 Today, because Professor Lagu could not be with us, I am going to be showing you an interview that I did with Professor Lagu. Professor Lagu is an extremely important so as to say actor in the entire drama of business incubation in IIT. He plays a very important role and since he is an extremely busy person as well. He is the head of the applications group in computational research laboratories in Pune and he is a part of the 75 member group who made the fastest supercomputer in Asia recently, the fourth fastest in the world. So, he could not really make it and as you must have guessed, he is an extremely multifaceted personality. He has been teaching electrical engineering here as well as he taught in the school of management and he has also been advising the business incubator group here. So, before I start, I just want to get your attention to a certain important aspect which I think came up in yesterday's discussion for a just a few minutes. The fact that this incubator is situated in an academic institute to me as a researcher, I think it made a very important, it was an important aspect because since I was not from a typical technical background, I decide I looked at it more from a people's point of view and I think it does make a difference where your incubator is situated and in this interview, I mean the interview is more than an hour long, but I have sort of cut it up into different sections and at various places, you see that the policies, the structures, the models, all those that were made with were made specifically because it was an academic institute and also because it was students that they were dealing with, it was faculty that they were dealing with. I think somewhere or the other that particular thing matters. So, I would like you to focus on that as well and we will continue with Professor Lagu's interview. I have already introduced Professor Lagu to you, but he would like to introduce himself in his own words. Actually, I am a student of IIT Bombay and I have been associated with this institute in multiple capacities. Firstly, I am an undergraduate student where I did BTEC in electrical engineering, finished in 1978. Then, as a postgraduate student, I also did EMTEC in electrical engineering, finished in 1981. Then, I went to US, got my PhD from University of Florida and came back and joined IIT Bombay in the electrical engineering department, worked for about four years from 86 to 90. Then, in 90, I went to industry. Initially, I took jobs in other companies. Then, I set up my own company and in 1990, I came back to IIT Bombay to teach in the School of Management and also to get initiated with this incubator. I think I have a very multiple roles that I have played in this institute as a student, as an engineering faculty member, and then as a management faculty member. I think this whole institute has created me. My whole career and character was molded in this institute from the beginning of the incubator. That time, it was simply a division of Cresit, if I remember. It was not even an incubator by itself. I think Mr. Nandan Nilekhani and Kanwal had set aside certain amount of money out of the Cresit budget to actually start an incubator. If I remember, it was a mandate for Cresit that not only it should run a postgraduate program, but it should have a distance education and it should have an incubator as a part of that activity. I sort of took it in that spirit that it is something that has not been tried in India at a large scale. We have two choices when you sort of face such a situation. One thing is you import models from other countries or other places where incubators have sort of been successful. So, you know, Stanford runs a virtual incubator. Stanford does not run a physical incubator, but there are many other sort of universities in USA. Texas, Austin runs a very successful incubator. And what we thought was, shall we simply sort of ape them? Shall we look at all the processes and procedures that they follow and try to plant them into our kind of a setting and sort of it did not make any sense. Because, you know, the settings are very different. The kind of grooming that students get in different places are very different. Social and cultural sort of upbringing of American students is very different from the way Indian students are brought up. Also, incubator is not only supposed to incubate student companies, but also faculty companies. And till that point of time, the ethos of faculty member actually starting a company was not there at all. So, it was a sort of issue of concept selling more than sort of, you know, setting up the infrastructure. And I came to a conclusion that firstly, we should not import anything from anywhere. Secondly, simply we should give time. You know, these are sort of concept selling, culture changing sort of issues that we are tackling. And that's why it's not going to happen in six months. It's not going to happen in one year. We should give it a time. I mean, it's like a Fabian socialism. You know, the social processes take a long time, except that your final thing must be clear in your mind. So, it became very clear that though it is a division of crested to begin with, eventually it must emerge as a legal entity by itself. We did not know at that point of time whether it will be a registered society or a section 25 is called no profit, no loss kind of a company or a trust. That is something that we would have investigated at a later point of time. But the vision and the ambition was there with me and Professor Fateh right from the beginning that eventually it must