Corporate honchos like Ratan Tata and Narayana Murthy are not the only ones investing in start-ups. Now, even professionals are smitten. Turning an entrepreneur and the prospect of exiting with crores are the hooks.
Take the case of Nitin Shroff (all names changed on request), a stock analyst working with a well-known research firm, who has invested in some seven start-ups, including uTrade Solutions, Consegna and Charcoal Biryani. He says start-ups give him a sense of ownership and adrenaline rush.
“The idea of investing came when I saw some of my friends and acquaintances leaving high-paying corporate jobs and taking a plunge into entrepreneurship,” Shroff said.
For media professional Ruchir Dewan, his first investment was in 2009 with a ₹5 lakh contribution to his cousin’s endeavour, a Bengaluru-based comic platform called Jump Comics.
Even though Dewan has not made any money from this investment yet, he has invested in more than five start-ups, including an online insurance brokerage and furniture portal.
“My money is still in there. It was a sort of experiment, if you like, in 2009, and I haven't taken my money out as yet. But looking at the sudden growth of start-ups and the usage of technology, I am all for it,” Dewan said.
Like Shroff and Dewan, a number of other professionals are finding start-ups an alternative mode of investment. The trend has picked up with several start-ups looking for such individual investors at the ideation stage where they dilute a small one or two per cent stake for ₹5-10 lakh.
“All of us dream of putting in money into a company that will offer a big pay-off like a lottery, though that’s mostly fantasy,” feels Harish Vyas, a Bollywood script-writer. Vyas has also invested in Charcoal Biryani.
But Nitin Mathur, senior analyst at Societe Generale, said though e-commerce has the potential to be a disruptive force, there are risks that the market is ignoring. “Private investments are high-risk, high-reward and the quantum of investments in the consumer-focussed businesses is a testimony of very high interest of investors, both local and global.”