How about a venture that can create value by helping technology business entrepreneurs in India? Here’s a 2014 take on it.Business-Entrepreneurs-How-Can-We-Support-Them
The essence being that the right mix of people can support multiple deep-tech startups. With a limited liability partnership (LLP) structure, the venture would assist entrepreneurs in marketing, business development, sales, fund-raising, risk management, hiring, etc. In exchange, the firm would take sweat equity in each startup.
Of course, both parties would have to put skin in the game. Instead of equity, could a mix of fixed fees and performance fees be better for aligning incentives? I explored various engagement models – via research as well as talking to many entrepreneurs.
Notably, every single founder confirmed the need for external support in business development and fund-raising. Moreover, they sought not only advice but execution support as well. The dearth of a well-rounded management team at the early stages created the need for outside counsel who can work alongside the CEO to win customers and investors. Further analysis led to the idea of an ‘hour glass’ model of human resources. At the top would be many advisors and experts, each of whom had to contribute only a small fraction of time to a given startup. At the bottom were interns and junior resources who would be dedicated full-time to a venture without adding much financial burden. In the middle is the core team of advisors. They are partners in the proposed firm and responsible for not only advice and execution support but for overall orchestration as well. To ensure commitment by all advisors, the sweat equity would be tied to a vesting period. While a 4-year vesting schedule may not be feasible, a 1-year or 18-month vesting period could be agreeable to all parties. Moreover, it would serve as a signal of commitment to future investors.