emerge as shown institution is sort of crested saying that, you know, we will incubate the incubator for a while and then we'll leave it on itself. So actually crested sort of incubated the incubator. But of course, we are part of the boom. So we did not realize that the bust is going to come. But at least for the first three or four companies that got incubated, they got very quick funding and a decent size funding basically. So it's very important for any sort of new activity that initial successes are very important because they said the tone and they said the pace and the concept selling much becomes much easier if you have, you know, some initial sort of quick successes. Moment you go to an infrastructure which is of decent size, you have to start inviting outside people and start talking about it because you can go into go from a private phase into a little public phase. And for that to happen, you have to have a presentable infrastructure. After all, people with serious, you know, people, people from you know, industry background or people from venture capital background, if they come to your premises, they have sort of factored that in that I'm going to an academic campus. And that is why the conferencing facilities and everything will not be up to the mark. They have what's called given you a handicap before they even come in. But they used to be pleasantly surprised by the time they would come to Crescent. I mean, yeah, I mean, it was such a nice place and I could see that pleasant shock on their face that probably they would have gone to other colleges and other institutes and they would have seen dingy corridors and non-working LCD projectors or something like that. And they would come here and I would receive them and the projector would be set up by the time they come. Then the presentation starts by the coming and Vijay brings tea before you on anybody asks basically. This is something that, you know, does not happen in other departments actually. So this is, you know, I mean, it looks like a curtsy, but it brings an element of a very professionally run sort of an institution. And again, Professor Fatuk is greatly responsible for sort of building this professional atmosphere in Crescent. And I think incubator has benefited a lot out of sort of operating out of that ecosystem. You know, had we operated out of some other department in the institute, you would face this problem having to shout to people to get water and get tea and why is the LCD projector not working? And, you know, the visitors will discount, as I said, but the idea is not to let them discount, but idea to give them pleasant shocks. The government started taking note of this activity. And DST and other institutions sort of on their own started saying that we want to fund this in a bigger way, not only with you, but with a lot of other institutions in the country. But why don't you take the lead? Because, you know, when we come to you, we see that element of professionalism, the way we are received and the way the communication is sort of followed up. And if you ask for some kind of a report or a PPT without fail, the next day by the time we reach Delhi in our mailbox, that kind of PPT is there. You know, all these are small things, but they influence people and they increase the comfort level in somebody that if I am giving a couple of crores of rupees to this institution and the people who run that sub part of that institution, the money is in good hands. I think that is important. It is important for them to give that confidence. And I think our management and professor Fatah's management of this whole building and and the department that all contributed to this creating an image of a very well run, professionally managed company is not good to use department. I mean, it's such a hybrid thing. I don't know what to call it a department or a company or any institution is to sort of lofty over to use at this point. But it was some mixture of that because it definitely had an independent existence. I would like to I would like you to recall some very specific aspects about one thing that had troubled us in the early days. Again, for the benefit of audience, when I set up this incubator, I had some very vague idea of kind of stake that the incubator will have in the companies. Originally, we tried with the idea of charging them per month, something and we're to throw that idea out of the wind because people had no money to pay and they could not borrow. So we said we'll hold some stake. And my lofty dream at that time is that if IIT Bombay could create a company like Infosys for the next 20 years, and if I were to hold, let's say 3% of the stock or even 1% of the stock, then IIT Bombay would not need any research funding from government. And it was in that vague notion that we said at that point, however, IIT Bombay was not permitted to invest in any stocks because that is called speculative instrument as per government rules, we could only invest in fixed deposits and fixed return schemes. So there's no question of actually having stocks of a company in the name of IIT. And I was struggling to figure out how should we go ahead. And there was on the other hand, if I hold stock permanently, I still have no revenue model. Although initially the revenues were funded by Nandan Nilekani and Kavals infrastructure. But we were in sort of a dilemma at that stage. And that is when Professor Lagu came up with a very remarkable scheme, which I'm very proud to still following even today for sign. So Professor Lagu, can you initiate this and the other procedural aspects which