Journey of Startup FINANCE teams in India | Outsourcing Finance teams to CFOs | (Part I of III)

Context

One of the key points that signify start up having matured is – Finance team, its functioning, leadership and how it collaborates with the CEO and rest of the core team to achieve the desired goals of the startup.  While working with the founders and Constellation team on solving for these questions, there have been some learning that I feel are good to share as a starting point. Each combination of founder and company creates a different circumstance and some parts of learning may need to be customized to suit your startup. Idea of this is not to create a template but only a framework to consider whilst building Finance organization in the company.  The 3 part post starts with how a startup would work with the help of outsourced finance professionals to start with at the time of their seed funding and the successful journey of scaling up of finance teams mimicked with the startup scale up and fund raise.  In this part, I am summarising the recommendations on early stage finance and accounting teams management with some notes on audit and reporting.

Outsourcing of Finance versus in house finance team – my belief

I have always been a firm believer that finance function is a core function and should always be an in-house function.  Having said that, setting up a full-fledged Finance function is a costly affair and has ramifications for the startup.  Setting it in house may be postponed or the set up can definitely be done in stages.  At a time when company has taken on seed funding and is in the mode of setting up a prototype of its product or beta version development, founders should hire a young accounting professional with experience in book keeping (day to day accounting management).  Founders have expressed concerns over the issue that when there are just a dozen coders and company has not even commenced monetizing, it’s waste of money.  Another genuine concern that has been expressed is – who supervises this person and how do we know what is happening is right.  Thirdly, accountants are young and could lack experience and expertise to do their job well and if we have to hire an expert, it’s a costly affair.  Fair point – if there is literally no more work than processing of payroll of a dozen people and a rent cheque to the landlord, I would gladly concede and acknowledge that it’s only fair to outsource the accounting function to a firm that can take care of it in line with a startup environment and not with conventional biz approach.  There are multiple things that need to be taken care of by such a firm.  For example:

processing payroll of the team (Monthly activity),

  1. Salary workings optimized for tax efficiency. While every member will have to suffer taxes, there are ways and means to optimize taxes on salaries on income and this must be borne in mind whilst building salary packages.  If done with proper thought and care, there are smart tax structuring options well within the ambit of the tax laws to ensure that employees earning as high as Rs. 10 lakhs of salary can save over half of the tax to be paid otherwise.
  2. Leave an attendance workings – earlier on there may not be leave policies but if there is any leave policy, accountants should take care of the same whilst disbursing salaries.
  3. Reimbursements – these must ideally be paid by separate transfers over and above agreed salaries as these are not subject to taxes
  4. Employee benefits like PF, ESIC, Gratuity need to be factored for and payments be made to government bank accounts each month. We had a scenario in a portfolio company where it was discovered during the DD that they hadn’t complied with this.  There is never an intent not to comply in most founders.  Just that its slips out.  Delays can be highly costly and can hurt retrospectively.  And these departments are not the most savvy or friendly government departments who will try and help or empathize with startups.  They would generally be pursuing penalty proceedings and issue notices; trust me its not fun dealing with these.
  5. When a new member on the team has joined, there are some basic processes to follow and ensure that their bank account is integrated to seamlessly process payroll, transfer of their PF accounts from old organization to the new, approval for their salaries, performance payout structures, etc should be in place.
  6. Reversal processes need to be carried out when an old employee has left the organization. There was a stray case that I stumbled on how an employee had left the organization and still the salary was being processed.  There are worse things that happen but here the issue was that the employee was refusing to return the excess paid and claimed that he was entitled to the same.
  7. vendor management (server expenses, infrastructure costs, rent, electricity, miscellaneous costs like stationery, reimbursements of costs for employees, credit card payouts for expenses incurred to overseas vendors (all of it may be monthly or quarterly activities). The tricky thing about these is that any disruption in services could have a catastrophic impact on the business.  We all know the story of how a famed service provider missed renewing of their portal name and then had to pay a fancy sum to renew the same.  These are highly embarrassing moments and are easily avoided.  I have been a big advocate of having an online register that carries various vendors and services taken and all of their details including time duration, renewal timelines, commercial terms, key service areas, etc
  8. tax deduction as well as indirect taxes collection

all of the above payouts have to be made with suitable deduction of taxes and indirect taxes payouts when startups are receiving fees.  There is a common belief that we should deduct these taxes amounts and once deducted rather than paying to the government treasure use it for working capital financing.  This is something that should be strictly avoided.  Creditors’, employees’ and regulatory dues should be paid as due and never end up being used as a working capital finance by any company, leave alone startups.

filling tax returns (both income tax and GST as appropriate),sending monthly or quarterly metrics to investors, tracking cash flows so on and so forth.

Now, let us try and understand as to what would be the costs of such a function that us outsourced.

Most third party consultants have charged costs ranging from Rs. 20,000 to Rs. 75,000 per month for these activities in addition to the annual audit that your auditor will carry out and the secretarial services that you will need to obtain from a Company Secretary.  If the fees of external consultants (put together for all of the services) are actually on the lower side of the threshold mentioned above – great.  Please go ahead and appoint them.  Even if these are in the mid range, it sounds to be a fair proposition if the concerned appointee firm has the requisite experience to handle and manage startups.  Do make sure that in such an environment, you have an independent, strong and a highly experienced auditor who carries out reviews quarterly to ensure things are happening the way they should.  Many a times, small practitioners simply offer an entire package of service including audit etc.  If audit function is led by a separate independent team, this approach is fine.  On the other hand, if you are paying any amount greater than Rs. 50,000, it definitely makes a case to appoint an in house person in charge of all of the above.  You may top it up by having a review by an independent third party on a quarterly or monthly basis as needed to ensure that you are always following best practices and have an expert overseeing the accountant.  Further, in compliances, filings, tax and related matters it also makes sense to have a double check and also the side benefit of such a review is that the third party could act as a mentor / guide for the young accountant.  No doubt it always will be a bit costlier to have this kind of a dual structure but the cost differential is not much and will be no greater than an increase of approximately Rs. 2-4 lakhs per anum at max.  Mind you, this cost is well worth it for one big reason.  If the in house person is a sharp young guy (maybe limited prior experience) he would be able to take care of lot of administrative issues as well.  Because (S)he is a full timer and in house, one can also expect that compliances will be done in a timely manner.  The person could also be made responsible for vendor management if he has that kind of an aptitude.  The icing on the cake will be – when there will be a follow up round of funding, company will have a better readiness to handle the due diligence mandated by most institutions.

