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Post investment handling of challenges by VCs and Entrepreneurs by Vipul Mankad

August 12, 2010:  In a session organised by the EVC club, Vipul Mankad, the president of SVCL spoke about the challenges faced by VCs and entrepreneurs post investment.

Mankad who has made early investments worth Rs.600 crore in 51 companies mentioned that resource base and sustained availability of growth capital are the major concerns of companies in the early stages of funding. Venture capitalists involved with a startup can promote the company’s growth by – a) Leveraging their network and experience to help the entrepreneur build an organisation of value b) evolving growth strategies (strategic alliances, organic or inorganic growth) and c) providing an unbiased perspective as an outsider.

Some of the challenges faced by the VCs are to structure the deal so as to provide incentives for growth to the entrepreneur while ensuring returns to the VCs and to align the interests of all the partners and stakeholders in the business. Convertible instruments and clauses on dilution of the VC’s equity are often included in the deal to avoid such problems. Representation of the VCs on the board of the company can foster transparency and promote the growth of the company. Mankad concluded by outlining the exit strategies for venture capitalists such as trade sale of the whole company and selling equity to financial investors.

About Vipul Mankad
An Engineer and an MBA with extensive experience as a venture capitalist, Mankad serves as the President of SIDBI Venture Capital Limited (SVCL) with two venture funds, managing a corpus of over 600 Cr. The first of these funds is the National Fund for Software and IT Industry (NFSIT), which focusses on making investments in Software and IT Companies in India and has made 30 investments encompassing wide range of IT sectors like Software Services, Products Technology, Training, IT Enabled services. The second, "SME Growth Fund" -launched in the year 2004 is a broad based fund focussing to make investments in major Growth Sectors.


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