Mumbai biz duo team up to set up nursery for startups

Ravi Kiran, former South East and South Asia CEO of Chicago-based Starcom MediaVest Group, and former founder of Fame Cinemas Shravan Shroff have joined hands to put together what is being billed as the country’s first ever angel-backed startup accelerator, VentureNursery.

Kiran and Shroff are angel investors and members of the Indian Angel Network and Mumbai Angels. Shroff sold Fame to Inox in 2011 while Kiran quit Starcom in 2010 to pursue new ventures. Angels are affluent investors who provide informal start-up capital for new businesses.

The first angel to be located in Mumbai, VentureNursery (VN) aims at mentoring and accelerating up to a dozen start-ups in the first year. Following a unique Angel-in-Residence model, in addition to providing business and infrastructural support, VentureNursery will offer intensive and immersive mentoring to a batch of entrepreneurs by active angel investors, throughout the acceleration process.[caption id=“attachment_250813” align=“alignleft” width=“380” caption=“Shravan Shroff (left) and Ravi Kiran.”]  [/caption]

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Participating companies that graduate successfully will be considered for seed funding by angels. As opposed to incubators which are essentially government-run, accelerators are more intense and active mentoring platforms, have shorter durations and are run by private entities.

Kiran and Shroff said entrepreneurs often approach the angel network in an underprepared stage. Consequently, they take too long to raise funds, at a time when they should be focusing on their business model. This is the stage where VentureNursery will come in and help the startups in the pre-angel stage.

VentureNursery will also take up ‘sweat equity’ in the startups it will help accelerate. Many startups fail to move to even the basic next stage of angel funding for want of proper mentoring. While as many as 200 potential startups apply to the angel networks every month, only about six to eight are allowed to pitch for funding. Even less actually get the funding.

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“The idea is to give smart idea owners a fighting chance to take off,” explains Shroff, who is also managing partner of South Yarra Holdings. Kiran, on his part, also runs Friends of Ambition (FoA), a growth advisory firm targeted at middle-India.

Modelled around some of world’s best known accelerators, VentureNursery will be run by incubator expert Apoorv Ranjan Sharma, who has joined as executive vice-president. He was till recently Head, West India, for Indian Angel Network.

While VN will be sector-agnostic in the long run, it will initially focus on five sectors - media and entertainment, retail, e-commerce, consumer technology, education and cleantech.

Hybrid mode: Sharma said, “VentureNursery will run on a hybrid model. Its primary method will be through the boot camps it will run twice a year.The founding team of each chosen start-up will be invited to work in our office and will be given working infrastructure and business support services through our partner companies.”

Over the 13 week programme, VN’s Angels-in-Residence and Charter Angels will work closely with the start-ups on their gap areas to ensure that each start-up evolves as a team and develops business proposition. “In addition, under our ParallelTrack programme, we will accept relevant applications from a few start-ups every year outside the boot camp as well.”

Kiran said in addition to the Angels-in-Residence and Charter Angels, the accelerator will work with a group of Advisors-in-Residence and Executives-in-Residence to complete the support to the start-ups. VN aims to announce the first list of Charter Angels and the Advisors-in-Residence shortly.

The applications for the first BootCamp will be accepted starting 1 April 2012, through the company’s website. Interested start-ups can also approach VentureNursery through social platforms such as LinkedIn, Facebook and Twitter.

Shroff said through the sweat equity model, VN hoped to eventually earn some revenues though that was not the chief aim of the venture. “Several angels want to do their bit and give something back. Mentoring startups is, therefore, our chief objective,” he said.

Budget hit: As reported earlier by Firstpost, the budget has hit angel investors and startups hard by seeking to impose a tax on the premium charged over the fair value of shares when investors buy stakes in closely-held firms. Speaking about the move which has raised the hackles of the angel investing community, Shroff, however, said the intention of the government was never to kill angel investing or entrepreneurship, but to deal a blow to unaccounted money. “I am sure the intention of the government is noble. There are several representations which are being prepared on this aspect, and I am sure the government will do something to address the problem,” Shroff said.

(The writer is Editor-in-Chief, Entrepreneur magazine)