Other Comments from the panelists:
Deepak Natraj, Managing Director, Aarin Capital
Fund raising is about 3 Ts: Theme, Team and Timing
Pitch Book for Raising from Domestic Investors: Create FOMO
“The majority of wealth created in the IT Sector ($100 B+) was ‘captured’ by FIIs, there were hardly any Indian investors. Now, here are Indian Startups in a healthy environment with phenomenal talent. How can you miss out on this? How can you not be a part of this?”
Sandeep Parekh, Founder, Finsec Law Advisors:
We’ve got everything right in India for having a thriving PE/VC fund industry in India – especially the entrepreneurial and fund management talent – except for tax. The Category 3 AIF fund for example is “dead on arrival” since such funds (that will invest at at least 50% of its corpus into listed companies) attract 32% tax – when the investor can invest directly in the public market stocks and pay zero on long term capital gains (after a one year holding period).
Abhishek Goenka, Partner, PwC:
The problem with Finance Ministry officials is that they view providing “pass through” status for funds as some kind of incentive / concession they are awarding to the industry (i.e., as something that results in a loss to the exchequer). While foreign investors are enjoying benefits through treaties, unless regulation makes domestic investing attractive from a tax perspective, it’s not really going to work.
Sateesh Andra, Managing Director, Endiya Partners
“During good times, everybody wants to be an angel; in fact, there’s no angel left in heaven.”
“The Europe or US LPs have certain exposure to different asset classes including venture (capital), the most riskiest asset class. In Indian context, majority of the LPs do not have exposure to even the other asset classes.”
In the current conditions “at best only 5 or 10 funds can raise $20-25 million dollars each from pool of (domestic) capital.”
The Electronics Development Fund actually reached out to Endiya Partners to invest rather than the other way round because of expertise in EDF as well as the theme of investing (Semiconductors) by Endiya Partners.
The panel discussion was recorded at APEX’16 – Private Equity & Venture Capital Summit. Catch the discussion below
Venture Intelligence is India’s longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.
Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India’s First & Most Exhaustive Transactions Newsletter.
