Disrupting Through Democratization Of Start-Up Ecosystem: Dr Apoorva Ranjan Sharma
India is the biggest democracy in the world today and if we look back into the annals of the country’s history, master strategists existed here. When someone can combine a flair of both, something unique (Apoorva) is bound to unfold. The journey of Dr. Apoorva Ranjan Sharma, the co-founder of Venture Catalysts and the protagonist of angel investment from smaller towns, has been in pursuit of democratization in the start-up ecosystem. In true sense, his actions have been like that of Chanakya, strategic and incisively precise. Dr Sharma, a B.Tech (Electrical), MBA and Ph.D. (Business Incubators) is also the author of “The Role of Business Incubators in the Economic Growth of India”, a niche read in itself. He is the soul behind Venture Catalysts, which is the first integrated Incubator in India. It has leapfrogged as Asia’s largest start-up incubator in a short span compared globally, where the start-up markets are extremely volatile, uncertain, complex and ambiguous (VUCA) with high mortality. How did Dr Sharma strategize for VUCA readiness through democratization in the nascent start-up ecosystem? What makes him and Venture Catalysts so unique in the start-up space?
From Dream to Summit: Trekking the untrodden path
“The angel investment landscape was very restraining when I began seeing this dream,” says Dr Sharma. In 2000s, Venture Catalysts was envisioned, there were a handful of players and angel investment that operated like a finest club with limited access. Democratising it ‘for the people’, ‘by the people’ to make the start-up ecosystem truly ‘of the people’ was the thought behind Venture Catalysts. Dr. Sharma had a steadfast belief that the people strength in India is something to be leveraged for the purpose. With his entrepreneurial skills, the venture has been able to build a vast network of nearly 5000 angels spread across 35 odd cities in the country, especially from tier-II and tier-III cities by showcasing the opportune investment panorama to the angel investors (High Net Worth Individuals) across these cities. The democratic ecosystem thus created, is a vibrant space with opportunities galore for all enthusiasts in pursuit of creating fortune.
The enterprise in its brief journey has created a portfolio of about 169 start-ups, with rising confidence amongst investors. It has had 30 successful exits with multiplier rates up to 27X, and its portfolio valued at USD 1.7 billion. Some leading companies accelerating to multiply fortune in its portfolio include BharatPe, HomeCapital, Beardo, Supr, FYND, Innov8, PeeSafe, IGP.com, Coutloot and BlowHorn, among others.
See, Seek and Conquer: Mastering Opportunities
In the context of entrepreneurship research, we encounter as to why do some people, but not others, recognize opportunities? Difficult to answer! For Apoorva, his opportunity identification for democratization of start-up incubation in smaller towns and angel investing was grounded. In mid-2016, global major SoftBank led round of investment funding in budget hotels start-up, Oyo Rooms, which had been started by a small-town entrepreneur with Dr. Sharma supporting its inception. His Mumbai-based accelerator mustered a 250 X return on its initial investment in the start-up.
Venture Catalysts equipped itself with a flexible structure to mitigate the VUCA business environment by assimilating within its ecosystem investors, micro firms, legal and financial experts. Thus, an inclusive and representative start-up support was on offering in a wide range of sectors. The locus of control on tapping growing market of innovators in various fields, differentiated Venture Catalysts from their competitors. As with start-up ideas, many fail but Venture Catalysts monitored the probable mortality of a venture, ensuring maximum salvaging beforehand for all stakeholders.
Democratization Process
The ground level challenges, uncertainties and risks in a start-up business venture is simply inherent. Through democratization, an enabling ecosystem for more investors to explore the high –return asset class has been created by Dr. Sharma and Venture Catalysts. The subtle shift from the big cities is an indicative sign for local start-ups to position themselves in leveraging the talent with low operational costs. The selection criteria for determining on an investment is thorough an knowledgeable experts who drill to the core of the idea. Less than 1% of start-ups approaching Venture Catalysts scale through the stringent tests for being financed. At the idea stage, founders’ capabilities, attractiveness of the sectors, ideas are evaluated. For the seed stage and next round, the product-market fit becomes very important. But at the end of the day, the founder’s appetite for the venture and belongingness is a key criterion. Venture Catalysts qualifying standard for selection has reduced the mortality rate below 3%.
Thus, at each stage, a democratic process is evident from the application stage to the expected performance stages. Venture Catalysts has positioned themselves to operate on the principle of 4S – Start, Shape, Scale and Succeed. Their endeavour is towards creating the largest community of entrepreneurs and investors globally through education and technology, marching towards being the world’s largest integrated incubator with a democratic approach, thus mirroring the resolve on self-reliant India.
The Test
The biggest challenge that a start-up faces at inception is to manage the initial capital seed amount and the rotational working capital. These significant mandatory investments often create despair at the starting stage. Most of the innovative start-ups faced challenges in arranging this due to existing multiple stages and hurdles to approach the end investors. Apoorva capitalised on this existing gap and harped on the opportunity for establishing democratization of the start-up funding ecosystem.
Fore comes the Foresightedness
The testing times brought to fore Dr Sharma’s foresightedness in the nascent start-up ecosystem with minimum life support systems. The foresightedness of its founder assisted Venture Catalysts to craft a truly democratic and self-sustaining ecosystem for funding start-up. What delineates a democratic setup is the expectation of equal treatment to all, and the team at Venture Catalysts were aligned with this. Democratization, thus began with a thought, inculcated into the ideology and translated into action. With the urge to disperse the seeds of a democratic start-up ecosystem far and wide, Venture Catalysts has established nearly 10 incubator centres across India, concurrently linking with several international funds as an exposure for Indian start-ups. Dr. Sharma has displayed strong self-belief, well defined internal locus of control, ability to influence stakeholders, proactive thought process, innovatively steering through constraints in building a reliant and resilient ecosystem. The expansion in 5 other countries - Hong Kong, Singapore, UAE, Saudi Arabia & USA is an indication to the emergence of Venture Catalysts as a strong player. Dr. Sharma intends to accelerate his venture’s presence and increase the horizon of democratising start-ups globally. Onward Ho!