you rightly pointed out must be inserted and put in place so that there will be a normal flow of activities, as you rightly said, independent of people, but institutionalizing the procedures and institutionalizing the way we work. This was a very, very major contribution by Professor Lagu. When the companies get incubated in IIT Bombay, they have to pay something back in return. Nothing should be free. Nothing should be terribly subsidized either. So as Professor Fatak was saying that you have all kinds of models. So you have a rental model. So where companies that come in are asked to pay some kind of a monthly rent or rent is a very just wrong term to use. So we'll call it something service charges or something like that, because rent is so much associated with just physical place. So where one can talk about per square foot per month or something like that, but there are a whole lot of additional services that so many of incubator managers give to the companies and there has to be some monetization of those services. So we'll call it service charge. But as Professor Fatak said that especially when it comes to young entrepreneurs, they are very strong on ideas. They're very strong on enthusiasm, but they're very poor on money. And that's why a pure rental model is not going to work. And that has to that's why it has to an equity based model that was very clear. It can be a mixture of equity based model or a service based model. So we were toying with various of these ideas. The moment you go to an equity based model, the trouble with equity based models is that the equity is all intangible in the early phase of any venture, right? It's only in a listed company. I will know that the 10 value 10 rupee face value share of some XYZ company today gets sold in the market for 3000 rupees or whatever that kind of a thing. So you know, the market value of a company, okay, comes very clear to anybody who is assessing that company only after it gets sort of listed on to a stock exchange. Maybe a little bit before that, there are some norms. For example, people talk about price to price to earning ratios or price to revenue or price to sales ratios. Today, the prevalent rates in the market for IT companies are let's say, price to sales is four or five or something like that number is debatable. But let's take some number of price to sales is four. Then if a company has a revenue of four crores, then the company's value is 16 crores. I can apply some kind of a simple formula to figure out what the company's value is. And then if I end up taking say 5% of that company or 10% of that company, what is the worth that I'm getting for all that I'm providing is known when company has stable revenues. And we came to two conclusions. One thing is that just like we cannot give anything free to an entrepreneur, we should not fleece him either. Entrepreneur frankly at that point is very gullible, actually, because he is excited to do things. He has nothing in his hand. And actually, since we were their teachers, myself and the father would have squeezed any amount of money out of sales out of those people. You can imagine the young four guys come to us, you give 25% equity to the incubator. They would have said yes, for a variety of reasons saying that these two guys are saying they know what it is or something like. We realize that it defeats the purpose in the long run. Because not only the entrepreneurs sort of give us an unfair share of their ownership, it is the VCs who will find it extremely unattractive to fund that company at a later point of. They'll say G, the owners are keeping certain equity with them. If the incubator itself end up taking another 15-20%, what is in it for me? So, you know, the incubator could have been greedy initially and hurt the prospects of raising venture money for the incubators later. So, we were sort of reasonable at that point of time. And suddenly, this 3-7% formula came into picture. There were little variations of that formula in the sense that if the intellectual property is taken from IIT Bombay and brought into the incubator, then there's some slightly different number. If somebody just comes and starts developing something from scratch or brings IP from outside and uses only the real estate and the services of the incubator managers, then there's some other number. But all these numbers hovered around some very small, less than 10% kind of a thing. That's a decision that we took very early. And the feeling was make these companies big and increase their valuation and make a lot of money out of that one or two percent that you hold instead of fleecing these companies and restricting their growth and then crying that, you know, this 30% means nothing to me now. So, that was a very bold decision at that point of time. And this whole thing of sort of shifting from proceeding to sign came logically out of that decision. Moment you build an equity-based incubator, it doesn't matter whether you operate out of a department or out of your own building. That is just, you know, the procedural matter. That is just the, by the way matter. The real matter is what is your legal structure. It cannot be a division of Crescent, which itself is a part of the Institute. And since Institute cannot hold instruments in sort of speculative instrument, this incubator cannot hold equity. In fact, we can share some of early incubators. It was sort of a gentleman's agreement. So, would you like to share the famous model which has now become a standard of that one third, one third, one third kind of thing that you had initiated once. Right. So, we