1. R
CHENNAI 2011
24th Nov 2011 @ Chennai Convention Center
Dazzling Entrepreneur in managed HR Services Securing your Data!
Entrepreneurship has no specific path.
M.V. Subramanian (Mani as everyone For Mani, it was not a bed of roses despite initial successes. He says,
calls him), Managing Director and CEO “Our startup experience over the last one and a
“Only after 10 years of being an entrepreneur journey, I found the venture
of Future Focus Infotech, started as a half years was a roller-coaster ride. Sometimes
sustainable.” About the scalability of a business such as managed HR
management trainee with General we felt on top of the world and many times we
services, he observes, “There is large opportunity to scale. IT depends on
Electric in 1987. In 1994, the entrepre- felt so depressed,” thus sums up Pavan Thatha
human resources, and with India IT majors growing at a good clip, this is
neurial bug bit Mani, and he started a on his entrepreneurial experience.
bound to scale. Our service is required during recession and times of
share-broking firm. In 1997, he then growth.”
ventured to create his own brand - The brother duo of Pavan and Rakesh Thatha is
Future Focus Infotech, a strategic IT certainly not the first one in business. Using
Mani is on the Governing Council of TiE Chennai and mentoring entrepre-
and managed HR services company. Rakesh’s research in the area of security, the
neurs excites him,: “It’s an opportunity to learn more about entrepre-
brothers founded ArrayShield in 2010, and
With excellence of services as a premise, Future Focus Infotech has won neurial behaviour from various industries, of varying size and scale. This
developed a path-breaking patent-pending
many awards and recognitions, the latest ones being the Deloitte Fast 50 also helps me consolidate my thoughts and connect the entrepreneurs to
meet the right person for issues they face.” two-factor authentication product. In Pavan’s words, “a simple idea
in India, Deloitte Fast 500 Asia Pacific and Axis Bank- Dun & Bradstreet
shaped into a product capable of solving real-world hacking problems in
Business Gaurav Award
today’s highly networked world”.
ArrayShield provides security against identity theft, a serious issue today
Preserving wealth, Expanding Horizons: It is not surprising that ArrayShield has won innumerable awards and
recognition in its short span of existence with a robust growth trajectory
sustaining the enterprise Private Equity in Real Estate predicted for the future. “Fortunately we have been recognized in multi-
ple forums primarily because of the uniqueness and innovativeness of
by Vishal Jain, Managing Director,Barclays Wealth by Professor Thillai Rajan A, IIT Madras. our technology and product,” admits Pavan.
Venture Capital (VC) and other forms of Private Pavan explains that “initially we identified the low hanging fruits before
The growth of wealth brings for the entrepreneurs the fundamental issue
Equity (PE) play an important role in creating a targeting broader use-cases. One key lesson learned was that spending
– how to ensure progression of the business for the long term. What can
supportive ecosystem for entrepreneurship. At time with customer directly is irreplaceable.” On TiE Chennai’s hand of
we learn that allows the continuity of the family business and values post
IIT Madras, we have been systematically study- help, Pavan says, “The initial days as an entrepreneur are very lonely and
the first generation? As the business grows, entrepreneurs must have a
ing the VCPE industry in India for the last three TiE Chennai has created the right platform for upcoming entrepreneurs to
structure to manage succession, absorb new family members and criteria
years. The outcomes of the research have been reach out to mentors and other entrepreneurs who have gone through the
when a business should be exited.
produced in the form of an annual report series same phases before.”
Indian entrepreneurs need to segregate operating control of the business on the Indian VCPE industry. The 2011 report,
from beneficial ownership, mitigating business and family succession released recently, was focused on the Real Estate
risks. At an appropriate time, entrepreneurs need to move from an entre- sector. I will highlight some findings from this report to indicate how the
preneurial driven, unstructured culture to one dominated by profes- horizons of PE as we know it have expanded in the case of Real Estate Register Now:
sional managers. Management control should rest with professionals investments and what it means for entrepreneurs. The findings are based
[could be family members], as they are able to perform more e ciently. on an analysis of 290 PE deals in Real Estate during 2006 – 2010.
The beneficial ownership continues to rest with the owners, who provide Online: www.tiechennai.org
the vision and connections, and also enjoy the fruits [increase in firm The emergence of Real Estate Call: Ms Latha at 044 6515 4900
valuation] of e cient management.
The incidence of PE investments in Real Estate was virtually unheard of
Email: latha@chennai.tie.org
For this, families can have a separate Family Committee that provides before 2006. However, in the five year period ending 2010, the landscape
vision and direction, and a formal structure to communicate with has altered considerably. There has been an estimated PE investment of
Finding her calling in
management and amongst family members. This will allow entrepre- $17 billion (about Rs. 79,900 crores) in Real Estate during the five year
neurs to build larger institutions. period ending 2010. There were a total of 124 PE funds that were looking
Rural BPO’s
at making investments in the sector, of which 48% are Dedicated Real
As businesses grow, families will also expand and entropy will only Estate PE funds while the remaining 52% are General Purpose funds that
increase. The discontinuity will be di cult to manage if a formal family also make Real Estate investments. The share of Real Estate in the overall
structure is not in place to meet the needs of the next generation. PE investments in India as well as globally, indicates that this sector
Saloni Malhotra once joked that, among the largely
accounts for one third of total PE investments in India. This could partly
grey haired or bald men in the social enterprise
If a younger generation wishes to take over the business, then clear be attributed to the regulatory restrictions that exist in the sector today.
sector, she, a young woman, was not taken
criteria can be defined to determine their eligibility to succeed their Nevertheless, PE has emerged as an important source of funding in this
seriously. After meeting Dr. Ashok Jhunjunwala, the
elders. Succession must also take into account the changing role of sector which has di culties in accessing the conventional institutional
IIT-Madras professor who was fanatic about rural
women and their desire to be involved in the business. The lack of an debt markets.
