India to See 3-5X Surge in VC/PE Money The Next Few Years: Gopal Srinivasan He pointed out that India's real entrepreneurial engine lies in its small and medium businesses, with the MSME sector having 67 million entrepreneurs producing 6–7 per cent of GDP.
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India is going to get a ton of money coming into venture capital and private equity, and the industry will grow three to five times in the next few years, said Gopal Srinivasan, Chairman and Managing Director of TVS Capital Funds, in a fireside chat held at the Entrepreneur 2025.
"But remember, a VC firm is not about money; it's only as good as the fund manager, and the fund manager must be made for the entrepreneur. We investors are just like the wind that blows around, but you, the entrepreneurs, are the fire. The earth is India. Don't worry too much about VCs; we are highly overhyped. The only heroes are all of you in this room," said Srinivasan.
Srinivasan said that his firm, TVS Capital Funds, is deeply rooted in the Indian ethos. "My capital is Indian. We don't take dollar money; we only invest in India, with Indian entrepreneurs, ideally not just from IITs. Like the Indian cricket team, we need to find stars from every part of the country, not just Bombay and Bangalore."
He pointed out that India's real entrepreneurial engine lies in its small and medium businesses, with the MSME sector having 67 million entrepreneurs producing 6–7 per cent of GDP.
"The heart of India's economy is right here, in small businesses doing one crore to ten crores a month in revenue. Some will grow, some will stay small, and that's perfectly fine. Small business India is what India is all about," said Srinivasan.
On the evolution of venture capital and private equity, Srinivasan shared hard numbers, adding that India invests about INR 2-3 trillion a year in VC and PE, excluding infrastructure and real estate. Out of this, only 10–15 per cent is Rupee capital.
"We have INR 150 trillion in long-term domestic pools, life insurance, pensions, HNIs, yet only INR 4 trillion is in VC and PE. That means this industry will grow three to five times in the next five years. There's a ton of Indian money waiting to enter. A VC firm is not about money. It's only as good as the fund manager. The fund manager has to be made for the entrepreneur, and the entrepreneur for the fund manager," said Srinivasan.
Srinivasan also lauded the government's proactive stance in catalyzing innovation.
"India doesn't like risk; it's a risk-averse culture. But the government has stepped in—funding defense, biotech, semiconductors, AI, and energy. The new R&D Innovation Fund, INR 1 lakh crore over five years at zero interest, is a game-changer. For the first time, India will see this kind of money going into funds, incubators, and research institutions. This is the new JAM Trinity: risk capital, innovation funding, and government collaboration."
Asked what he looks for in founders, Srinivasan said that the firm does not park money and looks for entrepreneurs with a higher cause.
"If someone says, 'I want to be worth 1000 crores,' I walk away. The higher cause is what gives meaning and joy. Entrepreneurs are imperfect, over-indexed on a few things. We meet them ten or twelve times, sometimes for fifty hours, to really know them. We look for superpowers that align with their business dreams. That's when you know they'll make it, said Srinivasan.