 USING DSCs and PHYSICAL COPIES OF FILES WITH FOUNDERS /  TRUSTED AIDES

When working with outsourced providers and even junior accountants, it’s a common practice for startup founders to leave their company seals, Digital signatures with these teams.  This needs to be avoided unless the persons enjoy high trust from the founders.  Also, please try and maintain a clear record on who has it and how they would be using it.  Please note that using DSCs, lot of activities, fillings can be carried out and it’s a good idea to make sure that founders set up a process for themselves on how they would like their DSCs to be used / preserved.  On that note, it is also a good practice to ensure that as and when any fillings are carried out, a physical record is initiated and kept in a file that is maintained by the founder.  We have gone through a horrendous experience when we had appointed someone and they claimed they had been filling all things.  Handful of fillings had been missed out and so there was some notice from the government department.  When founder reached out to get access to the papers, the person who was managing this had already left the organization and it took much more time to procure these papers.  Of course, eventually we were able to submit these and there was not much of a fuss but then it was unnecessary waste of time for all of us.

 USE OF TOOLS

There are a handful of outsourced CFO offerings in the market.  Some of them are 1-2 member teams and come with stints with Big 4 or larger companies and are trying to cater to the startup market.  And then there are others who are trying to operate as a full scale organization.  There are certain tools that our portfolio companies have developed which I find very useful for all startups to try out.  For example – GreyHR solutions.  They support the in house as well as the outsourced finance team structures with their solutions for HR, payroll, leave and reimbursement management for employees.

SECRETARIAL SERVICES & COMPLIANCE / RECORDS KEEPING

It is a common practice for early stage companies to update secretarial records only at the time of a follow on round of funding or end of the year at the time of filling year end forms.  There are two issues with this approach:

  1. reporting and fillings under Company law has changed significantly over the period of last 2-3 years and it is no longer easy to get away with late fillings, back dated fillings and a small penalty or charge on ROC platform.
  2. Even if that were to be easy, it is only helpful for young startups to make sure that they have the long term goal of making a sound company out of their startup. This includes governance mechanism, reporting and timely fillings not for the sake of regulatory guidelines but also for the startups own record keeping and reference.
  3. Board meetings are normally just recorded with standard agendas and fillings are done. This should be fine from the regulatory purposes but from a long term startup story tracking point of view, it does not help.  Ideal board meetings should track the startup pivots as well as key milestones and decisions be recorded.  If done well, the minutes of board meetings can be very useful source of reasons and rationales for the decisions taken.

ANNUAL AUDIT

Audit from time immemorial has been treated as a mere formality, a cost burden and hassle.  If done with a larger sense of purpose, this can be a great utility as well as a detection mechanism of any issues in terms of book keeping, revenue recognition, internal controls, accuracy of profit and loss statement and compliance with financial reporting standards.

I have not been very successful in driving this aspect to my team that audit should be done for better than regulatory reasons and more importantly in a time frame that’s better than the regulatory timeline.  If done well, it can be immensely helpful in detecting issues in financial controls, revenue recognition and process weaknesses.  For this goal to be accomplished:

  1. auditors need to be given a freehand to dig deeper into the processes and push the finance team hard to force accuracy in recognition of revenue as well as fallacy in processes. This does pose a challenge at times.  Auditors would then insist that these weaknesses that are discovered need to be reported.  Well, insofar as these are not disclaimers and qualified audit reports, these shouldn’t be discouraged and be worried about.  Provided founders are going to insist to their finance teams that once an issue is discovered cannot be repeated again.
  2. Quality and costs of audit shouldn’t be controlled beyond a point. Its fine to NOT have a Big 4 as an auditor but it definitely isn’t acceptable to have the most affordable auditor who wouldn’t care to dig and guide the company deeper.
  3. It is not critical to appoint a Big 4 auditor. In fact we have come across issues earlier on when there are auditors who find it tough to relate to startup conditions and attempt to apply every rule in the book on the biz.  There are challenges to report unnecessary detail or disclose issues basis over application on the law.  In turn founders should never shy away from this reporting so far as reporting to the shareholders is concerned because that’s fine.

SUMMARY

INSOFAR AS THE COMPANY HAS VERY LOW LEVEL OF ACTIVITY, THEY ARE GOOD TO START WITH AN OUTSOURCED FIRM FOR AN ACCOUNTANT AND AS COSTS AND WORK INCREASE THEY ARE MUCH BETTER TO HIRE A FULL TIME PERSON.  IT ONLY ENHANCES VALUE TO HAVE SUCH A FULL TIME PERSON BE WORKING UNDER REVIEW OF AN EXPERT / MENTOR / FIRM WHO CAN GUIDE THE PERSON ON DAY TO DAY BASIS.

Building a Safe, Inclusive Culture and a Diverse Workplace: Part I

This is the 1st of a 2-part blog series on building culture and fostering diversity and inclusion within the workplace. Before we talk of what sets apart culture of one firm from another, the first box to be ticked is the safety and protection of all employees

Sexual harassment at the workplace is almost as old as time. Specific to India, relatively recent government policy (2013) plus lax law enforcement meant historically most people turned a blind eye or even lived in denial about such issues. The TVF storm earlier this year changed all that

​Well before the ​controversies made headlines, Blume ​had been working on initiatives to help bring standardization and best practices across the portfolio. We started last November with the release of​ an HR Policy Template, meant to help young companies struggling in the absence of a formal HR function/resource. Thereafter​, we recognized that a lot of companies​ would require assistance to fully understand and become compliant with th​e Sexual Harassment (POSH) Act. Since March, we’ve been engaging with several entities to identify partners who could ensure POSH-compliance end to end, at scale, and provide a host of allied services for fast growing companies. A stream of negative news surrounding Uber, TVF, Seedfund, 500 Startups, etc just added ​impetus to our efforts. Sharing here the summary of our learning curve along the way

Apart from the legal requirements, here are 3 good reasons why everyone should be POSH compliant:

  1. Avoid getting your startup/brand bad publicity/fines levied/handle messy escalations that can follow escalations of an untoward incident

  2. Best to not be in an adverse situation at a critical juncture for your company (eg fundraising, major PR initiatives etc) that can stall crucial efforts

  3. Protect your employees (both by way of having a committee in place as well as by the deterring signalling effect of being compliant)

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What is POSH?

