IVCA and Deloitte Launch Start-Up Governance Playbook, A Corporate Governance Guide for India’s Start-Up Ecosystem

The Indian Venture and Alternate Capital Association (IVCA), in collaboration with London-based professional services firm Deloitte, has unveiled a framework for corporate governance practices in start-ups.

Launched at Startup Corporate Governance National Conclave, Start-up Governance Playbook is a corporate governance guide for India’s start-up ecosystem developed with insights from founders, investors, and industry experts.

India is now the world’s third-largest hub for start-up and the ecosystem continues to mature at a rapid pace. While founders tend to focus primarily on finding product market fit and winning their first customers during the very early days of their start-up journey, it soon becomes imperative to zero in on another fundamental aspect of company building; corporate governance.

The ‘Start-Up Governance Playbook’ offers a framework of different corporate governance recommendations for new-age companies. The playbook consists of a broad guidance on the governance journey for start-ups from early stage to pre-IPO, a reference guide to help start-ups gauge where they stand on governance, a starter kit with an elementary introduction of governance building blocks, and inputs from those who have already taken their companies to IPO.

"The IVCA has prepared this governance playbook in partnership with Deloitte India to serve as a resource for start-up founders, management teams, investor and board members of start-ups across different stages. We hope this helps serve as a starting point in your journey to craft your corporate governance strategy and policies", said Debasish Mishra, Chief Growth Officer, Deloitte South Asia.

"Through this playbook, we intend to create a space for founders to self assess themselves and know that they are not alone in this journey. With the right intent, business ethics and efficient decision making of an aligned board, Indian start-ups will definitely cross the chasm and create immense value to all stakeholders-investors, customers, government, employees, et al including themselves", said Rajat Tandon, President, IVCA.

The Playbook document offers:

• Broad guidance on the governance journey of a start-up from the earliest stage to pre-IPO
• Insightful and relevant inputs from those who have undertaken the same journey
• A starter kit with an elementary introduction of governance building blocks
• A reference guide to help you gauge where your company stands and relevant governance recommendations

IVCA Launches #VC101 Learning Programme for First-Time Fund Managers

The programme aims to help build an empowered, engaged, and experienced generation of PE/VC fund managers in India.

India’s apex industry body for alternative assets, the Indian Venture and Alternate Capital Association (IVCA), today launched a one-of-a-kind learning and knowledge-sharing programme on fund management - #VC101, for emerging venture fund managers. It is one among several initiatives by IVCA to strengthen the environment for venture capital in India and push India as the leading fund management hub in the world.

In India, the private financing market has emerged as a strong wall of support for the homegrown startup ecosystem. The recent Bain & Co.- IVCA report suggests that Micro VCs (MVCs) became significantly more present across the landscape in 2022 with the base of active MVCs growing from 65 to 80+ over 2021–22. Micro VCs and domestic funds and other small funds (CVCs, family offices, and new funds) also accounted for a salient share of investments in 2022. As more limited partners and family offices look to invest in alternatives viz-a-viz public equity, the sector is on the road to witness an explosion in venture-backed companies. In continuation of this trend and with alternative investment funds growing at an annual rate of 20% over the past decade in India, the meteoric rise of micro-VCs (with an active fund size of less than USD 30 Mn) and first-time fund managers has been inevitable.

"The growth of entrepreneurship in India has been accompanied by the rise of PE-VC, both of which have contributed substantially to the country’s rapid economic progress. IVCA’s #VC101 Series, with sessions led by seasoned venture capital investors, should be of great value to budding venture capitalists in India” said Rajan Anandan, MD, Sequoia India & Southeast Asia, and Surge & Chair, VC Council, IVCA.

The exponential growth of the industry, thus, necessitates proactive attempts to build an empowered, engaged, and experienced class of venture fund managers. Presently, in India, the trend is that most venture funds are led by new, first-time, emerging fund managers who find key activities such as raising capital, networking with limited partners, and building a team challenging in the formative years of the fund. Accordingly, #VC101 is an exclusive learning and development programme curated for first-time fund managers, micro-VCs, and active/new family offices by seasoned fund managers from IVCA’s VC Sector Council Members, who have raised multiple funds, have enabled exits and now wish to give it back to the ecosystem. It will feature sessions by industry veterans - GPs, Knowledge Partners, Limited Partners, Government leads, etc. by equipping emerging players with the knowledge to tackle the unique challenges faced by this alternate asset class. Participants will get the opportunity to receive mentorship from and network with limited partners, leading general partners, family offices, and Government of India officials.

