THIRUVANANTHAPURAM: Will the 2018-19 budget solve the fund crunch faced by budding entrepreneurs? Focus on entrepreneurship development through angel and venture capital fundings - proven modes of grooming young entrepreneurs - can be game-changers for the state, say experts.V K Mathews, founder and executive chairman of IBS Group, terms angel funds and venture capital funds as “essential requirements” for the development of Kerala’s industries sector. Recalling his own experience of a $60 million private equity funding for IBS, Mathews told Express the mentoring of an experienced investor will be helpful to growing businesses.
But the homegrown entrepreneur who made it big in the aviation business cautions against the government starting a venture capital fund on its own.“First, the government system lacks the professional competence to assess potential ventures. Second, its officers cannot take the capital deployment risk. A viable solution is to promote private venture capital funds,” said Mathews.
Kerala Startup Mission (KSUM) had recently launched efforts to attract private venture capital funds. Funds supported by the KSUM will have to invest in Kerala-based startups in the same proportion committed by the state government. “We have selected two VC funds so far. Ten startups will be supported in the first phase. We aim to pool in C500-1,000 crore in the next three years,” said KSUM chief executive Saji Gopinath.
The KSUM supports only technology-based startups. A broader plan for attracting venture capital funds in the state budget could revive the fortunes of startups in different sectors. Entrepreneurship development will also help in addressing the issue of unemployment. Kerala is ranked third in unemployment in the fifth national Employment-Unemployment Survey conducted by the Ministry of Labour and Employment. Of the 35.89 lakh unemployed registered with the state, 43,000 are professional degree holders and 1.33 lakh are technical diploma holders.