RESEARCH REPORT

Kashvi Golechha
 About Venture Catalyst
Venture Catalysts is Indias first integrated incubator for the development of start-ups,
supported by ecosystem catalysts, angel investors, management consultants and
advisors. Besides it also, facilitates mentoring, seed investments, through angel
investors and supports services for start up community.

In order to attract seed investments for incubated start-ups, Venture Catalysts has
created the eco-system enablers community including angel investors, micro VC firms,
consultants, legal and financial advisors and many more.

Venture Catalysts invests $100K $500K in early stage startups that have potential to
create enduring value for over a long period of time. Even though, Venture Catalysts are
structured as sector agnostic funds; we prefer companies in: IoT, Consumer Tech,
AR/VR, Health Tech, FMCG, E Commerce, SaaS, Fintech & AI.

The startups that Venture Catalysts funds, gets most benefited from the mentoring,
investor & industry network that Venture Catalysts brings to the table. A line up of their
most valuable offerings to the investee companies includes:
Community
Hands On Support
Mentoring
Connections
Capital
Curriculum
 My role at Venture Catalyst
I had the opportunity to intern at Venture Catalyst.
I decided not to work at one particular department, in order to get full work
experience. Over the course of the internship, I majorly worked as a research analyst.
I was provided with an excel sheet of various start-ups. I had to study and research
about the start-ups in detail and analyse whether investing in it would be of an
advantage and whether the start-up and the idea of business had the potential to
survive in the long run. I had to present my point of view about what I thought are the
pros and cons of investing in them.

Besides, research analysis I had to also collect data of the various active investors
looking to invest in start-ups and communicate with them informing them of any
upcoming events or start-up meetings

During my 3 months of internship at Venture Catalysts, I was working under AVP

Operations & AVP Regional Partnerships. The role was to assist them in their key
functional areas. For the time I worked at Venture Catalyst, I got to know a lot about
even different departments through my colleagues and in zonal meetings. It gave me
enough time to identify the problem and come up with a solution, details of which will
be elaborated below. It was quite an exciting experience, with plenty to learn about
the growing start-up space in India.
 Investment Industry
Private Equity is composed of funds and investors that directly invest in private
companies or engage in buyouts of public companies. A significant number of private
equity firms perform actions known as leveraged buyouts(LBOs) Through LBOs,
substantial amounts of money are provided in order to finance large purchases. After
this transaction, private equity firms attempt to improve the prospects, profits and
overall financial health of the company with the ultimate goal being a resale of the
company to a different firm or cashing out through an IPO.

Indian Market

2016 witnessed a decline in Indian tech startup funding, receding venture capital, and
a definite late- stage funding crunch in India. But 2017 began with a bang and have
created new hopes for the Indian start-up ecosystem.

Over $5.56 Bn was invested across 452 Indian tech start-ups during the period
January- June 2017. While in Q1 2017 about $1.46 Bn was invested across 206
start-ups, Q2 witnessed 217 deals amounting to $4.1 Bn in funding. Interestingly, in
Q2 2017, most of the amount was contributed by Flipkarts $1.4 Bn funding in the
month of April and Paytms $1.4Bn round led by Softbank Group in May.
In just nine months of 2017, Indian companies have raised record investments from
venture capital investors ( VCs) and private equity firms ( PEs).

Between January and September this year, VCs and PEs poured in $17.6 billion into
Indian companies, surpassing the all- time high of $17.3 billion in 2015, data from
market research firm Venture Intelligence showed.

There were 21 Investments of over $200 miilion in size, and 15 valued between $100
million and $200 million, Venture Intelligence reported.
 Company Investors Amount

Flipkart SoftBank $2.5 billion

Paytm SoftBank $1.4 billion

Flipkart Tencent, others $1.4 billion

KKR, CPPIB (Canada Pension Plan

Bharti Infratel Investment Board) $952 million

GlobalLogic CPPIB $720 million

Indospace Core CPPIB $500 million

ICICI Lombard Insurance Warburg Pincus, others $383 million

Tata Technologies Warburg Pincus $360 million

 Problems faced by Venture Catalysts
In 18 months of operations, Venture Catalysts has expanded its operations to 7 cities
in India while having its headquarters at Mumbai. Venture Catalysts in Mumbai is the
Central Support Office (VCats CSO) while the other cities also known as regional
partners are: Delhi, Bangalore, Surat, Raipur, Kolkata & Lucknow.

The key functional areas at Venture Catalysts are:

Sourcing start-ups looking to raise funds

Evaluate and identify investable companies
Due diligence and term sheet negotiation
Organizing pitch days and fund raising events
Building investor relationships
Facilitating and managing investments
Handholding, nurturing investee companies

While VCats CSO is at the heart of these activities, largely all of them are carried out
at the regional cities as well. But, the effectiveness and the efficiency is not the same
as that at VCats CSO. And hence, poor results.
 Problem: Poor results of expanding operations to multiple
cities

While activities were regularly being carried out at the regional

levels, the outcome wasnt as what was desired. Some of the key
areas of concern were:

Lack of quality start-ups were being referred from the region

Operational and logistic challenges in hosting pitch days

Low turnouts on pitch days and lower fund raise

Dissatisfaction and unrest growing between investor community

 Possible Solutions
From the interactions with various partners and their team members, it was
identified that poor and distorted communication was a major factor in the
poor results thus far. The step by step solution for this will be detailed
below.

Step 1:
Each team member is asked to write down their operations and
activities carried out as a part of their responsibility and daily tasks
relating to their functional areas.

Step 2:
Entire team sits together and brainstorms on the activities together
and thereby creating structured processes out of each which are
deemed acceptable and achievable to all.

Step 3:
Drafting Standard Operating Procedures (SOPs) for each functional
area including responsible persons and timelines. Almost like an
operating manual. (Document Attached)
 Step 4:
Sending out Request For Proposal to consultants and agencies that help in
formally drafting the SOPs.

Step 5:
Evaluating proposals vis a vis the scope of work, engagement, commercials,
past experience, delivery timelines, etc. (Document Attached)

Step 6:
Assigning the work to a consultant and allowing him / her to spend time with
the team to understand the requirements and tasks better.

Step 7:
Receiving, reviewing and accepting the SOPs as received from the consultant,
and adding that as a part of the training manual. (Document Attached)

Step 8:
Inviting all regional partners and their teams for a week of training and learning
at VCats CSO where they are trained to work as per the manual.

Step 9:
Assigning a key team member from VCats CSO as a regional partnership
manager ensuring he becomes the one point of contact between VCats CSO &
the regional partners.