Rahul Khanna, Co-Founder and Managing Partner, Trifecta Capital, and Co-Chair, VC Council, IVCA, remarked, “The process of evaluating and investing may be daunting for new Fund Managers as they are expected to identify and take a call on companies with great potential which also involves significant risk. However, by employing the appropriate strategies, it can be a very disciplined and effective process. The #VC101 programme looks to help Fund Managers build both financial and operational strength. By sharing the best practices in PE-VC investing by seasoned practitioners and industry experts, the programme will accelerate the development and maturation of the venture capital asset class in India.”

#VC101 will be a month-long, on-ground programme spanning three fortnights in the month of June. The programme is divided into three modules with in-person learning sessions in each of the city – Mumbai, Bengaluru and New Delhi. Specifically, the programme will discuss fundraising, formation and portfolio management fund strategy, raising, and firm building; fund setup and deployment; and portfolio management, governance, exits, returns, n+1 fund strategy and much more. The following industry veterans and experts of IVCA’s Venture Capital Council will mentor the participating fund managers: Rajan Anandan (Managing Director, Surge & Sequoia Capital India LLP), Rahul Khanna (Co-Founder and Managing Partner, Trifecta Capital), Manish Kheterpal (Founder & Managing Partner, WaterBridge Ventures), Ruchi Khajanchi (Chief Financial Officer, A91 Partners), Priyanka Chopra (Chief Operating Officer, Managing Partner, Seed Investing, CIIE.CO, IIM Ahmedabad, & Venture Partner, Bharat Innovation Fund), Anil Joshi (Managing Partner, Unicorn India Ventures), Sameer Brij Verma (Managing Director, Nexus Partners), and Sehraj Singh (Managing Director, India, Prosus Ventures).

About IVCA

Indian Venture and Alternate Capital Association (IVCA) is a not-for-profit, apex industry body promoting the alternate capital industry and fostering a vibrant investing ecosystem in India. IVCA is committed to supporting the ecosystem by facilitating advocacy discussions with the Government of India, policymakers, and regulators, resulting in the rise of entrepreneurial activity, innovation, and job creation in India and contributing towards the development of India as a leading fund management hub. IVCA members are the most active domestic and global VCs, PEs, funds for infrastructure, real estate, credit funds, limited partners, investment companies, family offices, corporate VCs, and knowledge partners. These funds invest in emerging companies, venture growth, buyout, special situations, distressed assets, and credit and venture debt, among others.

Reliance's Jio Platforms Raised $4.6 Bn in May, which's 85% of All PE/VC Investment in India

The month of May recorded investments worth $5.4 billion across 58 deals, with $4.6 billion invested in Jio Platforms, according to a report by IVCA-EY.

IVCA (Indian Private Equity and Venture Capital Association), which is India's apex association representing the interests of India's private equity & venture capital industry, together with Ernst & Young has released this report, which is a monthly PE roundup.

If not for Jio Platforms, PE/VC investments would have recorded a fourth straight month of decline, recording just US$791 million in investments, a 72% y-o-y decline and 15% lower than April 2020, the report said.

According to the report, the month of May 2020 saw almost double of Private equity and venture capital investments -- on year on year basis.

It is to be noted that in the first 5 months of 2020 there have been only US$1.5 billion worth of fundraises, 91% of which were raised in the first two months i.e. -- January & February (which is pre Lockdown), compared to US$4.6 billion raised in the same period last year.

[caption id="attachment_146269" align="aligncenter" width="1024"] Source ~ IVCA.in[/caption]

Investments in May 2020 were 92% higher compared to May 2019 (US$2.8 billion) and 5.8 times the value recorded in April 2020 (US$935 million). However, 85% of the investments in May 2020 were due to the Jio Platforms PE deals aggregating US$4.6 billion, said the IVCA-EY report.

From a sector point of view, telecom sector (US$4.6 billion across four deals) emerged as the top sector due to Jio Platforms, followed by life sciences sector (US$354 million across four deals) which includes Carlyle’s buyout of 74% stake in SeQuent Scientific Limited for US$210 million and financial services (US$309 million across 16 deals).