The “Sexual Harassment of Women in the Workplace (Prevention, Prohibition and Redressal)”​ or POSH Act was made effective from December 2013 by the Ministry of Women and Child Development with the objective of preventing and protecting women against sexual harassment at the workplace and for the effective redressal of complaints of sexual harassment

Who needs to be complaint?

The law is applicable to all organisations employing more than 10 employees including full-time, part-time, trainees, consultants, interns, contractors and outsourced staff, even if there are no female employees

What is the liability/ penalty is I am NOT compliant?

Companies that do not comply with the law are liable to a penalty ranging from Rs.50,000/- to cancellation of business licences or withdrawal, non-renewal or cancellation of registration

What all is mandatory for compliance?

  1. Formulate a Prevention of Sexual Harassment company policy (and updation when there are amendments to the law)

  2. Appoint an Internal Compliance Committee (ICC) of 3-4 members with at least 50% women and an external member (this acts like a quasi-judicial body)

  3. Display policy/ contact details of all ICC members prominently in the office (so the complainant can reach out to whoever they like)

  4. Provide awareness training and explain the law to ALL employees on what constitutes sexual harassment and forms of redressal (to educate and empower each one)

  5. Train ICC members to handle an incident and inquiries with sensitivity, abiding by the guidelines (members need to know their functions, responsibilities, and how conduct an inquiry into a complaint)

  6. Submit a report to the deputy commissioner every calendar year (customary annual paperwork)

  7. Conduct inquiries via the ICC with requisite documentation within statutory timelines (when a complaint is raised)

OK, so what do I need to do (as a founder)​?

Given all of the above, the best solution is for startups to empanel an entity with necessary expertise (via an annual retainer) who can provide turnkey solutions to ensure all aspects are fully covered. Blume has partnerships in place for our portcos in both BOM and BLR – if you want to learn more or sign up, just give us a shout​. I​t would be fitting to highlight that we deem it imperative for ALL FOUNDERS to attend the employee sensitization and ICC training sessions so as to educate themselves with the latest as well as to signal to their teams that they are serious about employee welfare

Up next, we plan to engage with our founders and learn how they are building their cultures and workplaces, to take best practices from our companies and share with one another – all to enable creation of an ecosystem that others can truly look up to.

SEED ROUND DOCS NEGOTIATIONS – FIRST PRINCIPLES

(This post is not about clauses that need to be negotiated or not negotiated. It just tries to analyse how (and whether) past round documents have an impact on future round document clauses).

….before signing on the dotted line, founders need to have full conviction with regards to an incoming investor that – this is a great team that is backing us and onus is on us as founders to be able to work towards having their vote on our side when it matters. And from an investor's perspective the ideal thought needs to be – we are happy to assign this part of our capital to this startup team led by their founders who are best at what they do and shall always have our vote when needed…

During the course of round structuring and documentation process, it's quite common for advisors acting in good faith guiding the company / founders / investors alike to negotiate with their counter parties that a certain set of rights / provisions should or shouldn't be there in the documents. And the reason they cite for this advocacy or pushback is – it will set a precedent for subsequent rounds investors asking for similar rights or we will be able to hold these to our advantage if we have captured them here. Rarity but once in a while – the advisor be it a not so savvy lawyer or any other person is using this as an simple excuse to get his client to toe his line

With the right INTENT (at the end of the day – it's intent that matters), this is a reasonable argument and should be discussed. To enable a transparent discussion and thought process, I have tried to summarise below our experience during follow on funding rounds (Series A and beyond) by Blume portfolio companies. I have counted experiences of only those follow on rounds that Blume companies have gone through, across both of our funds and where we have not been lead investors in that follow on round. The number of such follow on rounds in the portfolio have been high enough to count as a good sample size in making these observations. The follow on lead investors include a wide range of investors including Indian and foreign financial investors / VCs, strategic investors as well as larger family office (funds) and angel investors.

When an investor is evaluating a company and has nearly made up his mind, he would talk about the commercial terms with the founder(s). Amongst the terms discussed, round size, % stake expected by the investor and his / her cheque size are the most common terms agreed. This means that by and large even valuation is a derived number basis the quantum to be invested by the incoming investor and his expected stake %. For example – if a VC (let's call him Lead VC) is inclined to invest ₹20 Cr in a startup and their desired % stake to be held is 25%, the POST MONEY VALUATION is implied at ₹80 Cr. I repeat – This factors only the amount that will be brought in by Lead VC and his % stake.

Now, if the founder has other existing investors (let's call them Seed round investors) and they have their Pro rata rights to invest at similar terms, founder may get them and dilute over and above the 25% to Lead VC under the same Post money valuation. So if Seed round investors have a pro rata right of 20% of the round they are entitled to contribute upto ₹5 Cr in this round. This makes it a ₹25 Cr round on a valuation of ₹80 Cr post money which results in a dilution of around 30%.

Broadly, let me try and answer the question – how far do previous round agreements shape the subsequent round documentation?

Before I give the short answer, here's the long answer.

There are lot of nuances in structuring these and initially bandwidth of most parties is spent mostly on commercial discussions around round size and dilution. At this juncture no one has actually discussed legal terms nor diligenced the documentation of the previous rounds. Yes, Lead investors may opt for discussions of the past terms agreed but by and large the same comes up at a later point in time.

Another equally important point is that if an incoming investor has a certain set of opening terms at which they want to invest, they will put it in their opening term sheet regardless of past round structures. To hope or expect that they will be considerate and not put out certain terms merely because founders have succeeded in not having it on their seed round documents is a myth. Or even vice versa – in terms of future investors putting some liberal terms favouring existing shareholders just because they have been already captured in their past documents.

The best of investors don't need an excuse of a precedent to act or not act in a certain manner – at least in terms of structuring a legal document. So to have or not have clauses in a particular document is best dictated by the needs of the parties comprising that particular round of funding. While most blue chip investors may endeavour to honour the past commitments, the same may at times not be practicable given the size and shape of company and its cap table are now going through a sea change.

Then why did I admit that this is a reasonable argument in the first part of this write up??

Position explained above holds true for most contractual rights between investors and founders as shareholders like ROFR, Tag, Exit, Vesting etc.

Discussions and intent to act becomes crucial when it comes to commercial rights like valuation adjustments or bump up or penal factors leading to share price change due to some events, or clauses that draw out relationship between founders, affirmative rights, right to drag along etc.

