Taking a cue from a rapidly growing trend in the Silicon Valley, a few Indian venture builders, such as Mumbai-based Sparknext and T-labs, are looking for people who have the qualities to become entrepreneurs.
Known as venture builders, start-up factory, start-up studio or venture labs in the US and Europe, this emerging trend is set to pick up in India, where a team of start-up veterans take multiple ideas from scratch and turn them into independent companies using shared expertise and resources.
All ideas are generated internally or through network of investors and industry experts. Then, the team looks for entrepreneurs and provides them with resources for design, marketing, technology and fundraising, to build and grow these ideas. These entrepreneurs are called ‘Entrepreneurs in Residence’.
Ahmed Naqvi, founder of Mumbai-based Sparknext and co-founder of digital agency Gozoop, terms this trend “the new currency of early venture capital”. Sparknext, set up earlier this year, is already working on half a dozen business ideas. Of these, about four have raised their first round of fund in just a few months. Some of its recent launches include Fiticket (health fitness app), Happy2Refer (referrals-based app) and Made in Heaven (wedding app). The rest of the start-ups will be hitting the market in the next couple of months.
Some of them are people who have built businesses in the past. For example, Henry Bruckstein, who previously sold his company CloudSquad to Persistent Technologies, is building Campaignstars (email marketing platform). Ex-Mumbai cricketer Sahil Kukreja is building Fiticket and ex-banker Nimit Bavishi has built Happy2Refer.
Naqvi said, “There was a high percentage of start-ups that did not survive. Most of them were repeating mistakes. We decided to use our experiences while working with India’s top unicorns across design, technology and marketing, to identify winning techniques.”
He added that the start-ups, being developed in Sparknext, get exclusive access to industry leading designers, engineers, marketing, content writers and a network of mentors.
At Venture Builders, entrepreneurs are provided with unfair advantages to survive, disrupt and succeed with experience, proven resources, experts, product-market fit, the first customers, the first hires, processes, hacks, a network and wisdom.
Spark-next is currently in the process of setting up a financial vehicle that will follow up on early stage rounds of its start-ups, Naqvi said.
Unlike accelerators and incubators, venture-building companies are the owners of the entities they create, with the entrepreneurs having a small stake of 1-2 per cent, along with a monthly stipend. However, as the companies grow and get more external funds through private equity, the venture builder dilutes its equity and gives some stakes to the entrepreneur. Serial entrepreneur and angel investor Sanjay Mehta said, “The concept is new but can work wonders for wanting-to-be entrepreneurs. This model will help build successful companies in a few years as entrepreneurs will get a stable platform from day one.”
He however added that the only issue could be the “immature” behaviour of entrepreneurs. Citing the example of Germany’s Rocket Internet, Mehta said the venture-building philosophy is a rising movement in the tech and start-up industries where the blue print is ready.
“One just has to execute on plan without worrying about office space, team and fund raising. In next 5 years, the ecosystem will have more such venture builders.”
Source: Business Line