India’s imminent growth, Saloni’s life took a
appropriate family structure can force a business to close after the first decisive turn. At 23, her only option to convince her
generation itself. Type of investments
physician parents was that she was going to work in
PE Investments in Real Estate can be made either at the level of holding IIT as neither of her parents understood what a rural business meant.
company or directly in the project SPV’s. Our analysis indicates that On her business model, Saloni says, “the key idea we agreed on was
investments in project SPV’s are twice as that of corporate level invest- finding new ways to add income to the rural economy.” Finding huge
ments. A ring fenced financing structure that is more often seen in the attrition among BPO employees who were largely from rural areas, Saloni
infrastructure sector is more becoming common in the real sector as well. hit upon the idea of a rural BPO. DesiCrew was born in 2007. In four years,
This indicates that investors are willing to make investment decisions Saloni has become a mascot of a young entrepreneur bringing decisive
based more on the strength of the individual projects, rather than on just change in the social enterprise sector.
Owners should exit their business if it is not e ciently managed or if it the financial capability of the promoters. In SPV type of investments, exit
is likely to be more phased corresponding to project completion and the This was not without challenges. She had to fight a bitter, nerve-wracking
receives exceptional valuations. A control-and-hold behavior will simply
sale of apartments, rather than by way of IPO or M&A. Thus the pressure battle to take possession of assets that a franchisee took with him after he
not enable success. The cash flows received from the sale of business can
on the entrepreneur to provide a single defining exit moment is consider- exited. Sensing the folly of the franchisee model, Saloni tweaked her
be invested in new initiatives that enable the new generations to invest
ably lesser in real estate as compared to other sectors. business model to establish centres in four locations, three in Tamil Nadu
their skills. We need not throw away the characteristics of the entrepre-
and one in Karnataka. Saloni has finally managed to win the trust of her
neur business – work ethic, perseverance, dedication, flexibility, ability
Penetration to Tier 2 cities employees in making them work at their home towns in villages rather
to deal with diversity, customer focus -- but to blend what has been
than migrate to cities in search of employment.
learned about customer focus and diversity, for example, into a
performance-driven structure. Most of the Real Estate development has been traditionally seen in Tier 1
cities. However, we find that the total PE investment in Tier 2 cities is as With the help of the leadership team, Saloni was well on her way to realize
much as that of Tier 1 cities, indicating that PE investors have been more her vision of a rural BPO, a novel concept when she started it. Rajiv Kuch-
Entrepreneurs have shown their ability to adapt to the changing
forthcoming to support projects beyond the boundaries of Tier 1 cities. hal, an angel investor, RTBI in IIT-Madras headed by Dr. Jhunjunwala and
economic environment and deal positively with the uncertainties in the
Not only do they make investments, but they also make larger invest- Villgro, a social enterprise incubator, o ered her unstinted support. As
market place. It is vital that changes in the family and business structure
ments in Tier 2 cities. DesiCrew scaled up, Ramesh Magnati has joined as the CEO recently.
also match the changing economic environment.
Hail Chennai! About her idea of social entrepreneurship, Saloni says, “Social entrepre-
neurship is about making a positive impact. The idea is to look at business
R
For the curious minded, I would like to highlight an interesting trend with social impact. It’s slightly harder to do.” She is excited to be the
that we observed in Chennai. While Chennai occupies the third slot (the winner of TiE Stree Shakti award this year, which she thinks is special as
CHENNAI 2011 top two being Mumbai and Bangalore) among the six metro cities in terms “the best minds in the country evaluate your idea.”
of PE investment in Real Estate, the average amount of investment per
TiE COIMBATORE –
TiE Chennai Entrepreneur Awards 2011
deal is the highest among all metro cities ($95.33 million in Chennai
versus the overall average of $51.78 million for the six metros). This
new kid on the TiE Block
Event Sponsor probably, is an indication of the project strengths and the resilience of the
sector in Chennai!
TiE Coimbatore is the newest addition to the TiE Global network. TiE
Coimbatore serves the greater Coimbatore region which comprises of
Coimbatore, Tirupur, Erode, Salem, Namakkal & karur , Ooty and polla-
chi districts. Known for its entrepreneurial nature the region has entre-
preneurs from varied industries.
The chapter which was launched in Nov 2010 by Mr. P.K. Agarwal, CEO,
TiE Global and Mr. Ramaraj, Trustee ,TiE Global & Past President, TiE
Chennai. This is the 17th chapter of TiE in india and 56th worldwide and
has 130 members (including 27 Charter Members) and this number keeps
growing! The members are drawn from a broad spectrum of industries
and businesses. Anusha R. Mahesh CEO of park Institutions is the current
president.
“The region has entrepreneurs of all industries of all sizes, small medium
and large, TiE Coimbatore has something to o er for all , we would like to
play an important role in enhancing the Entrepreneurs’ capabilities to
achieve global standards in quality , size , provide ample networking to
take their businesses to the next level, we invite all entrepreneurs to
make use of TiE Coimbatore for their growth. “ said Anusha.R Mahesh
president TiE, Coimbatore. We also have lot of student initiatives to foster
entrepreneurship among the youth, she added. The past year various
programs were conducted on social media, design thinking, Funding,
business model development, importance of networking and innovation
in business etc.
Best Wishes