No plans to take equity in start-ups: Ravi Narayan

Interview with Director, Microsoft Ventures India

Ravi Narayan, director, Microsoft Ventures India, is busy wooing Indian companies in creating a robust start-up ecosystem. After a tie-up with Reliance in founding GenNext Ventures, Microsoft Ventures recently announced the formation of Innovation for Corporate Initiative (ICI) with an aim to support corporates looking to enhance their engagements with start-ups. In an interview with Shivani Shinde Nadhe, he talks about the need to rope in India Inc. Edited excerpts:

Where does the recent announcement of ICI fit in the corporate engagement that Microsoft wants to focus on?

We have been working with corporates since 2012. With ICI, we now bring a structure to our efforts to bring the corporates and start-ups together. In the past year, we held 10 events to showcase start-ups, from Microsoft Ventures and its partner programme portfolios, to leading companies in the region and around the world. In the first year, this initiative resulted in over 70 deals between start-ups and leading businesses, worldwide. Under ICI, we have three engagement models. Market access programme (MAP) will help enterprise businesses by introducing them to the latest start-up technology offerings, designed to make their growth more efficient. In FY16, we will be hosting various MAP sessions focusing on different business verticals, and partner organisations like Nasscom to bring value to these corporate partners.

Partner in acceleration is a programme where corporates will be allowed to use Microsoft Ventures’ know-how and network to set up their own engagement with start-ups, including accelerator, incubation programmes, deal flows, events, etc. Reliance GenNext falls in this category. The Hi-Po programme will encourage companies to nominate top start-ups for our Scale-Up programme so we can double down on helping high potential start-ups through our combined mentoring and access to markets.

How has the tie-up with Reliance’s GenNext Ventures panned out so far? What is your role?

The tie-up has been a success. We have seen a lot of interesting companies with innovative ideas, especially in the deep technology segment. We came across a number of entrepreneurs who had given up lucrative jobs with the sole idea of building companies that would help India move into the fast lane. Microsoft supports GenNext in working with the entrepreneurs and provides them with the right business and technology mentoring. We look forward to achieving more scale.

Does Reliance have equity in the start-ups it invests in? What is your approach in this regard?

Microsoft Ventures does not hold equity in start-ups. We are a not-for-profit initiative that aims to provide tools, resources, and expertise to enable, so entrepreneurs can ideate, build, and grow their start-ups. GenNext does take a nominal equity in the start-ups, which is a standard practice for accelerators globally.

Is Microsoft Ventures keen on such tie-ups with other enterprises?

Yes, we are in discussions with a few companies.  We shall certainly disclose details once we have something tangible to bring to the table.

What are some of the major milestones for Microsoft before it starts taking equity in start-ups?

As of now, we have no plans to take equity in start-ups. The ventures team is committed to explore and nurture the start-up and innovation ecosystem. Our interest continues to be in identifying potential start-ups, helping them connect with key stakeholders, and eventually preparing them for funding.

Why did Microsoft Venture India shift its focus from early-stage start-ups to later-stage ones?

A key issue we identified at a meet (held during the Think Next last November) was that there was little help available for later-stage start-ups in India. This concurred with similar observations made during the pilot of Accelerator Plus. We noticed that the 10 later-stage start-ups that attended the pilot programme had benefitted significantly and were showing better results – faster. This prompted us to bring in new programmes to help later-stage start-ups.

You tied up with TiE Pune to create a directory for start-ups. Are you in talks around doing the same with the other chapters of TiE in India?

Microsoft Ventures aims to accelerate the start-up system in entire country. We are joining hands with local chapters of TiE and other enablers around the country. We plan to work on multiple projects with TiE Pune. The directory is only  the beginning.