We made our first investment through “The Sustainable Enterprise Fund”, an impact venture fund managed by Ennovent, of an undisclosed amount in Barefoot Power. The co-investors include Insitor, Oikocredit and The Grace Foundation. Unitus Capital advised Barefoot Power in this transaction.

Barefoot Power (BFP), a global, social for-profit enterprise, manufactures and distributes lighting products, solar phone charging and business development services specifically for low income populations that do not have reliable access to electricity. Founded in 2005, Barefoot Power has impacted the lives of 1 million people in over 20 countries.

Over 1.5 billion people globally lack access to electricity and Barefoot Power is on a mission, to bring affordable renewable energy and safe, healthy lighting to 5 million people by 2012 and 10 million people by 2015 to help eradicate energy poverty.

Barefoot Power

Rick Hooper, CEO of Barefoot Power shares with us his views on the investment and their plans for India:

What opportunities do you see in the Indian BoP market?
I see the opportunities in India as vast, a large market with a large off grid population. While our current products are directly suitable to these demographics, I foresee that we will also adjust a variety of products to suit the Indian requirements. With a suitably adapted range and in-country BFP support, I see that our products will be helping millions of people within only a few years combined with a healthy business for our investors and to be established local entrepreneurs.

What is unique about Barefoot’s model of providing power to the BoP?
Barefoot Power addresses the problem at its source, not trying to put in place large scale products that are costly and perhaps out of the reach of many. BFP focuses on Pico Solar that gives good quality lighting, power and phone recharge solutions at affordable prices so the local consumer can benefit immediately replacing costly and unhealthy solutions such as kerosene. Our products are backed by quality of design and warranty. In the small chance that something does go wrong, the level of our support is perhaps unique in this market space.

How can ennovent help Barefoot to access this market?
As everyone admits, India is a different if not difficult market to understand and enter. Ennovent with its on the ground knowledge is an important partner for us in our establishment and setup. I see Ennovent will be providing human resource advice, local conditions (state to state) advice, advice on target entry markets and most importantly introductions to local communities.

What are your global plans for the near future?
BFP continues to enjoy high growth in all our current markets. We, like all companies, continue to work on innovation of products as the market demands evolve. Having recently released our Generation 2.5 products that provide more light and longer battery times, we are now looking to both range extension and distribution reach. India in this case is a key market for our growth.

Read more about Barefoot Power and the investment news here.

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Last week I meet up with Shailesh who is representing Seedfund in Delhi and must say was pleasantly surprised to learn that they are even looking at concept stage ideas backed of course with mature teams. So what are some of the other things that make Seedfund stand apart besides being voted as the “Best Early Stage Investor at the Apex Awards”….

Backed by a formidable team with many years of experience in founding, running companies in addition to venture experience. Already invested in a dozen companies including recognizable names like redbus, afaqs, carewale, vaatsalya etc. Presence of a incubation center both physical/virtual where they house a few fledgling companies till they are old and strong enough to fly out and be on their own. The process to apply for incubation is the same for funding i.e. due diligence remains the same.

Interested folks can apply for funding through Seedfund and if they believe your business is interesting – and worthy of funding eventually by Seedfund itself, they might either offer you the full Seedfunding – or a tranched amount where you first graduate through the Incubator process, where we have an additional set of advisors and then automatically get the rest of the full-term funding- not a bad deal eh??

Key takeaway – They are open to early stage investments and are prepared to take the risks provided there is a solid team and skin in the game. Rumor has it they decided to invest in Redbus when it was at a concept stage not when the business was well proven

To apply to Seedfund feel free to click on the link – http://seedfund.in/plan/.

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TiE Delhi-NCR is hosting the Investor Showcase an initiative to connect investors to high potential entrepreneurs. The Showcase will highlight one investor and provide a unique platform for entrepreneurs to understand the investor’s areas of interest & investment philosophy.

This showcase will feature SAIF Partners, one of leading investors comprising an enviable portfolio that comprises MakeMyTrip, One97, JustDial, NSE and Network18 among others.

The Investor Showcase will enable you to discuss your current & future growth plans and funding requirements with best of breed investors. Needless to say, the limited seats on offer will run out fast! Confirm your participation now to get to know SAIF Partners like never before and interact with some of the investee companies to get a first hand account.

Date: 3rd March,2011
Time: 7pm followed by cocktails & dinner
Venue: Magnolia, India Habitat Centre, Lodhi Road, New Delhi

For More Details & Registration Click Here

About SAIF Partners

SAIF Partners is a venture capital firm that is sector and stage agnostic. SAIF is extremely active in early stage technology-enabled businesses. SAIF was the first institutional investor in companies such as MakeMyTrip (Consumer Internet), One97 (Mobile VAS), JustDial (Local Search), and HomeShop18 (eCommerce). The fund has strong experience of investing in companies at an early stage and helping them through multiple rounds of financings and eventually an IPO.

SAIF is growth investor in companies like Catmoss (Apparel Retail), Speciality Restaurants, Network18 (Media & Broadcasting), TV9 (Media & Broadcasting), Veta (Education), SIFY and IL&FS Investmart.

SAIF currently manages $4.0 billion across funds and is actively seeking investment opportunities in early stage and growth stage businesses.

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Saurabh Srivastava has beautifully articulated a set of core recommendations which should go a long way in encouraging the angel and entrepreneurial ecosystem in India. He argues for a thriving MSME sector we need to create a policy environment that would encourage the creation of more seed funds or early stage funds.