Here it becomes critical to discuss threadbare and document with caution not because it becomes a precedent or you will succeed in creating a situation to your advantage. But largely because – the above rights would be those where an incoming investor may have a view and sometimes if the company doesn't need to raise capital soon, it is these set of rights that will pretty much drive the relationships of various sets of shareholders (founders amongst themselves or investors vis a vis founders or investor inter se). How to structure these rights is a separate topic and requires a post which I will work towards and soon post.

The limited point of this short note is to just highlight the point that discussions and negotiation during any round of funding should be driven by needs of the Parties to the document. It's important to set the right precedents early but to have fear of precedents as a guiding post for structuring a relationship amongst people who are ideally expected to work in the same direction, is a bit of a stretch.

Past round documentation gets over ridden during subsequent fund raises anyway. The intent is that – all privileges and obligations of earlier round investors would also get restated in a fresh document which is also going to contain the rights and privileges of the newer investors. So that there should only exist one document that guides all shareholders. Besides it is also a common practice that as larger round investors set in, rights of investors or prior rounds do suffer some dilution but not when it comes to their ability to get an exit, dividends, M&A, liquidation preference on a waterfall basis, etc. Some privilege like affirmative rights, right to appoint board directors and a few others are reserved only for investor shareholders with a certain % of shareholding or clout on the cap table.

In such circumstances, just because the older version of documentation has a right or doesn't have may not make a big difference. If company has diluted in favour of some HNI who doesn't have much of a track record as an angel investor or a quasi strategic investor with certain vested privileges – due care needs to be taken in offering certain category of rights. Reason being – at the time of future rounds, founders need their consent and if these shareholders choose not to cooperate with founders at such occasions, it could easily become an opportunity loss.

Every stage at which the company raises capital is different. Investors coming in at each stage have a different role to play and even different time horizons and return expectations which lead them to make an investment in the company. Pricing is a function of the perceived risk that the company in question poses. Therefore, rights and obligations also should be function of these factors and depend from the nature of investors who are going to hold the right and their track record in such situations in the past.

So while it's not real that investors won't have rights and restrictions – but the best Founders should see to it that rights and privileges are in hands of 1-2 responsible hands (certainly not across a fragmented group) and that there is a fair mechanism laid down on how and when these get exercised such that it is binding on all. You don't need litigation after having built a nice company and at the time of the exit or the M&A.

At the end of the day, before signing on the dotted line, founders need to have full conviction with regards to an incoming investor that – this is a great team that is backing us and onus is on us as founders to be able to work towards having their vote on our side when it matters. And from an investor's perspective the ideal thought needs to be – we are happy to assign this part of our capital to this startup team led by their founders who are best at what they do and shall always have our vote when needed.

If all parties have this representation in their documentation on a best effort basis – guess negotiations will be easier if not extinct.

Managing Angel Tax Issues – Clarifications on Tax on Share Premium in the hands of Start ups

A.   Context

When any startup raises money from an equity investor, legally they have attributed a much higher value to the company's shares when allotting the deserving stake to the investors.  Quite a few companies in the portfolio and beyond have had inquiries from the Income Tax Dept (IT) when they issues shares at fancy premiums to investors.  There is nothing wrong in this practice though the IT is trying to go after such cases because there is a provision in the IT Act that allows them do so.  That said, there are some legally provided exceptions and this post intends to just state the obvious with relevant background.

B.   The provision that lays down the tax (not the exact language)

Section 56(2)(viib) of IT Act – where a company receives from any person being a resident, any consideration for issue of shares that exceeds the face value as well as fair market value (FMV) of such shares, the excess over and above such FMV shall be counted as the Income of the company and company shall be liable to pay tax on the same as applicable.

C.   Implications of the above in Para B

Suppose the start up raises Rs. 5 Cr at a valuation of Rs. 20 Cr.  Definitely the shares will be allotted to the investors at a price above their respective par value which could be Re.1 per share or Rs.10 or Rs. 100 per share or whatever the amount be.  At this juncture the onus is on the start to ensure that the 'share price per share' at which they have allotted the shares to the incoming investor(s) are at a price that is lower or equivalent to the FMV.  Suppose the FMV is Rs. 50,000 and shares have been allotted at Rs. 50,000 per share so that the valuation comes to Rs. 20 Cr at an aggregate enterprise level..

in such a case, there shall be ZERO income.  However for some reason, the FMV was certified at only Rs. 10,000 as against Rs. 50,000.  Then Rs. 40,000 per share would be the tax.  This when multiplied by number of shares issued and allotted may come to an astronomical number of Rs. 4 Cr in the current case.  In such a case, the start up will be obliged to pay tax @ 30% on 4 Cr – ie Rs. 1.2 Cr.

D.   Carve outs / Circumstances in which above tax shall not be levied

The following are the 3 specific circumstances where the above tax shall not be payable:

1.   Where money has been received from a NON RESIDENT investor regardless of the quantum of the premium – it wont be subject to taxation under this provision

2.   Where the FMV of the shares of the company has been greater or equal to the price at which the investor has been allotted shares, there is no tax payable

3.  The capital has been received from a domestic entity that operates as a SEBI registered Fund.  There are some Terms and conditions to be complied by the Fund here to ensure that the company in which they invest can get the benefit of this exemptions

This means where  start ups that have taken capital from non resident investors (non resident as defined under Income Tax law) or raised it from a SEBI registered fund or the investment from their domestic investors is at a price lower or equal to certified FMV are out of the scope of this tax.

E.  Certified FMV

If investment is coming into a company from parties other than the above (ie from Indian resident persons including corporate, individuals or firms) a certified valuation certificate report should ideally help justify the FMV of the company.  What constitutes FMV or the method of arriving at FMV is not prescribed in great detail.  Per se, the intent of the law is to ensure that unscrupulous money invested to siphon off taxes.  The spirit of the law should ideally be counted as well adhered to if, a start gets it valuation for FMV certified from a Chartered Accountant in practice for over 10 years using DCF (Discounted Cash Flow) method along with a note that details out the assumptions made to arrive at the value along with a rationale for the assumptions.

F.   So whats the problem then

In case of quite a few start ups, Tax department has been reaching out and attempting to tax or taxing companies for this premium.  If companies are covered by the above exemption, the tax department shouldn't go after and tax these share premiums.  The advisors / CFO of the cos should be able to represent the case in the light of the above.  There will hardly be a case where the inspite the above exemptions applicable the assessing officer will win the case against the company.

