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Seedfund started with the team- People that had hands-on experience with raw startups in India. Pravin Gandhi and Bharati Jacob came from Infinity Venture, the fund behind Indiabulls, Indiagames and the like. Mahesh Murthy came from Passionfund, where he backed Geodesic, Pinstorm and other successes.
Then the fund size - From their experience, they figured the right amount of funding for an Indian startup wasn’t in the millions or in tens of millions of dollars range. It was closer to about $500,000. They also figured they could work closely with about 15 or 20 companies over the next 5 years - and hence arrived at a fund size of about $15 million. They can therefore invest from Rs. 1 to 5 crores in a startup company. That probably makes us India’s smallest VC fund - but, hey, small can be beautiful.
Next, the target sectors - They decided to stick close to businesses they know - and sectors that can make a big difference, not just in the global market - but in the large Indian market too. So they’re looking mostly at internet or media or mobile or telecom or retail or consumer-facing plays - and also for things that aren’t yet sectors.
On to the investors - In this market, money is cheap - but the right money makes the difference. They wanted limited partners that could add significant strategic value to their startups - and they’ve been lucky enough to end up with a dream team here too: institutions like Motorola Ventures, Reliance ADA Group, SVB Financial Group, an affiliate of Silicon Valley Bank, Sierra Ventures, Mayfield Fund, Edelweiss Capital - and individuals like Kanwal Rekhi, KB Chandrashekhar, B V Jagadeesh and Sridar Iyengar.