Funding the winter has become the dominant topic for the startup ecosystem, but the situation is perhaps an opportunity for venture capital firms to find resilient startups, panelists said at TechSparks 2022, the flagship event of Your history.
Panelists, speaking on Investor Talk: Financing Amid Global Turmoil, said the financing winter is not a drastic event.
Anup Jain’s managing partner, Orios Venture Partners, an early-stage venture capital firm, said: “Our investment style hasn’t changed as we don’t see any slowdown.”
He was of the opinion that conditions are favorable for Indian startups and that there is greater domestic interest in these businesses.
However, there has been a slowdown in overall funding activity compared to 2021 and this has led to some changes in the ecosystem. Rajiv Srivatsa Partner & Investor, Antler India, said: “This year we have people who are serious about building something credible and this is a good thing.”
Echoing similar views, Ritu Verma, co-founder of Ankur Capital, an early-stage venture capital firm, said the current environment is also good for entrepreneurs, as they can build something that solves a client problem in instead of focusing on the next fundraiser.
Although mature startups, which may require a greater amount of capital, have had to deal with slowdowns in funding. Sudhir Variyar MD and Deputy CEO of Multiples Alternate Asset Management said that good entrepreneurs have shown their resilience in facing various challenges and this was evident in the way they navigated the COVID-19 lockdown period.
According to Rajiv, experienced founders understand that slowdown is part of the cycle and will focus on building a sustainable company.
Sudhir said investors are unlikely to be mesmerized now by the growth projections displayed by the founders and that investors will look for businesses that are sustainable.
The current phase is also perhaps the best time to build businesses. “The number of construction opportunities for India will only increase,” Ritu said.
To this is added the greater injection of capital by national investors to startups, which did not happen a couple of years ago. Sudhir said: “The confidence of HNIs and family offices to invest in start-ups is much higher now.”
“We are in the best phase now and everyone who wants to be an entrepreneur must become a big problem solver,” Anup added.