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  • 1. R CHENNAI 2011 24th Nov 2011 @ Chennai Convention CenterDazzling 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, andWith 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-pendingmany 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 ideain India, Deloitte Fast 500 Asia Pacific and Axis Bank- Dun & Bradstreet shaped into a product capable of solving real-world hacking problems inBusiness Gaurav Award today’s highly networked world”. ArrayShield provides security against identity theft, a serious issue todayPreserving 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 beforeThe 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 ofwe 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 andthe 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 tostructure 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 thewhen 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 Estaterisks. At an appropriate time, entrepreneurs need to move from an entre- sector. I will highlight some findings from this report to indicate how thepreneurial 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.orgthe vision and connections, and also enjoy the fruits [increase in firm The emergence of Real Estate Call: Ms Latha at 044 6515 4900valuation] of e cient management. The incidence of PE investments in Real Estate was virtually unheard of Email: latha@chennai.tie.orgFor this, families can have a separate Family Committee that provides before 2006. However, in the five year period ending 2010, the landscapevision and direction, and a formal structure to communicate with has altered considerably. There has been an estimated PE investment of Finding her calling inmanagement and amongst family members. This will allow entrepre- $17 billion (about Rs. 79,900 crores) in Real Estate during the five yearneurs 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 RealAs businesses grow, families will also expand and entropy will only Estate PE funds while the remaining 52% are General Purpose funds thatincrease. The discontinuity will be di cult to manage if a formal family also make Real Estate investments. The share of Real Estate in the overallstructure 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 enterpriseIf 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 takencriteria 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, theelders. 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 ruralwomen and their desire to be involved in the business. The lack of an debt markets. India’s imminent growth, Saloni’s life took aappropriate family structure can force a business to close after the first decisive turn. At 23, her only option to convince hergeneration 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-wrackingreceives 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 henot 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 herbe 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 Nadutheir skills. We need not throw away the characteristics of the entrepre- and one in Karnataka. Saloni has finally managed to win the trust of herneur business – work ethic, perseverance, dedication, flexibility, ability Penetration to Tier 2 cities employees in making them work at their home towns in villages ratherto 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 aperformance-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 andeconomic 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. Asmarket 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