were thinking that, so here is a company and who are the stakeholders in that company. So, obviously, the promoters who start the company, you know, they are risking everything. And the investors who are bringing the money. And employees are also there. And some of the early employees also risk the career as much as the promoters. Though not as much as the promoters because they don't get the ideas. So, we have to have some kind of a broad guideline as to what is the equity holding or what is the share holding pattern of this. So, we used to give this broad guidelines that, you know, 33, 33 is a good number to begin with. There can be variations. For example, if a particular company is much more capital intensive and less idea intensive, then the VC may end up holding a larger percent of the share. And this also this kind of guideline helps entrepreneurs to actually be realistic about what they must expect. The other plan is, say typically, let's say we hold 3% of the equity of a company. I'm just taking a number. It can be 6%, whatever, 7% or whatever. Just to sort of give ratios, it's good to start with 3%. From an incubator management perspective, we always have this dilemma that the company's value is increasing day by day, hopefully, if the company is doing very well. And that's why we should try to cash out as late as possible. Because if the value increases really fast, it is good to sort of, you know, hold. It's like to give an equivalent example. If I hold the shares of a company whose stock price is going up day by day, it makes no sense to sell it in the market. So, it's like if the stock is going up, the idea is to hold. But then, you know, a catastrophic can happen or suddenly a company could go bust or suddenly there could be a fight between the to talk to promoters and something could happen. So, the incubator has to guard itself against those sort of eventualities. Also, incubator itself is a self-sustained financial entity, right? Since ours is an equity-based model and we have some amount of things for, you know, our operating expenses, we need some cash flows for the incubator itself. So, after a lot of sort of careful thinking and discussion with a lot of people, we came out with this one-third, one-third, one-third model. In the sense that to begin with, we hold three percent of equity in the company. At the first round of funding, we unload our one percent at the valuation that the VC has decided. That brings an element of fairness with us, because we will not force any value on to the company. If an entrepreneur is willing to take certain funding from the VC at a particular value, we will honor that. Okay? Of course, we have that, you know, it's like a, it's like a, it's like a put option to use the derivative terminology. It's our right to sell okay, but it's not an obligation to sell. So, in case, on a case-by-case basis, we may choose to not unload that one percent, okay, and keep it. So, that is our choice. But we, as a part of our contract, when we incubate people, when we incubate companies, at the first round of funding, we can unload our one percent. At the second round of funding, we can unload our second one percent. That will, of course, happen at a much higher valuation, hopefully, because now they are part of the incubator and, you know, they are, they are, well, they have received first level of funding. They have used all these sort of their own skills and all the support that incubator has given. So, the valuation should go up. So, our second one percent will features a much larger number. And the third one percent, again, we can either leave it till the IPO, or after three years company is leaving and finding its own office somewhere in the town. That is again our prerogative. So, in terms of derivative, as I say, it's a put option. You know, it's right to, right, but not obligation to sell. So, so, we, the whole, this three percent equity was structured as a put option. And it seems to have worked very well. Okay? Now, at a broad level, we started something like this, but then, as you know, you put rules, then entrepreneurs will try to tweak the rules to their benefit. So, again, we have, we said that the first round of funding has to have a particular quantum. As you can imagine that, some, some devious person, what it can do is show a very small round of funding, call it first round of funding and unload, let, let sign or the incubator, you know, sell out its one percent. That's why the put option comes into the picture. If you see something that is not happening at the right valuation, we'll simply hang on to that, that one percent. Came up with this very unique equity model. I now request, pointing back to speak a little more on the equity model and answer any questions that you would have about this. You may be having your customers, which are not at all associated with hiatus. Still, you follow the same model. So, customer in what sense? Our incubator company. So, our eligibility criteria is only our own community. So, we don't have outside people. Though, outside people come in the incubator by teaming up with one of our community member. So, community is basically IIT Bombay alumni, faculty, alumni or faculty graduating student or it could be our own employee who is not really faculty into teaching but maybe at lab level or research level. Right? But having said this, equity model is consistent. There are some floor as well as kept defined for equity model and within that we vary our model. Couple of things before we get into any I would like to you know elaborate on what Professor