Venture Intelligence - APEX' 12 Summit & Awards
Venture Intelligence - APEX Summit & Awards

India's Premier Investor-Entrepreneur Interface

 
March 6, Mumbai

The Highlights

Engineering a Win-Win Exit

Special Address by Dr. Mukund Rajan of Tata Sons

Does Growth Capital need tweaking for India?

Enabling the Exit - Special Peer to Peer Discussion

Art of Attracting (First Round) Investment

APEX Private Equity & Venture Capital Fund Awards

Venture Intelligence - APEX' 12 Summit & Awards

Event Supported By

Knowledge Partner
Finsec Law Advisors

Co-Host

Industry Partner
IVCA

Headland Capital Partners

Avalon Consulting

Infollion

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Engineering a Win-Win Exit

Engineering a Win-Win Exit

The stage for the session was set with a presentation by Sridhar Venkiteswaran, Executive Director, Avalon Consulting on “The Looming Exit Crisis – Finding a Way Out”. The Session was Chaired by Raj Nair, Chairman, Avalon Consulting and the Speakers included:

  • Shankar Narayanan, Managing Director, Carlyle Group
  • K Ganesh, Co-Founder, Growth Story
  • Manish Kejriwal, Managing Partner, Kedaara Capital
  • Avnish Bajaj, Managing Director, Matrix Partners India
  • Vishal Tulsyan, MD & CEO, Motilal Oswal PE
  • Sanjay Kamlani, Co-Founder, Pangea3

Shankar Narayanan of Carlyle pointed out that, as an investor holding a minority stake, he needed to be convinced the promoters were "hungry enough" to grow the business ("someone wanting to play golf in the afternoons isn't going to cut it!") and will have high corporate governance standards. Also, he felt mistakes made by Private Equity investors in India - which, as a country, was probably unique in that private company transactions take place at multiples higher than public market comparables - were mostly on account of not adhering to valuation discipline.

Avnish Bajaj of Matrix Partners India felt that, given the overwhelming unexited portfolios of the Indian PE industry, a key area of focus for investors should be in converting companies that seem poised to deliver modest returns into good ones. Vishal Tulsyan of Motilal Oswal PE added that exits via IPOs would continue to be few and far between and investors need to rely on the strategic (M&A) and secondary sale routes.

Manish Kejriwal said the investment team at the newly formed Kedaara Capital will, before making an investment, identify and actually name a few potential acquirers (for the target company) as part of its memo to the firm's investment committee. He noted that the involvement of multiple investors was one of the common features of situations that resulted in poor exits in his previous investing experience. He advised fund managers to be upfront with their past failed investments when pitching to raise capital.

Highlighting how he would be happy to work again with eight out of the nine funds that he had raised capital from in his previous ventures, serial entrepreneur K.Ganesh recommended PE/VC investors to realize that, while they had a portfolio of other companies to fall back on, the entrepreneurs were "all in". Fellow entrepreneur Sanjay Kamlani noted that the practice of investors in India to transfer the committed capital in tranches often constrained entrepreneurs in doing the right things when it came to governance standards (for example, to hire a head of finance to take charge of reporting requirements, etc). Shankar of Carlyle added that it is important for investors to win credibility with promoters through demonstrated action (rather than mere words). Avnish of Matrix emphasized that "soft incentives" (to ensure compliance on governance issues) worked better in the Indian context than formal board meetings.

More pictures from the session can be viewed here. The video of the session can be viewed from here.

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Special Address by Dr. Mukund Rajan of Tata Sons

Dr. Mukund Rajan

As part of his special address on the lessons from the Tata Group's joint ventures with various MNCs - including from the amicable parting of ways - Dr. Mukund Rajan, Member - Group Executive Council, Tata Sons highlighted how the JVs always kick off with a 10 year, 5 year and 100 day plan. He added that, as long as the venture is clearly led by its board, it will not have to worry about the different priorities and pressures of the individual stakeholders.