Couple of highlights from his post on YourStory.in

- Getting higher equity participation to facilitate better debt-equity mix;
- Encouraging MSMEs to go global and increase their exports;
- Entering into foreign technical collaborations for improving competitiveness.
- The government could have a program on the lines of the highly successful Yozma scheme which was responsible for triggering off early stage funding in Israel, by using some public funds to create more early stage venture funds in the public private model. Similarly, some public funding could be used to help spawn more business angel groups in the country to complete the entrepreneurial ecosystem for nurturing SMEs.Setting up of a separate SME Exchange or platform in an existing Stock Exchange to provide exit route to an angel or venture capital investor, along the lines of AIM, UK.

- Allowing listing of angel/venture capital Funds on the existing Stock Exchanges. This is critical as such funds invest in a seed stage company which is unlikely to be able to go public or be large enough to be acquired in 3 to 5 years. However, the typical portfolio of 15 or 20 investee companies of such a fund would collectively have the required valuation net worth and listing the fund would provide a return to the investors thus encourage more such funds to come up.Besides this there are non-financial issues like liability of an individual Director on the Boards of angel or venture capital Fund which need to be addressed.

To read the complete story, click here.

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One97MobilityFund

The One97 Mobility Fund (OMF) is a $100 million fund set to support entrepreneurs who are making, or are ready to make game changing companies in the mobile ecosystem.

Lead by One97 Communications is a leading full service multi-range VAS firm in India with the best team of employees, customers & investors behind it.

They have already invested in two companies:-

1. Oorja
2.Tencube Pte ltd

Would be happy to provide relevant connects to anyone looking at raising money in this space.

For more information on the fund click here

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Last week I was invited by TiE Delhi to conduct a small workshop for school students on business planning and venture capital. I highlighted how essential it is to translate an idea to paper as one of the first critical steps towards building a comprehensive business plan & vision path for an entrepreneurial venture.

The journey from being a mere idea in one’s head to paper is not an easy one, as it forces the entrepreneur to think with clarity, logic & see the opportunity in its totality. The presentation also covers some of the aspects on venture capital – their objectives, how they invest and more importantly the essential ingredients that go into structuring a business plan.

For the complete presentation click on the link below:-

http://www.slideshare.net/Digbijoy/venture-investing-business-plan

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I have had the privilege of meeting many high potential entrepreneurs from diverse backgrounds and entrepreneurial journeys – yet one of the most universally acclaimed challenge which consistently resonates with all of them is the issue of “Venture Funding”.

“Venture Funding” for a lot of entrepreneurs represents the epitome of entrepreneurial success & defines in their minds the difference between success & failure- The reality however is very different, funding is not the bee all & end all of all entrepreneurial success its merely a step towards faster growth & greater scalability both which can be achieved without funding as well, in fact there are countless examples of entrepreneurs who have boot strapped themselves & have made their ventures successful without any funding!

While most of us have heard investors talk and write about what they look for in a business plan, the focus of this piece is hopefully to give you a more holistic perspective covering both the stakeholders in the funding game i.e. the entrepreneur and the investor.

Venture Funding for you?

The first thing for you as an entrepreneur is to actually understand why you should go in for venture funding & what does it actually hold for your venture:

• Expensive Capital-For an entrepreneur venture funding is one of the most expensive capital out there –Let me illustrate with some data points, for a typical early stage startup, it costs 25-35% of the startup for $1-3 million of investment.  Comparatively, a $ 2 million debt at a 10-15% interest rate, costs $200-300k in interest yearly, much cheaper if you assume the startup will be worth $10 Million in 2 years.  The major challenge faced by most entrepreneurs is that most banks won’t provide $2 Million of debt capital to a young startup entrepreneur. Banks typically look for established entrepreneurs with a proven track record of successful operations backed by stable cash flows before they will even consider evaluating a proposal for debt.

• Higher Returns-The reality of venture funding is that investors participate in this game for getting higher returns on their investment- for them it’s a high risk & high reward business. Investors do not invest in you because of charity or for good will, they may like you as an entrepreneur but more than that they believe in your potential to excute – this is important for entrepreneurs to understand, investors invest in your business and because they believe you have the potential to scale the business which in turn will give them higher returns of course!
• Size- Venture money is right for you, if you are looking to build a big business; Rohit Agarwal CEO techTribe describes a big business as $20 million dollars over 3-5 years and ideally a $100 million dollars business over 5-7 years. In fact more often than not I have heard several investors’ especially international investors crib as to why entrepreneurs just can’t think BIG.  Investors look for big opportunities and are not impressed by a small market opportunity no matter how good the idea may be.
• Exit- Your business can go public or be acquired for a very large amount, remember investors are investing because of returns which can only be achieved with a successful exit.
• Involvement- Venture funding can entail significant involvement from investors on strategic operations of your business and key decisions, as an entrepreneur you need to prepare for a change of mindset from being a single owner who is completely in charge to being a more accountable CEO of the company, the magnitude of change is case to case.

Seeking venture funding essentially means you are looking at a scalable business and are willing to take the necessary steps to grow quickly which include and not limited too a robust infrastructure, high potential talent base, sustainable  processes and structures which are needed to support a scalable business.  Venture funding is quite like a marriage, you need to carefully choose the right partner who matches your overall mindset and vision for your company.

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