Besides, there are also instances where the tax officers are challenging the valuation report.  The rationale behind the same is – the certified valuation report is not realistic.  It is interesting to note why they are doing that.  Valuation reports are drawn up basis a projection of next 4-6 years.  The assessments of Income Tax happen sometimes good 2 years after the end of the year and if the Scrutiny is going on, 3-4 years post the end of the year.  By then the company would have actual data of the projections for the period for which earlier projections were drawn.  In most start ups (including some that are doing well), the revenue numbers are off and therefore even profits are far away.  There are genuine reasons for the same but the officer is reluctant to accept or acknowledge these.  He therefore ends up challenging the valuation report's authenticity and sets aside the report.

G.   That said..

There are a few cases where inspite of applicable exemptions and representations the same have been attempted to be taxed and orders have been passed refusing the exemption.  On top of it, there have also been a freak case or two where penal proceedings have been carried out saying that the amount has been withheld by the company to circumvent tax.  These type of cases may win at the appellate levels and even CIT (Commissioner of Income Tax) levels if company and its advisors are convinced that they have complied with all of their obligations under the law.

And this is not a very complex matter to represent and advisors typically shouldn't charge much.  But the implications of not doing it or losing out the battle are huge.  So please do take this seriously and sort it out with competent advice on this.

(Blume portfolio cos may reach out to shriya@contellationblu.com for further help and queries on addressing this issue.  She has put up a detailed clarification letter for IT department for the portfolio cos)

Part 1: Journey to Jakarta Chronicling a visit of Blume and our founders, exploring the South-East Asia tech ecosystem

Selamat Datang!

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In Jakarta with Tim Draper, Gabe Turner (of Draper Venture Network) & visiting Blumiers!

This warm welcome that greets you the minute you arrive in Jakarta is at once genuine and infectious.  Just like India, it makes visitors immediately feel at ease and indeed, welcome!

A special thanks here to our hosts, the Draper Venture Network (DVN), Wavemaker Ventures and also Sudhir Syal of BMS Indonesia, who gave us an opportunity to engage more deeply with the South-East Asia tech ecosystem.

In a course of a week – our inaugural trip to Jakarta – we interacted with peer VCs, start-up founders, and early to mid-stage investors from different corners of Asia.  A key highlight was meeting Indonesia’s largest internet unicorns like GO-JEK and Tokopedia, and hearing their growth stories, the challenges they face, and where they’re headed.

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GO-JEKs everywhere! Logistics a huge opportunity.

This blog post chronicles key learnings and observations from Jakarta, preceded by a trip (amongst many earlier visits) to Singapore.  This trip follows on the heels of our inaugural, larger China trip that the Blume core team and a much larger contingent of both Blume founders (as well others) made earlier this spring.

Our “Journey to Jakarta” culminated in an evening fireside chat with Tim Draper (founder of Draper Associates, Draper University and DVN), bringing together the Indonesian ecosystem along with a number of visitors from Singapore, Japan and China.

Accompanying Blume on this trip were 6 of our portfolio companies:

We met different actors on the Indonesian (and Singaporean) start-up ecosystem stage:

Outlined in these next few sections are an account from the eyes of one Indian VC and also from our founders, exploring first-hand the ecosystem and sharing on-the-ground observations and learnings from this very important South-East Asian market – the third largest in Asia outside China and India, and an anchor for expansion beyond the Strait of Malacca.

Please join us on this journey as we dive deep into the South-East Asian tech ecosystem. We welcome your feedback and thoughts.

Sanjay Nath
Managing Partner
Blume Ventures

Final Infographic

 

South-East Asia (SEA) – from the eyes of an Indian VC and founders

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With traffic 3x that of India, LOGISTICS, a huge pain point = opportunity!

Nishith Rastogi, Locus

Jakarta

  • Manila, Jakarta, Singapore, Ho Chi Minh City, Bangkok and Kuala Lumpur are six key cities of SEA representing a combined 2.4x volume of users than entire India, who transact online. Each city is broadly less than two hours (less than a Delhi-Mumbai flight) apart.
  • Thinking of SEA as one large country with six metros makes it an attractive target.
  • Jakarta, contrary to what one may feel due to its heavy traffic conditions, has one of the highest percentages of organised retail (80%) compared to anywhere else in the world.
  • In Jakarta, interestingly, e-commerce and fulfilment are not linked at all, unlike in India where Flipkart, Amazon, Myntra, BigBasket all have own in house captive logistics fleets. Tokopedia is an example of a notable e-commerce unicorn – it relies solely on third party logistics (= the opportunity)
  • Jakarta as a city of 12-15 Mln itself, is a sizeable domestic market as well.

Singapore

  • Singapore is like clockwork (not surprisingly, these exact same words are echoed again and again). One can easily do eight different face-to-face meetings in downtown within the same day.
  • Is a small domestic market, but a big reference market like Dubai (important for a founder expanding into SE Asia when he/she is asked “do you have any kind of presence in / linkages to Singapore?)
  • Is similar to Tokyo, in two aspects – a) internal processes and b) secondly, the value of real estate. For example, Uber exists but isn’t particularly huge in either market, as both existing public transport and cab systems are efficient. Similarly, these countries have supermarkets stocked with folding racks, which allows clever ways of maximising space utilisation.

 

Shachin Bharadwaj, Sminq

Singapore

  • Super-efficient country that works by the clock. “I was able to do six meetings in a day (across the city) and could make it on time for each place (traffic, parking, lifts, everything is aligned to reduce friction) – with time to spare!”
  • The government is pushing entrepreneurship in a substantial way. I was told that for every $ invested as foreign direct investment (FDI) in Singapore, the government will back it with $4 (off-course T&C apply).
  • The ease of doing business is amongst the best in the world.
  • People here are willing to pay for convenience. So, you don’t have to worry about “free deliveries” (i.e. the impact on your margins as a startup founder)
  • Local cabs and GrabTaxi are more loved than Uber – “I personally got very attractive deals on Uber (hence, only used that), but Grab and others were running well even without the subsidized coupons”.
  • For startups, Singapore is a great place to be located to attract capital, with the advantage of IP protection, tax benefits (with Govt leverage) and so on.