More pictures of Dr. Mukund Rajan at APEX'14 can be viewed here. His presentation can be downloaded here.

The video of the session can be viewed from here.

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Does the Growth Capital model need tweaking for the “Indian Context”?

Growth Capital Session

The Speakers in this session included:

  • Seema Jhingan, Partner, LexCounsel
  • Dimple Sanghi, Director, Investments , Omidyar Network
  • Avinash Luthria, Partner, Gaja Capital
  • Arun Uday, Principal, Headland Capital
  • Shamil Chotai, Founder-Director, Tridha Advisors

Shamil Chotai of Tridha Advisors, who chaired the session, likened Growth Capital in India to Maruti Suzuki. Depending on the season, its market share might go up or down; but overall, it will continue to account for a majority of the market.

Dimple Sanghi of Omidyar Network said a Growth Capital investor seeking financial returns is like a passenger who hires a cab for a long distance journey from Place A to Place B. He/she just assumes the person in the driver's seat (the promoter / entrepreneur) has all the necessary qualifications (like the driving license; knowledge of the route; etc) to deliver on the promise. As long as there is no negative surprises en route, the investors - while they should have a "toolkit" ready to add value to the enterprise (beyond the money) if requested - have no interest in interfering with its "steering".

Avinash Luthria of Gaja Capital said that, in his view, there is no problem with the Growth Capital as a strategy for the Indian market; the problem instead has been in the execution. Arun Uday of Headland Capital agreed, pointing out that, as long as one believes India will continue to be a growth economy, it will require the support of growth capital investors. However, there is no denying that achieving good returns has been challenging and market forces will demand a tweak of the model.

Seema Jhingan of LexCounsel suggested that various provisions in the legal agreements that were leading to conflicts between promoters and investors in minority growth investment situations - including board representation, voting and reporting rights, pre-emptive & restrictive rights and complicated exit options - could be made more practical. Click Here for a copy of Seema's slides.

More pictures from the session can be viewed here. The video of the session can be viewed from here.

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Enabling the Exit - Special Peer to Peer Discussion

Founders and executives speaking as part of this special "peer to peer" track shared some amazing experiences and strategies to create exits in the Indian context - both via M&A and public markets.

The discussion started with Pangea3 Co-founder Sanjay Kamlani relating how the company's board decided to provide Thomson Reuters - a vendor to the company which had been tracking it closely since inception - a minimum valuation expected and a deadline, only after which it would start approaching other potential buyers. Sanjay also related why, despite going an existing partner - with whom all the stakeholders were very comfortable - Pangea3 still hired an investment bank to facilitate the transaction and, also brought in the good offices of its non-executive chairman, to sort out "hairy issues" that cropped up. Since the founders and other top executives would need to work closely with members of the buyer team post transaction, it is key to have such buffers during the deal negotiation. Other speakers in the insights filled track included:

  • Sesh AV, MD, Basiz (Session Chair)
  • Sandeep Parekh, Founder, Finsec Law Advisors & Formerly Executive Director at SEBI (who provided the legal and regulatory perspective)
  • Raman Gopal , President & Head - Business Development, Hinduja Group
    (who provided the acquirer’s perspective)
  • Pramod Maheshwari, CMD, Career Point
    (which provided a successful exit via an IPO in the Indian markets for its PE investor)
  • Neeraj Bhargava, CEO, Zodius Capital & Former CEO of US-listed BPO firm WNS
  • Ajay Bohora, Co-founder & CEO, Credila Financial (majority owned by HDFC) & formerly Co-founder of ClaimsBPO (acquired by WNS)
  • Chandu Nair, Co-founder, Scope eKnowledge (acquired by Quatrro BPO)

Enabling the Exit track

(L-R) Sandeep Parekh, Chandu Nair, Sesh AV and Ajay Bohora

More pictures from the session can be viewed here. The video of the session - which is a not-to-miss one for entrepreneurs planning to go in for an IPO or M&A transaction - can be viewed from here.

