Dazzling Entrepreneur in managed HR Services

With excellence of services as a premise, Future Focus Infotech has won many awards and recognitions, the latest ones being the Deloitte Fast 50 in India, Deloitte Fast 500 Asia Pacific and Axis Bank- Dun & Bradstreet Business Gaurav Award

For Mani, it was not a bed of roses despite initial successes. He says, “Only after 10 years of being an entrepreneur journey, I found the venture sustainable.” About the scalability of a business such as managed HR services, he observes, “There is large opportunity to scale. IT depends on human resources, and with India IT majors growing at a good clip, this is bound to scale. Our service is required during recession and times of growth.”

Mani is on the Governing Council of TiE Chennai and mentoring entrepre-neurs excites him,: “It’s an opportunity to learn more about entrepre-neurial behaviour from various industries, of varying size and scale. This also helps me consolidate my thoughts and connect the entrepreneurs to meet the right person for issues they face.”

Entrepreneurship has no specific path. M.V. Subramanian (Mani as everyone calls him), Managing Director and CEO of Future Focus Infotech, started as a management trainee with General Electric in 1987. In 1994, the entrepre-neurial bug bit Mani, and he started a share-broking firm. In 1997, he then ventured to create his own brand - Future Focus Infotech, a strategic IT and managed HR services company.

Preserving wealth, sustaining the enterprise

Expanding Horizons: Private Equity in Real Estate

The growth of wealth brings for the entrepreneurs the fundamental issue – how to ensure progression of the business for the long term. What can we learn that allows the continuity of the family business and values post the first generation? As the business grows, entrepreneurs must have a structure to manage succession, absorb new family members and criteria when a business should be exited.

Indian entrepreneurs need to segregate operating control of the business from beneficial ownership, mitigating business and family succession risks. At an appropriate time, entrepreneurs need to move from an entre-preneurial driven, unstructured culture to one dominated by profes-sional managers. Management control should rest with professionals [could be family members], as they are able to perform more efficiently. The beneficial ownership continues to rest with the owners, who provide the vision and connections, and also enjoy the fruits [increase in firm valuation] of efficient management.

For this, families can have a separate Family Committee that provides vision and direction, and a formal structure to communicate with management and amongst family members. This will allow entrepre-neurs to build larger institutions.

As businesses grow, families will also expand and entropy will only increase. The discontinuity will be difficult to manage if a formal family structure is not in place to meet the needs of the next generation.

If a younger generation wishes to take over the business, then clear criteria can be defined to determine their eligibility to succeed their elders. Succession must also take into account the changing role of women and their desire to be involved in the business. The lack of an appropriate family structure can force a business to close after the first generation itself.

Owners should exit their business if it is not efficiently managed or if it receives exceptional valuations. A control-and-hold behavior will simply not enable success. The cash flows received from the sale of business can be invested in new initiatives that enable the new generations to invest their skills. We need not throw away the characteristics of the entrepre-neur business – work ethic, perseverance, dedication, flexibility, ability to deal with diversity, customer focus -- but to blend what has been learned about customer focus and diversity, for example, into a performance-driven structure.

Entrepreneurs have shown their ability to adapt to the changing economic environment and deal positively with the uncertainties in the market place. It is vital that changes in the family and business structure also match the changing economic environment.

sector. I will highlight some findings from this report to indicate how the horizons of PE as we know it have expanded in the case of Real Estate investments and what it means for entrepreneurs. The findings are based on an analysis of 290 PE deals in Real Estate during 2006 – 2010.

The emergence of Real Estate

The incidence of PE investments in Real Estate was virtually unheard of before 2006. However, in the five year period ending 2010, the landscape has altered considerably. There has been an estimated PE investment of $17 billion (about Rs. 79,900 crores) in Real Estate during the five year period ending 2010. There were a total of 124 PE funds that were looking at making investments in the sector, of which 48% are Dedicated Real Estate PE funds while the remaining 52% are General Purpose funds that also make Real Estate investments. The share of Real Estate in the overall PE investments in India as well as globally, indicates that this sector accounts for one third of total PE investments in India. This could partly be attributed to the regulatory restrictions that exist in the sector today. Nevertheless, PE has emerged as an important source of funding in this sector which has difficulties in accessing the conventional institutional debt markets.

Type of investments

PE Investments in Real Estate can be made either at the level of holding company or directly in the project SPV’s. Our analysis indicates that investments in project SPV’s are twice as that of corporate level invest-ments. A ring fenced financing structure that is more often seen in the infrastructure sector is more becoming common in the real sector as well. This indicates that investors are willing to make investment decisions based more on the strength of the individual projects, rather than on just the financial capability of the promoters. In SPV type of investments, exit is likely to be more phased corresponding to project completion and the sale of apartments, rather than by way of IPO or M&A. Thus the pressure on the entrepreneur to provide a single defining exit moment is consider-ably lesser in real estate as compared to other sectors.

Penetration to Tier 2 cities

Most of the Real Estate development has been traditionally seen in Tier 1 cities. However, we find that the total PE investment in Tier 2 cities is as much as that of Tier 1 cities, indicating that PE investors have been more forthcoming to support projects beyond the boundaries of Tier 1 cities. Not only do they make investments, but they also make larger invest-ments in Tier 2 cities.

Hail Chennai!