 Jakarta

  • You need to understand and speak Bahasa to do business with locals.
  • Post GO-JEK, it seems that Indonesia as a market has been “suddenly” discovered by VCs.
  • The government and VCs want businesses to be set up here and are very welcoming with money and any help, to get things started
  • Cost of living is very reasonable [“I found many daily use items cheaper than India (eg Pune)].
  • Public transport is broken (hence Go-JEK and others) and Jakarta has a daily floating population of 2-3 mln who travel in and out of the city every day for work. Once again, an opportunity for logistics.

 

Shivkumar Ganesan, Exotel

  • While companies in South-East Asia have a general idea on some start-up brands in India, the awareness levels are low. This means that many of us have to approach these countries as though we are starting from scratch (“on the flip side, once you’re in, switching costs are higher and you can establishe and maintain mindshare”).
  • There is a need to establish credibility and trust apart from proposing value. If you are already working with large brands in India, that certainly helps to hit the ground running.

 

Mausmi Ambastha, Threadsol

Indonesia: 

  • People are technically aware and there are a lot of expats in positions of leadeship and influence from South-East Asian countries.
  • The expat community is strong and helpful, if you approach them well.
  • The laws are fluid and keep changing very often. You need to mandatorily use a consultant who can guide you through the maze of paperwork and laws that may seem confusing.
  • Visa norms are very strict for Indian passports. If you travel for business or leisure often, more than 3-4 times, they do not give you a visa.  You can get a long-term visa if a company in Indonesia invites or sponsors your visit. More than a letter, the company has to take responsibility and submit documents to the Ministry of External Affairs in Indonesia and only then the Indian Embassy awards a visa.
  • Digitization process of government agencies is not yet in place, so a lot of work is still done on paper.
  • All the paperwork in Indonesia is done in the local language, Bahasa.
  • Hiring and firing norms are pretty strict.

Singapore:

  • You can do multiple meetings in a day and metro is the easiest mode of transportation.
  • The corporate banking sector has solutions for all. However, you need to have a big ticket to get preferred banking services.
  • The personal banking sector is a lot more painful and difficult. It’s not as easy and simple as it is in India.
  • The city is very safe for women and the implementation of laws are very strict.  Its one of the safest cities in the world, likely THE safest.

 

Dr Zainul Charbiwala, Tricog

Singapore:

  • Very expensive to get anything done, but when it gets done, it is quick.
  • Very easy to do meetings there. In the two days I was there, each meeting ran on time and that were 10 of them spread over the city. Since there is no traffic, getting from once place to another is a breeze.
  • Because it’s a small market, if you sell anything to Singapore, it doesn’t count for much. This is a primary reason why many of the convenience services that we take for granted just don’t exist there, like BigBasket, 1MG.
  • The healthcare space is highly regulated and in the hands of a few large players. Getting into those markets is hard but possible with the right connections.
  • Living costs for one person in the country is about 150,000 USD per annum. Getting permanent residence is not an easy task but again, if you have the right contacts, it gets done quickly.
  • The Economic Development Board (EDB) in Singapore is the leading government agency for business activities. Their mandate is to do more business and encourage employment in the country instead of getting people from outside. Getting experts from outside is fine.
  • Tax and IP advantages are big advantages pulling startups to Singapore.

 

Jakarta/Indonesia:

  • Indonesia is just like India, in almost every aspect.
  • Their smartphone penetration is higher than India.
  • Because of a large market size and opportunity, a lot of Indian companies and startups are considering opening centres there.
  • I spoke to a few people about what it takes to do business in Indonesia. First, it has to be co-owned with an Indonesian national, so a joint venture (JV) is probably the best entry point. Second, you need to hire a minimum of 5 people to start a business – a country manager, an accounts person, an operations manager and two sales people. The first three can be expats but the sales professionals must be local.
  • The above formula is pretty much the only formula that has been known to work for external companies trying to set up businesses there.
  • The country as a whole lacks tech expertise. Tokopedia, one of the largest e-commerce players there has the CTO and tech team brought in from Indian startups (Paytm, etc). Similarly, GO-JEK has a fairly large development team in Bangalore.
  • Setting up a business there and running it is just as hard, if not harder than India. Their land mass is spread out over 17,000 islands which makes logistics a nightmare. Much of the logistical activity gravitates towards Jakarta and the other larger cities.
  • “Tech people are treated at the top of totem pole – so all you CTOs aspiring for a leadership position and an interest in SE Asia, consider migrating!”

 

Prashant Dixit, Dataweave

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Traffic 3x worse than Bangalore

 

  • Jakarta – City with nightmarish traffic and friendly people. Relationship selling is key to set a foothold in this market.
  • I see Indonesia as a land of immense opportunities primarily driven by domestic consumption.
  • The use of technology is evolving and I see a lot of potential for SaaS based companies.
  • I had some good interactions with the likes of Tokopedia, Blibli, Zilingo and others. The DVN event, the informal mixer for Blume founders hosted by Sudhir Syal (of BookMyShow Indonesia – thanks Sudhir!) helped me in building some good connects. A lot of investment is flowing into Indonesia and this could be the next big land of opportunities.
  • Overall the trip was quite fruitful and I believe we should have more of these events.

 

Sanjay Nath, Blume Ventures

“When most founders think of expanding into South-East Asia, they usually think of Singapore. Founders should tap the capital and network effect strengths of Singapore, at the same time venturing out into Indonesia and accompanying regions, both via direct sales and strategic partnerships.  The real growth is out there – think of Singapore as a beachhead, a launching pad…. to go out and penetrate the surrounding frontier markets”.

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Singapore, with a population of just 5-6 mln, is actually more a “mothership”, the key node in a hub-and-spoke network for the broad SEA region.  It is a rich capital and network base that houses the Asia Pacific region’s largest corporate headquarters, banks, corporate entities and investors. Moreover it is also a business and tax-friendly, IP innovation-led hub; but a very small market in and of itself (and a high cost base for startups).  The real growth then is in the adjacent “frontier markets” surrounding Singapore.  On this particular visit, we dove into Indonesia, the largest of the ASEAN countries.

I’d advise founders to understand and recognize the relative benefits of each region before embarking on their expansion plans. At a fast growing population of 225 mln and counting, Indonesia represents a lower cost, not-to-ignore market opportunity for Indian founders targeting SE Asia as a serious expansion outpost”.  In Part 2 of this blogpost, we’ll discuss the backgrounds of some of the local VCs and leading unicorn founders, areas of success they’ve found so far, and uncover potential synergies between India and Indonesia, two of the largest Asian internet economies [outside China].

