SME Times News Bureau | 07 Apr, 2011
JGI Ventures India Ltd, a pioneering venture fund based in this tech hub, has embarked upon a unique programme to groom budding entrepreneurs by incubating and funding their startups with a war-chest of Rs.500 crore, a promoter said Wednesday.

"We will groom young students into entrepreneurs and incubate their startups with venture fund through a novel post graduate programme in entrepreneurial ability with guaranteed investment and incubation of their business ideas," JGI promoter and founder chairman of Jain group of institutions R. Chenraj Jain told reporters in Bangalore.

Jain has already mobilised Rs.250 crore through internal accruals and set a target of doubling it to Rs.500 crore in the next 12 months to enable the venture fund create entrepreneurs in any sector spawning products and services.

"The potential entrepreneurs will have to invest upfront Rs.3 million (Rs.30 lakh) in the 30-month programme that will have three phases - 10-months for training, eight months for exposure and study of international markets and 12 months for incubating their business venture," Jain said.

JGI has also an agreement with banks, funding organisations and industry associations to provide the upfront fee for the 'IDEA' (incubating & developing entrepreneurial ability) programme, which will constitute the budding entrepreneur's stake in the startup as 30 percent equity.

"We will have a proportionate stake in the startup as part of its equity and help the young entrepreneur to raise debt from banks or financial institutions for working capital or up front investment in his/her venture at lower interest rate," JGI chief executive Hemachandran Seshadri said.

During the incubation period, JGI will assist the entrepreneur in networking, funding, customer acquisition, marketing, nurturing talent and extending logistical support.

"Lack of angel funding or very early stage seed money backed by professional guidance has prevented growth of startups in India. In spite of a number of potential entrepreneurs, engineering skills and product ideas, options are few for funding a startup through venture capital, angel investors and incubators," Jain noted.

During the last five-six years, JGI incubated 46 start-ups in diverse sectors with a combined turnover of Rs.147 crore and created about 2,300 jobs.

The sectors include education, IT, infrastructure, financial services, technology and hospitality.

"We plan to incubate about 350 startups with a projected combined turnover of Rs.3,500 crore," Jain asserted.

The 30-month programme aims at preparing entrepreneurs with skill sets of business management and facilitating the much-needed capital, which impedes talented entrepreneurs to start a business.

"The momentum of the Indian economy can be sustained only through strong entrepreneurship. Young India has the potential to change course, take risks and achieve greater heights. We believe in the youth and would like to contribute to their growth path," Seshadri pointed out.

According to JGI anchor Yeshasvini Ramaswamy, the programme will identify and support student entrepreneurs who are passionate about building businesses of excellence on par with global corporations.