TiECON 2012 - Angel Fund panel

TiECON 2012 organized by TiE Chennai yesterday had an excellent panel discussion on Angel Funds.

Gopal Srinivasan of TVS Capital Funds moderated the discussion. The panelists were: Paul Singh of 500 Startups, Rajesh Sawhney of GSF Accelerator & Superangels, Rehan Yar Khan of Indian Angel Network, Karthik Reddy of Blume Ventures and Suresh Kalpathi of Chennai Angels.

Of the above, Rehan Yar Khan and Suresh Kalpathi represent Angel investors: wealthy people who invest their own money in small start ups, and help the companies go to the next stage. Paul Singh and Rajesh Sawhney represent accelerators - where they identify small companies who can be put together and fast tracked to next stage. Blume has raised money from nearly 100 HNIs, so it acts as a Venture Fund but Karthik claims they work like Angel investors.

Karthik provided an excellent insight into the kind of companies they invest: A company which will reach revenues of 2-5 crore INR within 2 years (so that they can attract investments in the next round from VCs) and can hit breakeven by this time so that they are not worried about any delays in the next round of investments. Even if there is no one interested in investing in such companies, Blume can itself put in more money in such companies.

Paul Singh said they typically invest 50,000 USD in their companies, hoping that it will last them for 6-7 months and look for next level investments. He said putting the start-ups together makes them perform better - peer pressure driving them to deliver more.

When queried on valuations, Paul said one could consider a ball park of not more than 15% of the company for cash to last for an year. Rajesh said he will not invest in a start-up company where the founders have given away more than 30% before the Angel round (to friends and family). Because there will be more dilutions in the subsequent rounds which will leave very little for the founders in the end. he said he has helped fix this issue for couple of start-ups but where it is not possible, he will not invest in them, even though the people are good and the idea is good.

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There was a session on 'கஷ்டமான கஸ்டமர்' (Difficult Customer) in Tamil. S.Ve.Shekhar moderated the session. Karunanidhi of SKP Engineering College, Jayakannan of Arasan Match Industries and Muruganantham (low-cost sanitary napkins) of Jayashree Industries participated. It was quite an enjoyable session too, with a lot of witty repartee from Shekhar. This sessions could have been longer - it appeared to me that the whole thing came to a stop rather quickly. It is nice to see TiE organizing a Tamil session too.

It was at the end of this session that our new book was launched - a book written by IIT-M Prof A. Thillai Rajan (in Tamil): A guide to first generation entrepreneurs. This book will be available for purchase in another 3 weeks.

Crumbling democracy in Sri Lanka

Indian news media seems to be least bit concerned about the situation emerging in Sri Lanka. The Tamil Nadu newspapers (both Tamil and English) were primarily concerned about the civil war in which LTTE was destroyed by the Sri Lankan military. Since then, the coverage, if any, is only about whether Sri Lankan state will be held responsible for the human rights violations during and in the run up to the war.

Currently, the Rajapakse clan who have enormous control over every aspect of Sri Lankan administration is in the process of impeaching the Chief Justice of Sri Lanka Supreme Court. I have not seen any news coverage of this in the Tamil Nadu media.

The Supreme Court of Sri Lanka has hardly been the upholder of democratic rights and human rights of the Sri Lankans. The Cage, by Gordon Weiss documents how the courts have systematically sided with the ruling dispensation to terrorise and bulldoze the opponents into submission. Yet, whenever bodies such as UN and International human rights organizations have complained about the dwindling civil rights in the country, the ministers and secretaries of the government will jump up and say that the Sri Lankan justice system is exemplary and will provide justice for all better than any foreign body would.

The current attempts of impeachment shows that Rajapakse & co will not brook any form of non-compliance from other "pillars" of their democracy. Just as Rajapakse group dispensed with the army commander Sarath Fonseka and put him in jail on trumped up charges, now it is the turn of Chief Justice Shirani Bandaranayake.

Indian news media focused on the power struggle in Pakistan between then dictator Gen. Pervez Musharraf and the Supreme Court of Pakistan. However, there is not much interest in a similar struggle happening in Sri Lanka.

Sri Lanka will soon be a right wing dictatorship under Mahinda Rajapakse, where dissent in any form will not be allowed. The opposition UNP under Ranil Wickremasinghe is powerless. Sarath Fonseka has been emasculated. The army is controlled by the defense secretary Gotabaya Rajapakse, a younger brother of Mahinda, while the Parliament is controlled by the speaker Chamal Rajapakse, an elder brother of Mahinda. If you have a pliant Chief Justice, then even the bits and pieces legal opposition can be taken care of.