SUMMARY

  • With a population of 250 mln and a staggering 200 mln mobile non smartphones with active data, Indonesia represents a massive mobile-first opportunity. Half of Indonesia, around 130 mln, are internet users with ~ 94 mln smartphone users
  • The evolution of the Internet leaders’ B2C and C2C marketplaces has been quite sophisticated.  Their strategy to dominate and capture market share has been driven by building trusted and transparent platforms, and around perfecting customer adoption and satisfaction. Some instances
  1. All mobile-first, smartphone-first strategies
  2. Driving stickiness – comes from a variety of tactics including strategic promotions – “99% off” or “free shipping up to 30,000 IDR [Indonesian Rupiah]”
  3. An emphasis on “Education Seller Programs”
  4. Ability to compete comes from their ability to grow both the base of sellers and SKUs
  • The angel and VC ecosystem is small and fairly close knit.  Many VCs have a Chinese/Japanese heritage and also LP bases.  Most early stage VCs invest from seed, angel and through A rounds, and some also have on-the-ground incubator/spaces to house and co-locate startups
  • The cost of living and doing business is fairly reasonable, with many daily use FMCG items cheaper than even India; explaining why startups and VCs often have their HQ in Singapore, but keep their larger teams and ops in Jakarta
  • Investor interest in India is driven both by B2C and in the case of B2B, “taking India to Indonesia markets” [more on this in Part 2 of the blog next month]

 

Note: This blog post is based on our personal observations and supported with data wherever possible. Part II of this blog post will delve further into South-East Asia’s tech ecosystem and also explore the synergies between India and Indonesia.

To dos for Founders wishing to raise Foreign Capital (Part 1 of 2) – FCGPR Compliance and issues around it

Background

A significant quantum of capital fuelling startups is from overseas sources through the Foreign Direct Investment (FDI) route.  When a company obtains capital through the FDI route, several compliances under the Foreign Exchange Management Act, 1999 (FEMA) become critical and failure to do so may lead to heavy penalties.  FEMA consists of Regulations issued by the RBI from time-to-time.  This post (including Part II of this series) is intended to achieve the following:

  1. Give early stage founders a high level overview of FCGPR and related compliances to be carried out post receiving investment by way of FDI in their companies (Part 1 of 2 being covered herein below)
  2. Issues and challenges we (Blume portfolio cos and Blume per se) have faced with possible solutions to avoid problems with the filing process (Part 2 of 2)

FC-GPR Stands for Foreign Collaboration – General Permission Route

Meaning of FDI – Foreign Direct Investment – means investment by a person / entity that is resident outside India in an Indian company.  The instruments which are considered for FDI are as follows:

(a) Equity Shares

(b) Compulsorily Convertible Preference Shares (CCPS)

(c) Compulsorily Convertible Debentures (CCDs).

(d) Warrants and Partly paid-up shares – However, these require the prior permission of the FIPB.

Shares and convertible instruments to incoming investors have to be issued at a price NO lesser than fair value of shares determined by a SEBI registered Merchant Banker or a Practicing Chartered Accountant (“PCA”) as per any Internationally Accepted Pricing Methodology in the case of unlisted companies.  Upon receiving the capital, the Company will need to give a letter of declaration stating the following alongside the Form FC- GPR:

(a)The price/conversion formula of convertible capital instruments should be determined  upfront at the time of issue of the instruments.

(b) The price at the time of conversion should not in any case be lower than the fair value worked out, at the time of issuance of such instruments, in accordance with the FEMA regulations.

Reporting / Advance Reporting

(a) All the FDI reporting need to be done through www.ebiz.gov.in portal.

(b) Company will require to register before the above-mentioned portal for intimating the RBI for receipt of FDI.

(c) On receipt of the funds from the foreign investor, the Company will be required to file Advance Reporting before RBI within 30 days of the receipt.

(d) While filing of an Advance reporting before the RBI, Annexure VI with KYC of remitter and FIRC certificate needs to be filed (Advance Reporting form)

The following are the key stakeholders in the FC-GPR process:

  1. Authorized Dealer (“AD”) (Recipient Bank ):

AD bank is a regular scheduled bank with whom we operate and maintain our regular current and saving account for day to day transactions.

Role of AD:

  • Acts as a liaising entity between the Company and RBI
  • All the forms (i.e. Advance Reporting and Form FC-GPR) will be vetted by AD before forwarding to the RBI for their confirmation.
  • Any communication with RBI needs to be routed through AD only.
  • In exceptional cases, RBI will request the Company to revert directly whilst keeping AD on cc on these email exchanges.
  • To intimate to the Company for receipt of foreign fund in their account and sharing necessary paper work before crediting the amount in to the Company’s account.

(Note: some of the above may defer  fromBank to Bank)

2.     Company Secretary ( For Issuance of CS Certificate) :

Practicing Company Secretary is required to certify the following with form FC-GPR:

  • While doing an Allotment to foreign national / entity the Company has complied with all regulations applicable under the Companies Act, 2013
  • Company is eligible to issue the shares under the FEMA regulations
  • Company has complied with all applicable FEMA regulations.

In nutshell, CS certificate validates that the Company’s allotment is under the compliances of all the applicable laws

3.     SEBI registered Merchant Banker or a Chartered Accountant ( For issuance of Valuation Report)

A valuation report shall be required to be filed before the RBI.  This shares that are to be allotted to the investor shall be at a price that is NOT lower than the valuation accorded by the valuer.  The valuer may choose to adopt any internationally accepted methodology whilst arriving at the valuation and furnish a report.

4.     RBI ( Final Regulatory authority)

Advance Reporting and Form FCGPR – On receipt of Advance reporting form from the AD bank, RBI scans through the application and issue the Unique Identification Number (UIN) to the transaction.

On receipt of form FC-GPR and other supporting documents, RBI scans through all the documents and issues the acknowledgment letter to the Company.

RBI may usually take upto a period of 30 days in issuing the acknowledgment letter to the Company if the application is in order and RBI doesn’t have any objections / concerns on the form filed.

Recommendation and Quick Summary to all the Start –ups Company:

Sr.No Particulars Timeline
a) On receipt of FDI, follow up with AD bank for KYC and FIRC copy and start preparing the documentations for Advance Reporting. T + 30
b) On filing of Advance Reporting before the e-biz portal follow up with AD bank for UIN. After completion of 7 days of filings.
c) On completion of allotment file the form FC-GPR before the e-biz portal

(Company is not required to wait for UIN while filing of Form FC-GPR before the RBI on completion of allotment)

T +30
d) After filing of form FC-GPR do follow up with AD bank for the acknowledgment copy. After completion of 10 days of filings.