For the curious minded, I would like to highlight an interesting trend that we observed in Chennai. While Chennai occupies the third slot (the top two being Mumbai and Bangalore) among the six metro cities in terms of PE investment in Real Estate, the average amount of investment per deal is the highest among all metro cities ($95.33 million in Chennai versus the overall average of $51.78 million for the six metros). This probably, is an indication of the project strengths and the resilience of the sector in Chennai!

Finding her calling in Rural BPO’s

IIT as neither of her parents understood what a rural business meant. On her business model, Saloni says, “the key idea we agreed on was finding new ways to add income to the rural economy.” Finding huge attrition among BPO employees who were largely from rural areas, Saloni hit upon the idea of a rural BPO. DesiCrew was born in 2007. In four years, Saloni has become a mascot of a young entrepreneur bringing decisive change in the social enterprise sector.

This was not without challenges. She had to fight a bitter, nerve-wracking battle to take possession of assets that a franchisee took with him after he exited. Sensing the folly of the franchisee model, Saloni tweaked her business model to establish centres in four locations, three in Tamil Nadu and one in Karnataka. Saloni has finally managed to win the trust of her employees in making them work at their home towns in villages rather than migrate to cities in search of employment.

With the help of the leadership team, Saloni was well on her way to realize her vision of a rural BPO, a novel concept when she started it. Rajiv Kuch-hal, an angel investor, RTBI in IIT-Madras headed by Dr. Jhunjunwala and Villgro, a social enterprise incubator, offered her unstinted support. As DesiCrew scaled up, Ramesh Magnati has joined as the CEO recently.

About her idea of social entrepreneurship, Saloni says, “Social entrepre-neurship is about making a positive impact. The idea is to look at business with social impact. It’s slightly harder to do.” She is excited to be the winner of TiE Stree Shakti award this year, which she thinks is special as “the best minds in the country evaluate your idea.”

Saloni Malhotra once joked that, among the largely grey haired or bald men in the social enterprise sector, she, a young woman, was not taken seriously. After meeting Dr. Ashok Jhunjunwala, the IIT-Madras professor who was fanatic about rural India’s imminent growth, Saloni’s life took a decisive turn. At 23, her only option to convince her physician parents was that she was going to work in

Securing your Data!

two-factor authentication product. In Pavan’s words, “a simple idea shaped into a product capable of solving real-world hacking problems in today’s highly networked world”.

ArrayShield provides security against identity theft, a serious issue today It is not surprising that ArrayShield has won innumerable awards and recognition in its short span of existence with a robust growth trajectory predicted for the future. “Fortunately we have been recognized in multi-ple forums primarily because of the uniqueness and innovativeness of our technology and product,” admits Pavan.

Pavan explains that “initially we identified the low hanging fruits before targeting broader use-cases. One key lesson learned was that spending time with customer directly is irreplaceable.” On TiE Chennai’s hand of help, Pavan says, “The initial days as an entrepreneur are very lonely and TiE Chennai has created the right platform for upcoming entrepreneurs to reach out to mentors and other entrepreneurs who have gone through the same phases before.”

“Our startup experience over the last one and a half years was a roller-coaster ride. Sometimes we felt on top of the world and many times we felt so depressed,” thus sums up Pavan Thatha on his entrepreneurial experience.

The brother duo of Pavan and Rakesh Thatha is certainly not the first one in business. Using Rakesh’s research in the area of security, the brothers founded ArrayShield in 2010, and developed a path-breaking patent-pending

24th Nov 2011 @ Chennai Convention CenterCHENNAI 2011

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TiE Coimbatore is the newest addition to the TiE Global network. TiE Coimbatore serves the greater Coimbatore region which comprises of Coimbatore, Tirupur, Erode, Salem, Namakkal & karur , Ooty and polla-chi districts. Known for its entrepreneurial nature the region has entre-preneurs from varied industries.

The chapter which was launched in Nov 2010 by Mr. P.K. Agarwal, CEO, TiE Global and Mr. Ramaraj, Trustee ,TiE Global & Past President, TiE Chennai. This is the 17th chapter of TiE in india and 56th worldwide and has 130 members (including 27 Charter Members) and this number keeps growing! The members are drawn from a broad spectrum of industries and businesses. Anusha R. Mahesh CEO of park Institutions is the current president.

“The region has entrepreneurs of all industries of all sizes, small medium and large, TiE Coimbatore has something to offer for all , we would like to play an important role in enhancing the Entrepreneurs’ capabilities to achieve global standards in quality , size , provide ample networking to take their businesses to the next level, we invite all entrepreneurs to make use of TiE Coimbatore for their growth. “ said Anusha.R Mahesh president TiE, Coimbatore. We also have lot of student initiatives to foster entrepreneurship among the youth, she added. The past year various programs were conducted on social media, design thinking, Funding, business model development, importance of networking and innovation in business etc.

TiE COIMBATORE – new kid on the TiE Block

Register Now:

Online: www.tiechennai.orgCall: Ms Latha at 044 6515 4900Email: latha@chennai.tie.org

by Vishal Jain, Managing Director,Barclays Wealth by Professor Thillai Rajan A, IIT Madras.

Venture Capital (VC) and other forms of Private Equity (PE) play an important role in creating a supportive ecosystem for entrepreneurship. At IIT Madras, we have been systematically study-ing the VCPE industry in India for the last three years. The outcomes of the research have been produced in the form of an annual report series on the Indian VCPE industry. The 2011 report, released recently, was focused on the Real Estate

TiE Chennai Entrepreneur Awards 2011

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CHENNAI 2011

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