Lagoon mentioned. So, actually we started off with a pure equity, very like with the model. In the process we realize that you know equity takes really long to liquidate and we have our own operation after sign was set up. You know we have our own operation to be sustained by our own revenue stream. So, how to like first investment after sign was formed, first investment in sign company, not the companies that translated from Cricut, you know came after almost two years. Now, two years what do we do? So, we said that two to three years and these are free to make your company. Right? So, in some case it would happen even after four years after they move out of the incubator. So, what do we do? Because there is no consistency. So, we decided that okay, like you know let us break pure equity model into equity come revenue sharing. So, nowadays we also take small portion of revenue. So, companies may not even you know attract investment but the date they start revenue at least some portion comes to us and that's how we recover our cost. So, that is one thing. Second thing what we learn was that you know he briefly mentioned about you know this equity model. So, ours is like I told you, floor and cap is decided. So, whenever a company is set up and come to the incubator, we take three to eight percent depending on you know IP involvement and whatever from IT Bombay is there. So, and then minimum capital criteria for a company is hundred thousand rupees, yeah, Indian rupees. Now, if you take three percent of hundred thousand rupees is like you know thirty thousand you know what to begin with. So, three thousand share or three hundred share for us and then promoter will put in additional capital and in the process we get diluted. So, we said that until you know so we learn from our own own experience that they get commercial investment our three percent needs to be maintained. So, no one can play around with incubator you know finances. That is one thing, second thing that we learn and third thing we actually define the investment criteria because it also happened that they faced out their investment process. In first investment they really took lower valuation, lower money and one third basically we got very small amount. So, we actually define what is investment. Investment has to be minimum five times more than your best capital as well as your you know free reserves. So, this is what we actually you know evolve the model from right from vanilla you know equity to equity and revenue to definition of investment and as well as you know how do we take a call on this investment. Yeah, you had some question. I was wondering if if you had any insight into how the VCs have responded to some of the conditions that you put in like being up to sell one percent and the revenue share. Sure, so actually I was about to address this tomorrow but anyway again. So, like you know there were apprehensions when you say suddenly you know 8% equity is being held by the incubator. It's a large number especially when we see the dynamics of the US investment or US profiles, startup profiles. But if I look at absolute number it is a very small number that's one thing. Second thing is that you know we charge revenue at a very early stage. Yeah, where the revenue is not really big and plus revenue is only for limited period that is for three years. So, if company doesn't make revenue for three years then we don't extend the cycle unless you know we feel that we really are losing out and then we negotiate but you know if company misses out we also miss out. That is one thing. There was a prehension from some we see about the number of the equity but like you know the kind of cost structure that we have vis-a-vis our company we come at a very very early stage and we are playing a role of almost like a risk capital. You know in that process they don't mind giving us an exit. Yeah, but sometimes they do negotiate with us and we get into the negotiation. If we realize that we don't lose out. How is this valuation down is it book value or market value take? So we don't value a company. I told you we have a flat formula three to five. For all companies. In fact by taking... The respective of the size of the investment? No, so we don't do investment cash investment. No, no, I'm asking about the the company whether it is small or big everybody the percentage remains the same. Remains same. Remains same because it becomes very difficult to value and then bring in lots of you know discretion and decision-making from the you know incubator to be imposed on the company. We didn't want to do especially when we are in academic institute. Yeah, that's it. We basically you know follow the flat structure. Yeah, so in a sense what happens by taking up equity in the company when we monetize our subsidies you know support to the company that is investment in the company you know will generate a valuation for a company. That's one aspect. Second thing is that you know it's something similar to VC model like you know out of ten companies you know two or three will really give us a good good money back. Rest of them will not give money. So good money three percent itself is a good amount. Smaller company in any case you take half the company you don't get that much amount. So we don't get into those aspects at all valuation that is being done by VC in the process we crystallize on our own valuation. My concern is that when the incubator starts in an incubator he may take some one to two years to I mean set himself in the incubator and during that time there is no question of revenue. I mean