of applications everybody wants to incubate but one fellow said my father wants to meet you and the father came and he said what if they will fail this brings me to his question the incubators must work along with other entrepreneurship spreading agencies in your region to remove this stigma of failure in this society's mind very important so this father said what if this fellow fails and I told him look these are IIT Bombay B-tex they will always get a job so what's your problem but he says suppose after one year when my son has a loan of 2 lakh rupees on his head and he takes up a job who will marry him so this stigma of failure so I actually called Kamal and Nandan and said I have a marriage problem and he did not understand when I told him that people are not willing to take the risk because of this failure so if you want to make them pay in the first year under any guys believe me the experiment will not succeed then Nandan said alright part of my donation you divert for this and use this to give free services to people that is when we conceived of a stock holding model where we said we will hold 3% 5% 6% to this date that continue however that does not give any cash flow to the incubator the cash flow will come only when we discharge in the first round of funding let's say one third of our holding and so on and the amount may differ drastically and the amount may not come in the first two or even three years of the incubator I would strongly suggest that your funding probably should have a strong relook at the assumptions made on the viability of the incubators and should ensure that no matter what for the first three years the running expenditure for the incubator including the people services etc etc is provided for through the funding fully made for the first three years of course during the first three years they are expected to start generating through the discharge of these things and they will accumulate those funds so that they can be self-sustained in general the world over very few incubators are self-sustaining all of them depend on some kind of support or something most of it comes from the government but my worry is that if we don't take care of this then every incubator that you find you may end up doing what I call 50 will die eventually whereas even if you choose say 20 of those and so for three years we underwrite your expenditure meanwhile however these are the parameters of judgment so we are not asking you for money or something but tell us how many relationships you have built with the VCs tell us how many local successful entrepreneurs have come and mentored your people tell us what you have done to educate the coming companies monitoring them these are the parameters on which you will be judged so annually I will release you a grant for next year provided you have done all of do you agree with this very much yes so give them a three year support and I think that will help a lot I don't know whether the audience agrees with this suggestion I think it's a very important point and I think as a matter while we are teaching people about business models and all that I may recommend that the incubators themselves must create a business model its own which will tell you that if I can only exit after three years five years this is the amount of money I will need so how much and to improve my success ratio how many companies must come through the through the incubation process so that I can make some money in that discharge of three percent which can create a self funding so it has to be also looked at as a business I mean yes government is there it will fund but I would like to believe that the incubators must proceed on the basis that they can become self-sufficient at a point in time whatever else you give them can go towards so I mean before we teach everybody about how to run business plans I think we should make one ourselves yes yes in fact the model sustainability model also is a function of the location of the incubator that is true we can't have the same set of performance parameters for incubator located in Bombay Reservist which is located in Magalport in a that's correct the point again being that some things are going to require ten years I mean it's a business I fund if I say that this before it becomes a successful it's going to need four years worth of funding so be it I know that there are some which says that within 24 see one of the things we do very clearly in our investment is that one criteria is that within 18 to 24 months the company must be break even or profitable I mean that's the many people argue with us that you know that excess thrust on profitability may be taking away from market share we argue that you know in the end money is the most important revenue most important criteria market share will come if you are successful market share will automatically come can I just again before the end I want again just emphasize that I think some of the point that you didn't which I think is having been in partnerships all my life this business about counseling through the incubation an HR function is a very very important please if you want the teams to sustain through the incubation and later to keep the team intact is I think a very important thing because most of us fund teams not necessarily the idea idea is there but it is the team that gets funded if the idea doesn't work the team is good enough to come up with another idea but their being together over time is extremely important so please don't thank you very much for illustrating this point again again I don't remember whether I shared this experience or not but in our early days of mentoring when a team got funding from Sidbhi I think and there was a breakup between the two partners they were trying to do marketing in the US but the breakup was so strong that both of them were pursuing their independent things and Sidbhi was terribly worried as to what would happen to their investment so I had actually gone to US and without telling them that I am sort of trying to do a consolation I called both of them at the same time in my hotel room they were very surprised to see each other they were not willing to even talk to each other I met them talk to each other unfortunately they are gone beyond the back point all that I could resurrect was the breakup was proper and legal so that there were less hassles for the company which stays back but I realized that had I spent more time with them had I anticipated that there are some problems as a teacher I could have mentored them perhaps earlier avoiding this retaining the team is very important and about ideas as he said this is something which many of us don't understand when a technology startup happens with some idea all of us appear to insist in our mind that it is the same idea which must be taken to the market more than 50% of the time that will not happen because the idea might be good the market would have changed so this is the Kamal Mantra which I learnt and I always remember do not fall in love with your own idea unless the market falls in love with your idea the idea is useless however great it may be so you should be willing to change not only slightly modify your idea but willing to change completely and if you have to change completely what matters then is the team which has understood how to build a business which has understood what a customer is which has understood what a cash flow is and which has understood how to get the new team new technology and go ahead and build a successful business where technology is important it is only its correct so I think on that note we will conclude thank you Praveen Bhai thank you Prasaraman Nath thank you Dr. Hanita Gupta and thank you Sunita