VENTURE capital is hard to come by in India. But contacts are an even more important currency. “Business is extremely personal here,” says Shailesh Gupta, co-founder of AadhaarUp, a mobile payment start-up offering services for India’s unbanked.
That is why Mr Gupta has signed up with the Global Superangels Forum (GSF), a start-up incubator based in Gurgaon near New Delhi (see picture). In just seven weeks, he was introduced to 75 industry leaders, some of which went on to become AadhaarUp’s customers.
Incubators, long a speciality of the West, are now cropping up in India. They provide fellowships, mentorship programs and start-up contests. They link established firms with young ones. They connect aspiring entrepreneurs. And they often focus on social enterprises.
“You can work as much as you want, but it’s the little titbits mentors offer that help us see aspects of our business that we didn’t see before,” says Kumar Rangarajan, chief executive and founder of Little Eye Labs, which makes tools for software developers and is a member of GSF, too.
Started in fall 2012 by Rajesh Sawhney, a former president of Reliance Entertainment, GSF is a multi-city program and extends beyond India, with partners in London, Silicon Valley and Singapore. So far, it has invested in eight local and eight globally-oriented companies, which includes AadhaarUp, Little Eye Labs and Autowale, a dial-a-rickshaw service to tackle transportation problems in Bangalore.
Unlike other mentorship programs that provide access to big firms, Mr Sawhney is trying a different approach: bringing together more experienced entrepreneurs with GSF’s young fellows. “They’re more connected to the reality of getting a company going than a corporate bigwig,” he explains. He has built a network of 500 such mentors.
To join GSF, a good product idea or basic prototype will suffice. AadhaarUp, for instance, developed two complete products and tested them in seven weeks—a feat that would have taken a year at least without GSF, says Mr Gupta.
Villgro, which caters to social enterprises, is a veteran of India’s growing incubator industry. Founded more than a decade ago, it has mentored 64 start-ups and invested 40m million rupees ($740,000). Its goal is to help firms in the “pioneer gap”, meaning when they are two or three years old and need to reach the next level.
Villgro has also spawned another incubator, called Manji. It is based in Bhubaneswar at the Xavier Institute of Management in Orissa, a state with high rates of rural poverty. Paul Basil, the founder and chief executive of Villgro, also wants to build businesses that have local impact.
In contrast, IDEX Accelerator, a fellowship program started by Bob Pattillo, the founder of Gray Ghost Ventures, a social venture capital firm, is a start-up bootcamp for entrepreneurs from abroad. They stay somewhere in India for six months and work with local social enterprises.
“Social entrepreneurship is sexy right now, but many don’t know why,” says Erika Norwood, program officer at Gray Matters Capital, a foundation created by Mr Pattillo that funds the IDEX Accelerator. If participants after this experience still want to establish their own firms, they receive support from GMC. Explains Ms Norwood: “We want to find the committed ones.”
That is also the goal of GSF’s Mr Sawhney. He wants to see a new group of role models that can lure middle-class Indians, who prefer the security of 9-5 jobs to entrepreneurship. He has already lured three GSF fellows out of college, leaving behind their studies at one of the famed Indian Institutes of Technology for the start-up dream.