In the next piece, will take help of Constellation team and will narrate with a list of key issues that we have faced on FCGPR with their implications and possible ways to avoid these.  Stay tuned 🙂

PS – Jointly written in collaboration with Latesh Shah of Constellation Blu (latesh@contellationblu.com).  Readers interested to learn more about this could reach out to this email id with your questions and Latesh and / or I are happy to organize a concall for all interested on this topic

FOCUS!

I first heard it as we passed a Buddhist temple en route to the Forbidden Palace in Beijing. The guide was a very talkative cherubic lady, named Ta-ta. She was well informed about most things Indian, including her namesake Ratan. And amongst various statistics and facts that she rolled out, she mentioned that a little over 90% of Chinese don’t have a religion. The others are split between Taoism, Buddhism, Islam, Christianity and even Maoism. Most of the atheists do go to pray – largely at Buddhist temples – when they are afraid or need hope – exams, relationships, and business success but there is no doctrine that guides them in the name of one religion or the other.

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[It’s the second time in a year that I had heard the shunning of religion by a rebooted economy. The last was in Estonia, where similarly, Signe, a friendly startup evangelist had a meal with my family over summer. She said young Estonians didn’t see how religion helped at all, when the Russians ruled them – it seemed futile to them. The only religion they wanted to have was ‘enterprise’. A segment of young Estonians actually think software is the way for them to make a dent in the world – and their role models are emerging – I’m predicting that they will continue to create many more beyond the clichéd Skype example. 

The significant difference is of course size! Estonia has all of 1.3 million people, a good chunk of them in the capital Tallinn whereas China is India plus some more]

Then, I heard it again and then a third time in Shanghai – the 90%+ (statistic) of the population who cited no religious preference. Coupled with this was the oft-repeated and fabled work ethic of the average Chinese – we had witnessed it even back in India – day of the week and time of the day have no boundaries for them – they are ever-ready to take a meeting that furthers business.

And then, that Sunday afternoon bus ride in Shanghai suddenly built on this theme. I said it aloud to a few of my fellow India tech-trekkers over a bus ride or two and it became very clear suddenly!

The single-minded purpose and FOCUS towards income generation, wealth creation, prosperity, quality of life – all as a surrogate to achieving “happiness” is the core driver of the nation.

It’s much easier when one is stripped off of all “distractions”. And that’s what the Chinese have gradually moved towards.  Here you go:

(The word “No” below is intended for dramatic effect and not for debate on what is the scale and % of each of the deviances from “No”)

–       No religion – they’ve just make it redundant and irrelevant at scale

–       No politics – at least not of the divisive kind – the people have ceded control to the state, even more over the past 25-30 years, the tradeoff between democracy and the state delivering the promised improvements in quality of life seems like a compromise that the Chinese have (somewhat) happily made. As someone put it, they’ve learnt to trust the single party government to take care of their well being as a people.

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–       No organized crime and limited or reducing petty crime / corruption – fear of the government and its scrutiny keeps them at check

–       No Bollywood or other such ‘woods – film-making is driven by a cultural or political agenda or simple action stuff or import of foreign films without an agenda. There is not much need or room for silly romancing or silly ideals.

–       No cricket – I’m simplifying the notion to contrast it with a nation obsessed by cricket. India has many other emerging sporting passions and the Chinese follow international sport and play to win in many others but there is no comparison in how many man-days we would spend/waste on cricket as a nation compared to all their sports fandoms.

–       No language barriers – the state has directed the centralization of Mandarin gradually to drive out the differences of multiple language variants

–       No chaotic large families – Two week-long breaks in the year mean that families throng to reunions from across the country and shut the country down in more ways than one. So, there is chaos – but it’s somehow incredibly packed into those half-year windows. The single child policy (now relaxed back after 40+ years) has also meant cousins and families are somewhat controlled in size. Family roles across generations are fine-tuned to meet the economic purpose and stability of a household. Mothers earn, grandmothers take care of children and parents take care of the grandparents economic well-being.

–       No biases towards domestic products – unlike most Indians, who would happily pay for overseas products but undermine local brands, the Chinese are proud champions of their own products

–       No infra bottlenecks – of course, they have massive traffic jams, but everytime they see a bottleneck, they ruthlessly keep eliminating them with newer spends.

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–       No fear of new cities – India needs to build large long corridors of rail and road infra and build a handful of mega cities alongside each of them – there is no way to rebuild our large cities or expand them effectively much more. “New” is the answer as the Chinese keep finding for themselves – not adding to creaking older infrastructure.

One can debate state intervention and control of people’s lives for weeks together. One shouldn’t forget that China has been obsessed about this level of discipline and single mindedness for much longer than almost anyone else in the world. One just had to take a glimpse of a km stretch of the Great Wall, be told that it was 10000’s of kms long, and your heart instinctively feels the weight of the deep rootedness of this obsessive alignment between a 1.3 billion population. This is very different from the large set of fragmented princely states that was the basis of modern day India during the same 2000+ years.

I’m not going to explicitly spell out the differences on each of the above points relative to India. The differences scream out of the unwritten sentences.

This FOCUS, seldom seen in most other countries, added to their fearless forays into the rest of the world means that they can become a world power like none other. They are unafraid of winning over political ground with business and economics as the primary driver and have no baggage in terms of biases. They will, in my opinion, overtake American capital in a very short period of time in Indian tech and startups. They see the opportunity with far more clarity than most others in the western world.

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The Chinese are very proud and jingoistic and have been pronouncing the one country, one people mantra for millennia. It’s not a new found post-1947, post-independence phenomenon such as modern India. Coupled with the above characteristics, despite being a nation of its size, the conditions suddenly create an unparalleled juggernaut.  They are going to be driving a lot of the world economy across our lifetimes at least.

 

This piece is featured in the The Little Blu Omnibus – a compilations of articles and notes authored by the team and our founders. To read the rest of the articles, go ahead and download the e-book via this link.

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In March, Blume Ventures along with 40 portfolio founders took a 10 day trip to China, as part of the ChIndia TMT Dialogue 2017, to interact with internet giants, government officials, and some of the best startup minds in the country. Hence, we thought it would be a great idea to share some of our learnings and key observations that could be helpful to our ecosystem. We are pleased to offer you the e-book here