Through our new series ‘Make an Impact’, we at The Better India aim to explore the multiple facets and nuances of the social impact sector from varied perspectives–the entrepreneurs, the investors and the beneficiaries.
Continuing the coverage of farm equipment aggregator Gold Farm (you can read all about that here), we speak with Infuse Ventures, who funded Gold Farm.
We understand from one of the founders, Shyam Menon, how they evaluate the companies that they see and what they found most exciting about Gold Farm.
“In the initial stages, you are betting on the people more than the business and hoping that they will figure it all out along the way.
The hope is that the investment will pay off in the long run,” he says.
“Typically we (investors) are engaged with the founders for a long time. Even in this case, we have known them for a long time. We invested in them at a rather early stage–almost two-three years ago when they were germinating from an idea into a company,” says Shyam.
When asked if there was a process of finding the companies to invest in, he says, “There is no magic bullet to any of it. It is the combination of a whole lot of things–the sector, the potential of the space, the idea they come with, the type of people running the show, the experience in engaging with them, so it’s a culmination of all this and more.”
After an investment is made, the next step is to determine the extent of involvement the fund has in the company. Shyam elaborates, “In a company like Gold Farm, which is in its nascent stages, there is a lot of hand-holding that happens. Our role in such an investment does not end with investing the capital. We share a lot more with the entrepreneurs–our network, our government connects, corporate connects and all of it.”
He adds, “Often, they are first time entrepreneurs who have never built anything before, so they require more help. In the case of Gold farm, both the partners had been through the start-up journey before, and that helped.”
Infuse Ventures is a young team looking to identify and invest in seed and early-stage businesses across sectors. They are aligned with the Center for Innovation Incubation and Entrepreneurship (CIIE), IIM Ahmedabad, and draw heavily from the CIIE ecosystem.
Speaking about some of the mistakes that most start-ups make during the time of trying to raise funds, he says, “Most companies get the size of the market wrong. It is usually not as large as the estimate they make.”
“Another mistake that is made across the board is underestimating the number of people needed in your team to deliver.”
In fact, he went to say that most companies make all these mistakes and more – there is no order to it.
Speaking about the companies that Infuse Ventures rejected and have today gone to become successful ventures, he says, “We all have those companies, and in fact, our list is quite long.”
Making investments, especially at the early stage requires a conviction on the team and the market that is being addressed. The rise of such an investor class has empowered young minds to branch out on their own and start businesses, to leave their marks in the ecosystem. In a capital-starved country like India, where the need of the hour is job creation and improvement of livelihoods, impact funds like Infuse play a major role in creating opportunities.
Here’s to their continued success.
(Edited by Shruti Singhal)