Low Risk Low Gain India

According to a recent report [1], though the investments into India have increased substantially, a little of it actually reaches the early stage companies.

0ver 90% of the money is invested in late-stage initiatives by mature firms. Even the remainder mostly finances new firms replicating proven business ideas. As a result, very few innovative startups are funded. This will have a negative ripple effect on the quality of late stage opportunities in later years.

While US, UK and Israel spend nearly 30% of their investments into seed and early stage (29% in US, 39% in UK and 32% in Israel), India spends only 6.9%. China is better - it spends 12.5% of its investments in seed and early stage companies.

References:

1. Accessing Early-Stage Risk Capital in India, Rafiq Dossani, Stanford University, Asawari Desai, TiE Inc, Shorenstein, APARC, Standford, and TiE.