Caste clashes in Tamil Nadu

It is very disturbing to see the emerging caste conflict in Tamil Nadu. The MBC castes in particular are coming together as a bloc against... not the upper castes but the dalits!

PMK's Ramadoss has organized a meeting last week in which other MBC castes have come together, possibly to create a united political front. But the key agenda is to keep the dalits from marrying their womenfolk! Look at the language here:

“They wear jeans, T-shirts and fancy sunglasses to lure girls from other communities,” [Ramadoss] told reporters. A resolution adopted at the meeting cited statistics of broken marriages to claim that inter-caste marriages ended in failure because they were unions born out of caste design and not love.

Dalits are portrayed as 'girl-snatchers'.  This is very similar to the Hindutva organizations accusing the Muslims of love-jihad. Ramadoss claims that dalits are waging a jihad against 'their girls'.

The agenda is two-fold:

1. Stop inter-caste marriage, in particular if the boy is from the dalit community.
2. Weaken the SC/ST (Prevention of Atrocities) Act.

The second demand is more sinister. SC/ST Act itself is very rarely applied and it has not prevented any atrocities against the dalits. Now, the MBC castes want the act to be weakened (read: removed) so that they can roll out their gameplan without any worries.

The response to this is very muted from the mainstream political parties. No official statement from DMK, AIADMK, Congress and BJP. Only Thirumavalavan of VCK is trying to organize a political front asking for support from the communists and Periyar groups (a bunch of fringe political entities opposed to caste, amongst other things). Such a political front will not have the strength to withstand the fury about to be unleashed by Ramadoss and his cohorts.

I don't think a few dalit boys marrying a few vanniar girls is the real issue here. The anger and hatred against the dalits seem to be very real. The speed with which nearly 40 MBC/BC castes have come together on an anti-dalit platform shows that they are very serious. There are regular statements from other caste groups as well against the dalits in the recent times.

It is important for the sociologists to quickly understand the reasons for this simmering anger coming to the fore so quickly and suddenly. Besides the burning of three dalit colonies in Dharmapuri district, there have been a couple of minor (which means only 4-8 houses burnt and not 100s of houses) burning incidents near Neyveli (heartland of PMK). This can flare up into a full scale war, if the government doesn't act immediately.

TN encounter killings

Two accused have been killed by police when they were being taken from Madurai to Sivaganga. These two are accused in the killing of a police constable sub-inspector named Alvin Sudhan couple of months back.

The encounter story is the usual police story. One of the accused apparently complained of chest pain. The police stopped the van, when the two jumped out and escaped. They were later found to be travelling in a two-wheeler. They were surrounded by police. The two accused then attacked the police with country made bombs. As a defensive measure, the police apparently shot and killed them.

The video footage released by the police show a few large sickles and various other weapon as if picked from a typical goonda arsenal.

The police version sounds so implausible and yet the media is not asking hard questions. People who call in during talk shows brazenly defend the police action, as a sort of revenge to Alvin Sudhan killing. Facebook and Twitter discussions support the police action.

Indians don't seems to understand the concept of a modern democratic state with a rule of law, independent judiciary, a just trial before a verdict is pronounced, the right to defence in a court of law etc. They seem to love the police state, where police barge in, shoot and then make up the evidence. Every single encounter killing in the state of Tamil Nadu in my living memory appears to be a sham. No independent verification of the police story, no explanation on whether such an action was really required etc.

This is not to defend the killing of the policeman. But in a civilised state, the criminal who caused the death will be caught, a fair trial given so that the people really convince themselves that the accused is indeed guilty, and then a punishment given commensurate with the crime, while at the same time the accused is given all the rights to defend himself.

Somehow, the citizen of this country does not seem to understand this process. He in fact thinks this complex procedure is a drain on our finances. He seems to want a quick solution, instant justice, a hollywood/kollywood form of draw a pistol out and pump a few bullets into the alleged killer's head.

But what about Alvin Sudhan, is the oft repeated question. What about him? Like so many people who have been killed in random violence or planned violence, Alvin Sudhan is just another victim. Like the software engineer who went to a TASMAC bar in Velachery to have a whiskey, and found himself caught between two gangs with lethal weapons fighting each other.

Random or planned killings cannot give police extraordinary powers to act on their own as if they are above the law. That in Tamil Nadu they do this with impunity is because the people support them.

I feel sorry for the people, because they will be at the receiving end one day.