the chances of revenue generation during that time is very very low. So this revenue sharing model may not have significance during those time. What I felt is probably after two years or after three years if revenue sharing is there then it has some sort of meaning according to me. Yeah so you as an incubator you can always define your slab of two years or three years when it will begin from. Right for us we decide so we also take a call on company to company basis. The idea is to recover through revenue as much as possible while they are in the incubator because after that you don't have much control over them. If they don't pay you you are not going to really fight with them because ultimately they are your own products. Yeah so that is one thing and then there are moral obligation they fulfill that's not the issue. But second thing is that when they really become very big and you take larger chunk I think it would be more painful for them. Yeah when they are beginning you can sensitize them that you know actually we are doing the same thing with our company initially many times we get an argument that we are just trying to generate revenue and then you know you are taking some share out of it. Share is not really big very it sometimes runs into thousand rupees it's not even ten thousandth kind of thing. But having said this the idea to sensitize in that is that that you know our revenue is also a cost to you. So you budget that cost in your pricing. Yes you need to be smarter at pricing level not cutting the cost level. Yeah by restricting incubator to IIT only is it not wrong on the part of IIT because once you say incubator it should be extended to people who are really interested. There could be one reason from your end saying that we get sufficient incubate from the institute itself which is just sufficient to meet the requirement of I mean the existing facility sufficient to meet the requirement of insiders. Can you comment on this? Yeah actually we always you know keep coming across this question right from government to the company you know potential entrepreneur level. There are several reasons I wouldn't say what is wrong or what is right but since we have been you know hosted by IIT Bombay and this is the mandate given to us. From IIT Bombay that you focus on you know IIT Bombay community because there is a enough critical mass to be you know exploited from the community that is one aspect. Second aspect is that so that is of course the like what you said it is one of the reasons yeah that we not that we are getting companies why do we go out but there is enough mass to be exploited and try to capture those people first and create impact you know from within the community that is one aspect. Second aspect is that you know our admission process is also certain subject to certain review process so it also helps us you know to do diligence when they are from within the community that is and third thing is that right now we have very limited infrastructure we can support only 15 16 company at a time and when we really you know spread it across the the population then and then our own community is left out then you know institute will also have issue on this and that's the reason we are limiting we are not telling that this would be a perpetual thing but yes for the next five years it is going to be our focus after that we may you know spread out to other community also. But what I would suggest if possible you can really illustrate all this equity sharing etc by a case study. Then the whole process becomes very clear and how do you analyze and how do you promote and how they go on their own. So you want us to give some example? Yeah examples case study of a particular company I mean if you don't want to reveal its identity it's okay. Okay. But if the process becomes a little more clear. Okay no so there was one particular company that company basically had initial capital of you know one lakh then they they I'm not naming the company. The company actually you know in my actually attracted angel plus risk investment of two crores and in the process you know I'm not getting into numbers and quick quick overview and per per equity valuation was somewhere around three thousand shares and that was the first round of investment. Now if you take one lakh capital you know same would have got three hundred shares because ten thousand share three percent is three hundred shares. When the company gets the first round of funding you know I I'm entitled to basically you know diverse one hundred share which is at three thousand whatever three lakhs would have come to me. Yeah. Now what happened was that company came to us and they told us that this is going to really go very high so please don't dilute and they wanted to save some equity because valuation was such that you know it was going in favor of the investor control was basically becoming somewhat you know equally brilliant. So they wanted sign to hold in total in the process before they got the investment they had raised capital and over three percent was maintained. So absolute number was also coming out bit on a larger side. So we if we had actually liquidated instead of three lakhs it would have gone to the nine lakhs or something like that but we held back. And exactly what Prem is allowed to mention you know there was a same problem between the two promoters and company actually got burst. Yeah. So we lost our initial capital and there was no no initial cash inflow and then there was no no liquidation possibility at all. And in the process we decided that come back may whatever