Commerce and Industry Minister Piyush Goyal on Wednesday urged investors to focus on entrepreneurs in small cities, foster innovation and facilitate mobilisation of domestic capital.
He said that there is a large pool of talent in India’s interiors and venture capital funds should reach out to tier 3-4 towns and cities. Many entrepreneurs in India have their roots in small towns and rural India which started as a small unit, the minister said.
“I suggest a 4-pronged focus from the industry. Urge investors and capital providers to focus on 4 Fs – fostering innovation and future tech, facilitate mobilisation of domestic capital, fast tracking self reliance, and focus on tier 2,3,4 cities and towns,” he said while addressing the Indian Venture and Alternate Capital Association’s (IVCA) Conclave.
He added that domestic seed capital will have to increasingly play a big role. He suggested engaging with incubators being set up all across the country. “If the domestic venture capital industry could literally adopt some of these incubators and reach out to remote areas, it will make a difference. Also, a collective effort to put money on the table and not squeeze them out of their ideas,” he said, expressing concern that at a nascent stage, many good ideas get sold “very cheap” and get taken over with a very small ticket check for lack of alternatives by one or the other investor.
“We must also look at clawback or instruments and understanding and compassion towards the persons who come up with ideas so that they get a better deal,” he added. Further he said that India’s exports would reach USD 400 billion this fiscal and startups can contribute significantly in achieving the targets of USD 1 trillion of goods and services exports each.