A Dialogue with Mr. Nagaraja Prakasam

Mr Nagaraja Prakasam is an Angel Investor and Founding Angel at Indian Angel Network since 2011 and has been a partner at Acumen Fund since 2012. He is also the Founder Chairman of Native Angels Network and Advisor/Mentor at NSRCEL, IIM Banglore and CIIE, IIM Ahmedabad. Mr Prakasam holds the position of Board of Director in 12 startups across India. He was the Managing Director for South and Southeast Asia at Aptean (CDC Software Corporation) and also served as the Managing Director of its India operations.

Q. What kind of challenges, as per your observation, are being usually faced by women-led startups?

A. There has been a gradual change in the way women have been doing business. In the past, women were interested in starting their business but did not have the know-how of running one. Then there were some women who took charge of their father’s business but struggled to be accepted as a boss by her employees who were mostly men. However, the current entrepreneurial ecosystem in India provides a lot of opportunities and support to women to start their ventures.

The unique challenges faced by women entrepreneurs are mostly because of the socio-cultural practices. Women are usually kept in a protected environment and this causes lack of confidence in them to take up an initiative. Another observation is that in a husband-wife run startup, it is mostly the husband who controls the business and hardly shares it with his wife.

In our society, men are still not ready to go to the kitchen while women have to look out for options to balance their office-and-home life. A woman told me that she could not start her business in March because her daughter had her board exams then. This continuous juggling between home and desire to run a business is another major issue that married women entrepreneurs go through.

Rest, the challenges for a startup are common irrespective of the gender. For example, a startup’s scalability issues have nothing to do with gender but the business model.

Q. From an investment point of view what are the major points that an investor looks for in a startup?

A. We invest in a company in the form of equity, that is, holding a portion of company’s income. It is different than giving a loan as we need no collateral. We bet on the idea and ability of the startup. Equity investor makes money when the company scales. If the company doesn’t grow, the investor doesn’t get money. Therefore, we look for the scaling-up capacity of a startup and the innovation in its product or service.

For social businesses, equity investors need to have ‘patience capital’ as social startups need more time to grow and solve societal issues. It is more of an impact funding. Also, it is a myth that scaling is quicker in IT companies.

Q. There is a lot of focus on technology startups and it is being said that technology will help in filling the gap between urban areas and villages. What are your views on it?

A. “Technology is a tool. You cannot eat the tool.” A lot of people in India do not have food to eat. By having a telephone can help them to improve certain things but to make fundamental changes we cannot solely depend on technology. Technology is not the only way to solve a problem.

When e-commerce started, people speculated that shops will close down. But it was the other way around. Even e-commerce needs physical spaces as their inventories.

Q. What qualities do you think an entrepreneur should possess? 

A. As an entrepreneur, if you believe in something go ahead with it. Don’t think about what others will think. Most importantly, an entrepreneur should be sensitive enough to her/his surroundings. Don’t be indifferent to the problems around you. Observe the problems as each problem can be an entrepreneurial opportunity. Indian entrepreneurs need to consider the context of the problem and the local resources they have. for example, India’s strength lies in its human resource that can be combined with the technological know-how to solve various issues.

Comments (1)

wonderful post, Dr Naga Prakasam is a genius and a very humble man with lots of insights.

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