could be higher side potential higher side just liquidate one third. That is one example. Another example recently we we have got three funding commercial funding we see funding for three of our companies. One company actually you know they like they the valuation was really really huge. Huge in the sense it was coming to eight nine nine to ten thousand per share kind of valuation and amount that they were getting was only one crore or something like that. So if we had liquidated you know almost one third of money would have come to sign. Yeah. So come really requested us and instead of one third we liquidated smaller portion. In another company we took complete one third. So these are the several example I don't know whether it gives some clarity or not. It's a sort of clarification. So you are mentioning that the incubator is open to the internal entries right. Suppose if there are no internal entries are you advertising or calling for applications. We are not actually we are fortunate enough so far that we know but I think it's a good idea to do that. Now how do you do your you know promotional that is again dependent to your own local circumstances. Advertising doesn't help always. The best way to basically spread through you know word of mind through through if you're an academic institution you'll spread the word through your alumni. You know create success story and try to publish those success story within the your you know academic you know whatever gathering is there and so on so forth or wherever appropriate forum yeah that is the way. Suppose if there are more entries at a time how we are going to just sorting them out. So it has to be through review process and I can give you for you know small so again I'm going to address it tomorrow that we invite business plan and then we send it for external review process and they are reviewed by those people who understand the business who understand the domain yeah and based on their feedback we take or we don't take. Okay what I feel is that making it open to only internals it may not there may many entrepreneurs who are really good and then who can fare better. There should be some opportunity for them to get it. Yeah sure so I don't say that you know all the incubators should focus on their own community. We have some so actually it is getting tomorrow is getting covered in our you know how do we define relationship with the host institute. We also sometimes from incubator side feel that it is a limiting factor for us limiting you know the condition for us but we are hosted by our you know IIT Bombay and like they want us to limit so we have to limit. We can't really limiting to the institution itself it may not be fair. No I think it's not it's not no I think it is not emotional relationship of child and parent in that sense. Essentially you know essentially I think that is what I am going to cover that I have come across many incubators who are you know actually making effort to stay with the host institute. Yeah I don't think as an incubator if you are in academia it's a good good practice because you really want to leverage in your host you know capabilities you want to leverage their infrastructure you want to leverage their brand financial support comes yeah lots of value are coming and then you you like it is a limiting thing but it's a process yeah down the line seven years we can tell them that okay we have done enough now allow us to take at least you know out of time let there be one or two from outside yeah but I think that they do it and you have to be bound by what your host says but if they are putting enough value so we don't basically get into argument it is fair it is unfair if we are taking really bad companies at the cost of good companies from outside then perhaps it's a matter of concern for us. So it's a very straightforward parent you know host and host it's host and entities relationship that is coming in the realm. Your revenue generation revenue model that you are charging is three two you said three to five percent three to eight percent that is equity model equity model but like you said you need to cover your operational cost also so for that I think since yours is mainly basically IT related incubator majority like case for NCL like we have biotechnology material science related incubator wherein our own investment is also too high then once the number of incubators will enter in our incubator even we are sharing with them the special equipments also so again the equipment maintenance cost running that equipment also we have no there is a operational budget so in that case how should we what can you guide us like how should I think we can take this issue tomorrow because essentially I think your consideration model also has to be what your infrastructure is it should recover some kind of cost so that's what you know for us pure equity was not recovering we evolved something I think you can also do in I can address very briefly in the sense that you know you still can have equity but for specialist support you know you can actually pass the cost to them and then when they are getting into domain which is a capital incentive intensive you know they would have also basically and I guess you people also take non-startup right stability so ideally if you are taking non-startup you should pass the cost because they have deeper pockets one of the reasons why we didn't go for you know commercial cost because we essentially focus on stuck up so I think equity model is a actually doesn't make sense in your case you should maximize cash consideration from them