Should I Invest in an Indian VC or an American VC .
This world needs startups. That’s where the growth is going to come from, and in many cases, the startups are catalysts for creating new industries and path breaking innovations.
But for creating these startups we need VCs or Venture Capitalists . And believe me the VCs make a lot of money .
How about investing in these VCs who creates the next big start ups and companies of tomorrow .
For an Indian Investor , Investing in VCs is new investment class-altogether and by doing the same ,they can part of this multi billion dollar VC ecosystem & can surely make a lot of money.
So now you are ready to invest in VCs but the big question that will come in your mind will be “Whether I should invest in Indian VC or American VC”
The query is common because it is an important decision to make once you decide on VC investing .
For Starters- Indian Investors , the US Venture Capital Market should be on top on their mind when venturing into VCs investment domain .
Let us do a comparison how US VCs are different from Indian VCs :
History : Firstly ,The US has a long history of venture capital firms and some of the first venture capital firms of the world started in the US in the mid to early 1900s, around the time of the second World War and technically these US VCs has been there for than 70 years or 7 decades whereas the Indian VC market just started less than a decade back. For an Indian Investor , US offers a strong legacy of right VCs & VC firms to invest upon .
Long list of Successful VCs :US VCs market is the home to well-known venture capitalists include Jim Breyer, an early Facebook (FB) investor, Peter Fenton, an investor in Twitter (TWTR), Peter Theil, the co-founder of PayPal (PYPL) and Facebook’s first investor, Jeremy Levine, the largest investor in Pinterest, and Chris Sacca, early investor in Twitter and ride-share company Uber. How many such names you can recall from Indian VCs side which are well known globally . For an Indian Investor this means a chance to associate with top VC brain and leaders via their investment in US VCs firms & entities .
World Biggest VCs Market : US is the world biggest VCs market and it is way ahead with Global VC Markets in terms of size & depth.The size of US VC Market is in billion dollars and even last year the US witnessed close to 3617 Deals worth $ 47.3 Billion of VC Investments . According to a study by Ernst & Young ,The United States, continues to be the largest recipient of VCs investments . More than 75 % of VCs investments and activity take place in US . For Indian Investor this means an opportunity to invest in the biggest VC market of the world .
Due Diligence : One of the important parameter of the success & safety of your VC investment is the due diligence . US VCs are very high on the due diligence aspect and do proper analysis for each & every investment deal and maintain high level of statutory compliance's whereas in India the kind of losses the VCs investments are making , it clearly shows that Due Diligence is of not that scale or is not done properly. For Indian Investor this makes their US VCs investment more safe & secure than the Indian counterpart investments.
Regulatory Framework : In India there is strict regulatory framework that regulates VCs which is very rigid & complex and at times it is not very investor friendly . There has been a lot of restrictions in India on the way the VCs can raise money from investors here and way the Investors invest in VCs .But in the US , there is a very investor friendly climate and less regulated environment for VCs investments . For Indian Investor this implies a better scope for investments and better platform in US to make VCs investments & churn out money.
Better Portfolios of Companies : In the US you have better portfolio of start ups & emerging companies to invest upon as compared to India . Most of the world best companies -Google, Apple, Microsoft were initially startups from US and if you are investing in US VCs you can get option to invest in the next big / unicorn company. Also in terms of diversification , you startup companies are far better and there is better choice for VCs to puck up the same — See Tesla , Space X. You won`t find such type of companies in India .Also the US Venture Capitalist invest in primarily all segments of companies -small or newly created or existing companies with high growth potential. These Start ups might be in in fast growing sectors of the so-called “new economy”, such as information technology, biotechnology and health care and in traditional business sectors so called “old economy”. For Indian Investor this mean rich & diverse portfolio of promising US companies which can offer good fortune .
Higher Returns :Another important aspect which makes US as the Hub of Venture Capital is higher returns given by US VC market in the past years .Going by the calculations , from the beginning of the VC industry in the average ,the US VCs have given double digits and multiple folds returns than other worldwide VCs Markets . For Indian Investor this implies scope of earning higher returns.
Large Valuations at Exist :In the US , the companies are being sold at very high valuations & exists are much more bigger interms of value . So the US VCs have a better chance of making profits and good returns with higher valuation scenario . In India the company valuations at exists are quite lower and due to lower valuations it is difficult for Indian VCs to make large profit from their investments . For Indian Investor this will pave way for higher profits as they can leverage big on lucrative valuations at exists with their US VCs investments.
Right Experience & Expertise :The US venture capitalists have been able to reap millions of dollars from their smart investments and expertise .They have the right experience, industry expertise, research, and money — which their Indian Counter-part might be lacking on as the they are still in developing stage. For Indian Investor, this signifies better management of their capital in hand of these expert & equipped VCs managers .
Hence with many advantages , US VCs offer a better avenue for Indian Investor to make good returns on their investments . For the Indian Investor it is best that they should explore services of the leading US based “Investment Advisory & Capital Raise Firms” which can advise on best route to invest in US VC market VCs ,VC firms.
These firms with strong due diligence expertise and US Network, are helping the Indian Investors to make smart , efficient & savvy investments in the best US VCs & their promising US start ups .
Some of these firms in order to cater to Indian Investor demand for US VCs has opened up offices here in many Indian Cities and have built VCs investment support teams to guide the Indian Investor to invest in US VCs sitting at their homes in India .
About SeaLink Venture : SeaLink is the leading Capital Raise advisory firm & the eminent player in EB-5 Investor Green Card program for the United States. SeaLink offers competitive offshore investment opportunities in Direct Equity, Preferred Equity, Venture Capital, and Real Estate & Technology funds. SeaLink also brings to you the most elite projects for the safest & fastest route to getting your Green Card