Value of VC Deal in India Grew 5 times in the Last 10 Yrs; $10 Bn Since 2014

The venture capital (VC) market in India is consistently ramping up particularly after Flipkart acquisition by Walmart in May this year. The powdered money investors have got post exiting the homegrown e-commerce giant is now being utilized for investing in new and mid-stage ventures.

Industry body, Indian Venture Capital and Private Equity Association (IVCA), has just released a report and it also reveals that VC industry has matured and the focus has shifted to placing selective bets on fewer investments.

The report, prepared by IVCA and Bain & Company says, "Bigger VCs have accordingly shifted their focus to later-stage investments with many new smaller VCs playing in the Seed/Series A stage," it said.

Venture capital deal value grew 5 times in the last 10 years, with 2017 deal value at $3.4 billion. Overall since 2014, the figure has been pegged at $10 billion, said the report

The exit momentum has also picked up in the last few years with $4 billion worth of exits in 2017. "Going forward, exits are expected to increase in future with 80 per cent of start-up founders expecting investor exits by 2024".

On the start-up ecosystem in the country, the report says India has been recording rapid growth with a number of total start-ups and funded start-ups growing at 30% CAGR.

"Multiple factors have contributed in building this flourishing start-up ecosystem in India. These include access to abundant, high-quality talent, strong underlying macroeconomic growth, holistic ecosystem enablers (like co-working spaces) and a supportive regulatory framework," the report said.

According to a report released two months back by Ernst and Young (EY), private equity/venture capital (PE/VC) investments in Indian startup ecosystem have reached a whopping $8.7 billion in the September quarter, a figure which is significantly higher than what was recorded for the same period last year. The PE/VC investments for the quarter July-September'18 increased from $3.1 billion in the same period last year to a record high $8.7 billion this year. The report highlighted that this sharp increase was largely courtesy the big-ticket transactions that took place over the said period.

Source - Business Standard

IVCA Appoints Rajat Tandon as President

The Indian Private Equity & Venture Capital Association (IVCA) has appointed Mr. Rajat Tandon as its new President. Rajat brings substantial experience from Nasscom both in the start-up and regulatory spheres which are of relevance to IVCA's work. He comes with a tech background and has actively supported the start-up movement in India which is one of the key priorities of the Government.

Gopal Srinivasan, Chairman,IVCA thanked the outgoing President, Arvind Mathur for his work during the last three years. He stated, “We are pleased to bring Rajat Tandon on board. His key priorities will be the continuing promotion of regulatory reform, and deep engagement with the widening member base of IVCA." His past experience (promoting Start-ups at Nasscom) will be of great value to our members and the broader eco-system of venture capital and private equity.

Paddy Sinha, Vice Chairman, welcomed Rajat Tandon on board and said, “Rajat has a terrific opportunity to build the private equity and venture capital eco-system in India. There is a lot to be done to promote primate equity and venture capital and we are sure he will add further momentum to the work of IVCA".

Rajat Tandon, the incoming President said, “I am excited to have the opportunity to serve India's private equity and venture capital community. This is the most exciting field that adds tremendous value to economic development, growth and job creation. I look forward to meeting members and regulators to help achieve further milestones in the development of private equity and venture capital in India".

Prior to IVCA, Rajat was part of the leadership team at NASSCOM, the Indian IT and ITES/BPO body. As Vice President, he lead NASSCOM’s 10,000 Startups initiative, supporting technology startups in India. He is very passionate about creating value for entrepreneurs, funding partners and the ecosystem.

Rajat has had an early stint as an entrepreneur and an extensive corporate experience in the IT & Telecom and Location services. Over the past 25 years, Rajat has worked in various positions, ranging from technical support, sales leadership, service delivery to strategic initiatives at Siemens, Nortel, Nokia (NAVTEQ).

In the startups sector, Rajat is extensively networked, having worked with most leaders in the industry. His knowledge of the industry, its constituents, successes, opportunities and challenges is high. He is also deeply connected with the ecosystem around the industy.

The Indian Private Equity & Venture Capital Association has the goal of developing India’s venture capital, angel capital and private equity markets. It has nearly 120 members, leading domestic and international funds, limited partners and sovereign wealth funds. According to a Mckinsey report, in excess of $120 billion of long-term capital has been provided by these funds to ventures and projects in India in vital sectors such as infrastructure, healthcare, real estate, education, fin-tech, E-commerce and other sectors. In this manner, IVCA members assist the economic development of India, create jobs, foster entrepreneurship and innovation in India.