It’s not very often one comes across a cross-over investor, who has invested in Indian and Singapore startups in equal measure and has seen the startup eco-system grow from ground up. My meeting with Jayesh Parekh was by chance and during echelon 2010, where he was one of the panelists for “Startup Launchpad Session.”
Over two decades, he has started 9 companies, invested in many Singapore-based startups, including iSyndica and Game Ventures and hordes of other Indian startups. He has also worked for IBM in various technical, sales and marketing positions.
I got down to chat with him on his investment philosophy, openness of corporate companies working with startups, and cultural traits of entrepreneurs from Silicon Valley to Singapore. As he is someone who doesn’t mince his words, we sure got some honest insights into this space.
Angel Investment as a profession is not a career option that people aspire to reach. When asked about why he chose to be an angel investor, Jayesh Parekh quite frankly mentions that he is too old to start again on his own.
Jayesh has balanced both corporate and startup career over two decades. 15 years ago, he and his friends set up Sony Entertainment Television, which has grown to be a behemoth in the Indian television space. He has worked in IBM for 13 years, in various departments and roles, and was part of the initial team that restarted IBM sales operations in India from Singapore. He is now on the board of iSyndica and Game Ventures and eBus.
Along with technology startups, he is also the founder of ProPoor, a non-profit portal for NGOs (Non Governmental Organizations) in South Asia, and now a service of CharityFocus.
On MNC’s working with Startups
For the B2B-focused companies, we see good amount of startups working on a b2b model where their potential customers are corporate companies.
Jayesh is of the opinion that MNCs rarely work with startups, in terms of using their solutions. Even if they do, they are exceptions rather than the rule. As stability of a startup is suspect, and startups have resource constraints on providing customer support, corporate companies usually forego their solution for existing large players in the market. The long term maintenance and releases are essential for a software startup, and for this the startups really have to be in the game for long term. He is quick to add, that “unless it’s a new media initiative and involves significant high-tech IP that the MNC’s can leverage upon and license. “
He mentions that there are only three simple question that guide his investment philosophies: Who, What and How
Who: The primary pillar of his investments on which the decision rests –the founders and investors. The focus here is on the startup founder’s credentials, whether he/she has started companies before and what projects they were involved in. That doesn’t mean that Jayesh does not invest in newbie entrepreneurs. Then the lenses through which they are judged are, by their educational qualifications, if they come well referenced and if they’ve worked for a company previously. An iconic and thoroughbred lead investor always helps.
What: The idea in his words should be ‘terrific’. He does not focus only on web or mobile technologies per se, but also invests in lucrative businesses, case in point being Talwalkar – a gym chain in India. He is also keen on social ideas that bring a change to people’s life.
How: Once he is convinced of the idea being terrific, focus is shifted on their execution plans. Then the evaluation is done on the basis of the skills required to execute their plans, and how passionate and operations-savvy they are about their idea.
It doesn’t matter to Jayesh what stage the startup is in, if a good concoction of “who, what and how” come together, he will definitely be interested in investing. But he feels that this combination is hard to find in Singapore or India.
Which is why he loves Silicon Valley, where he has met some of the smartest and brightest entrepreneurs and investors with a great understanding of the market. He finds a dramatic difference between the entrepreneurs and investors in California and those in India and Singapore.
Indian and Singapore Startups
With regards to the Indian scene, he does not find any shortage of entrepreneurs there. Including the trishaw drivers who he finds are very business savvy people. Yet, there is a huge technology gap and he finds a distinct lack of high-tech IP. Most of the startups he finds in India are service-oriented, which he feels is the biggest setback for high-tech angel investors. “It’s incredibly hard to find money, and organizing, setting up and running a business in India can be a nightmare.”
When asked to contrast this with startups from Singapore he mentions that Singapore government agencies have loads of money and are willing to spend it to fund startups. Yet, that’s not enough. He finds that there is a high aversion to take risk here, and people want to stick to what he calls ‘safe’ jobs. There is also lack of high-tech IP and lack of experience among the entrepreneurs here. “Smart people in Singapore always work for the MNCs or the government agencies. It’s tough enough to find the money but it’s even more difficult to find talented people here.”
For building world-class products, one needs a wholesome experience and the wisdom to look into the future. When asked if he sees the situation changing in India or Singapore – he says rather pessimistically, “Not in the near future”.