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Art of Attracting (First Round) Investment

This parallel track started with the following active Venture Capital Firms introducing their firms:

  • Inventus Capital - represented by Rutvik Doshi
  • Nirvana Ventures - represented by Vikram Gawande
  • Seedfund - represented by Tarana Lalwani
  • VenturEast - represented by Vishesh Rajaram

First Round Capital Session

It was followed by an innovative Role Play featuring a negotiation between an "entrepreneur" - played by Ravi Gururaj, Co-Founder of Frictionless Ventures and Harvard Angels India - and "investor" - played by Sharda Balaji, Founder Partner, NovoJuris - that covered various aspects involved in first round funding. This was followed by a Panel Discussion that also involved Alok Goyal, Partner, Helion Ventures; Sampad Swain, Founder, Instamojo and Avlesh Singh, Founder, WebEngage.

Highlights from the panel discussion included Ravi Gururaj's views on:

  • How to leverage investor board members ("make them work for you")
  • Using fund raising as a "signaling tool" (for example to potential acquirers)
  • Why valuations are higher in silicon valley
  • Value of delaying early fund raise; using convertible notes & other potential alternatives

and Avlesh Singh of WebEngage's telling of:

  • Classic dilemmas facing entrepreneurs raising VC funding in India
  • Prior startup experiences (that he had gained at Burrp, etc)

More pictures from the session can be viewed here. Videos from the session can be viewed from here.

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APEX'14 Private Equity & Venture Capital Fund Awards

The evening's session kicked off with a Stand-up Comedy act by actor Edward Sonnenblick...

Edward Sonnenblick

....who had the audience in splits

Audience

It was then time for the special address by Sanjeev Aga, Business Leader & Former CEO, Idea Cellular during which he outlined the reasons why he felt PE/VC investors and Entrepreneurs can look forward to the next few years with more optimism.

Mr.Sanjeev Aga

Mr. Aga then gave away the APEX'14 Private Equity & Venture Capital Fund Awards. Started in 2007, the Venture Intelligence "Awards for Private Equity Excellence" (APEX) is the first awards of its kind for PE & VC funds in India. A key feature of the APEX Awards is that the awardees are chosen by a Jury Panel consisting exclusively of Limited Partners (i.e., investors in PE/VC funds).

Jury members for the APEX’14 Awards included executives from Adams Street Partners, Asia Alternatives, CDC Group, Evolvence India Fund, FLAG Squadron Asia, IFC, Pantheon Ventures and SEDCO. The APEX'14 PE/VC Fund Awards Press Release is available from here.

Ashley Menezes, Managing Director, ChrysCapital receiving the “Best Private Equity Investor-2013” Award

Ashley Menezes, MD, ChrysCapital receiving the “Best Private Equity Investor-2013” Award
on behalf of the firm

Deepak Gaur, Managing Director, SAIF Partners receiving “Best Growth Capital Investor-2013” Award

Deepak Gaur, MD, SAIF Partners receiving the “Best Growth Capital Investor-2013” Award
on behalf of the firm

Founders of Seedfund pose after receiving the “Best Venture Capital Investor-2013” Award

Founders of Seedfund pose after receiving the “Best Venture Capital Investor-2013” Award

Kotak Realty Funds Director V Harikrishna receiving “Best Private Equity in Real Estate Investor-2013” Award

Kotak Realty Funds Director V Harikrishna receiving the
“Best Private Equity in Real Estate Investor-2013” Award on behalf of the firm

The event concluded with some great networking and catching up over cocktails

Arvind Mathur of IVCA with Mahesh Murthy of Seedfund

Arvind Mathur, President of the Indian Private Equity & Venture Capital Association (IVCA) with
Mahesh Murthy, Founding Partner of Seedfund

More pictures from the APEX'14 Awards can be viewed here

More pictures of the Participants & Networking at the event can be viewed here

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Supporting Partners for APEX'14

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