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Posted in Community :

Startup World

 
Started by : Veena Gupta, Analyst, Blackstone Group   11 17 2010 07:58:31 +0000
Industry : Hedge Funds/VCs/Private EquityFunctional Area : VC funding(Entrepreneurship)
Activity:  24 views;  last activity : 12 20 2010 13:28:12 +0000

Today in the VC circle we call the situation at present as "Storm Clouds" that investors are behaving badly, making $5M to $15M investments in web startups in days, without proper due diligence. Even larger web companies like Facebook and Google are contributing to the madness, paying tens of millions of dollars to acquire companies to shut them down, just to get access to their engineers.

So, why there is too much of VC money and too little startup talent??

 
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1 2 3 4 5
1 oversupply of capital from startup market and IT market
2 VCs like any other investor have to diversify
3 Market conditions
4 where is that VC money??
5 Lack of talent utilization

oversupply of capital from startup market and IT market

idea posted by Veena Gupta Analyst, Blackstone Group

In the startup market, capital comes mostly from angels, Super Angels and venture capital funds at the early stages. As companies expand, they can tap into other sources of capital such as strategic investors, financial institutions, public markets and mergers and acquisitions to grow or provide liquidity to shareholders. In the IT market, capital comes from a number of sources including public markets, financial institutions, mergers and acquisitions and cash flow from operations. There is currently excess capital in the both the startup and the IT market.

And the situation is even IT people are investing in startup's these days..hence we are seeing there is more money interms of VC funding but there is shortage of startup talent....

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by Rathin Deb, Freelance Retail Consultant  | 11 30 2010 14:08:48 +0000

Veena I am in agreement with you.

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Explained well and I support this side views posted. Thanks for the referral Ms.Veena.

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Our young talents, though they have inclination to venture into business, they see a great stumbling block in getting the clearances from the government. Mostly, they are governed by touts and vested interests within the government machinery. Before they actually venture into any new area, they would have spent sizeable investments for acquiring required licences by paying money in black, which obviously would not be accounted for. There is also a problem that they would not get the required talents, as the experienced ones would not like to join hands with the new entrants. Like this, there are so many fallacies in this country.

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VCs like any other investor have to diversify

idea posted by Ravi IT PMO, Cricket Communications
If VCs do not diversify they will learn hard lessons.
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I agree with you Ravi

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Market conditions

idea posted by Jaygopal Raghavan Marketing Manager, Landmark Group
The economic gloom suppresses the entrepreneurial spirit in most. Why take a risk with VC funding when you are safe in your job getting your salary every monmth on time would be the mantra going around. It is a wait and watch policy. People who are comfortable earning the big bucks dont want to lose that comfort factor and jump into uncertainity
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where is that VC money??

idea posted by Shridhar Chandru Business Developement Manager, ERP Consulting Company
Iam sorry Though there are VC funding there are lot of formalities which is much tougher than running start-up itself. Think that is hindering the startups' growth
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Lack of talent utilization

idea posted by suhaschandra deshpande Marketing Associate
There is no dearth of talent in India. Only there is a need to tap those by VC's by creating appropriate forums.
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