Global Themes

On Globalization & Venture Capital

On India, China and Venture Capital

Louis Turner of Asia Pacific Technology Network co-hosted a seminar with Chatham House last week on “The Venture Capital scene in India and China“.

I was on the panel with Matt Rothman, Managing Partner of Hemisphere Capital,  Sumit K Majumdar, Professor of Technology Strategy, University of Texas at Dallas and William Gillespie, Director and International Counsel, Tiger Capital Partners

I shared some slides (here: APTN India China slides) at the beginning of the session focusing on Investments in India and highlighting the key differences between India and China. 

Some of the points that came up during the discussion were:     

  • A direct comparison between India and China does not make much sense as India is probably a decade behind China (see e.g. this chart from IBEF )
  • In China, there are now signs of IP-based investments happening (see e.g. Verisilicon
  • In India, this is yet to happen and most of the money is still going into private equity deals and PIPEs 
  • Exit environment and clarity on regulatory issues are two of India’s strong points 
  • However, in both these economies, seed-stage funding is almost non-existent

The funding gap at seed-stage is something I worry about a lot. It is not just a matter of financial resources either – there is a dire need for mentoring skills, advice and experienced managers who know how to scale businesses and expand across geographies. In India, an effort has been made in this direction by the Band of Angels. This is welcome but probably not enough.   

We are yet to see experienced managers from large enterprises or those who have worked in start-ups/tech companies abroad making the transition to start-ups in India. Hopefully the situation will change before long.

I am not personally aware of any angel network in China but I am almost certain that it exists – at least at an informal level. In the next few months, I will try and find out more about this.    











September 26th, 2006 Posted by | China, Conferences and Panels, India, My Presentations, Venture Capital in Asia | no comments

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