Indian Startups are Moving Beyond Valuations to Create India-suited Businesses says this Investor

Pankaj Joshi believes the second phase will see a lot of new businesses getting funded, those that will actually address problems that exist in India and not just try to bring a problem that has been solved in another country and try to copy-paste that solution in India while the problem may not really exist

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

The EB5 program has been growing popularly in India in the last few years. When Pankaj Joshi started EB5 in India in 2013, people had not really heard of it. Today it is being used given the constraints faced on account of H1B visas in the US.

EB5 is an investment immigration program to the United States where a family that invests half a million dollars gets Green Cards for the investor, spouse and all the unmarried children under the age of 21 at the time of application.

The way the EB5 visa program is an enabler is that those who end up completing their education in the United States do not have to wait to clock a job. They already enjoy a Green Card and that helps them in exploring entrepreneurship.

"Families want to secure green cards for their children who are going to the US for undergraduation and graduation studies. They want their children free from any visa issues not just restricting to the jobs in America but also being able to become entrepreneurs in America," Joshi tells Entrepreneur India.

Pankaj Joshi oversees Nysa EB-5's operations in India and as country manager handles the firm's in-country marketing strategy, sales, human resources and training.

Prior to joining the Nysa EB-5 team in 2012, he worked for several years as Managing Director of Nysa Consultancy Services, a boutique investment and management advisory firm serving high-net-worth families and small- to medium-sized businesses.

Upon further conversation, he gave some insight into how he views the start-up ecosystem of India.

Indian Start-ups Moving Beyond Valuations to Creating Real Businesses

Joshi thinks in the last five years, the aim of most entrepreneurs who started their new company in India was to raise money and create valuations.

"Is your business actually delivering the value to someone who will pay premium for it? And by premium I don't mean that will they mean full price for it because right now Indian start-ups are all working on some kind of discounting model. So it's very easy to say – okay, here is something which you can buy from somewhere else for 100 rupees, I will give it to you for 80 rupees. The point is – that's not really a business. None of these companies have turned profitable in anyway. They are not even breaking on operational base. So that has to change," says Joshi.

He thinks businesses cannot be created for the purpose of having valuation because that is going to go away one day. "That is a bubble; you are literally creating a bubble and hoping that it will never burst. But any bubble can burst which is what we are seeing today in the Indian e-commerce space. So, the Indian entrepreneur first needs to identify that they are really addressing a pain point," says Joshi.

He feels Indian start-ups are now past this biggest challenge of chasing valuations and not really chasing business models; primarily not really chasing the Indian models considering Indians take time to accept formats hence leading to delays in building an actual workable business.

He is confident going forward, India is going to see its second phase of Indian entrepreneurship and the capital will start becoming available from Indian investors.

"There are lot of Indian family offices that are now looking at investing into start-ups or investing into new areas, which I think is a good space to be in and good capital to have because these are people who understand the Indian business environment and the way India does business," says Joshi.

He believes this second phase will see a lot of new businesses getting funded, those that will actually address problems that exist in India and not just try to bring a problem that has been solved in another country and try to copy-paste that solution in India while the problem may not really exist.

Advice to Startups – An Investor Perspective

Joshi advises start-ups to take money only from an investor who is ready to sit on their side of the table.

According to Joshi, somebody who comes and sits behind you and backs you should be a start-up's pick because the entrepreneur is the risk taker. He/she is the one who has everything to do and if they are curtailed in the ability to take that risk, the business will never reach the frontiers it can because somebody needs to push the boundary.

He believes it is the entrepreneur who pushes the boundary and not the financer. "So take money from the people who give you the freedom to actually do the business," says Joshi.

Joshi also cautions against taking investment inappropriately. "Don't over take money because if you take too much money you won't know how to spend it and you will waste it. So it's always better to be capital starved in the beginning and really run it like a bootstrapped company even if you have the money because it is very easy to spend the money but very difficult to earn it back," says Joshi.


3 Ways Your Brain Reacts to Uncertainty

Here's Ben Angel's three-step plan to control your emotions and achieve your goals.

How a Throwaway Joke Became an Award-Winning Ad Campaign

In our 'Creative Conversations in Advertising' series, Creative Director at Goodby Silverstein & Partners Tristan Graham and Entrepreneur magazine Editor in Chief Jason Feifer discuss the birth of a very funny (and impactful) commercial.

How This Amazing Campaign Succeeded in Changing a Brand's Perception and People's Lives at the Same Time

In our series 'Anatomy of an Ad,' Group Creative Director Tony Jones gives the heartwarming story of how Operation Santa finally took off.

How this Tech Entrepreneur, Biohacker, and Author is Helping Women with Their Periods

The founder and CEO of Flo Living on the future of biohacking and hormonal healthcare.

Duce Raymond of Sweet Baby Ray's BBQ on Using Social Media Like a Boss

Interview with Sweet Baby Ray's BBQ Catering Culinary Director Duce Raymond about his fresh approach to social media content marketing and huge results with short video for the already world-famous brand.

The Key to Effectively Communicating Important Messages Is All About Simplicity

In our 'Creative Conversations in Advertising' series, award-winning Group Creative Director Giancarlo Rodas and Entrepreneur magazine Editor in Chief Jason Feifer discuss distilling complex ideas down to a simple message.

How to Deliver a Serious Message Through Humor

In our series 'Anatomy of an Ad,' Creative Director David Stevanov explains how humor can be a storyteller's most effective tool.

This Successful Shark Tank Entrepreneur Shares His Latest Innovation

The Founder of Ooonimals, Club 44, and the OOO Studio Lab talks about his current projects and what you need to know about the risks and rewards that exist in the NFT space.

Brendan Sweeney of Popmenu on How Ego is the Root of All Evil

Interview with Popmenu CEO Brendan Sweeney about building a positive user experience, the state of restaurant technology, and the importance of providing answers.

Recession-Proof Your Mindset with Neuroscience

With top economists fearing a recession, award-winning author Ben Angel teaches how to recession-proof your mindset with neuroscience to manage stress levels.

How to Find Your "Oxygen Points" to Sustain and Grow Your Business, According to an Investment CEO

Entrepreneur Network Partner Ashley Crouch sits down with the CEO of Al Zarooni Emirates Investments, Dr. Adil Alzarooni.

How to Get Investment Funding for Your Business

Entrepreneur magazine's Editor-in-Chief Jason Feifer and Narya Partner Falon Donohue have a lively and informative conversation about securing the funding you need to launch your dream.

Keith Koo Explains How Angel Investors Prioritize Startup Funding Decisions

Entrepreneur Network Partner Ashley Crouch sits down with the Managing Partner of Guardian Insight Group and Angel Investor, Keith Koo.

Why this Popular Web3 Esports Game Was Designed with a Play-to-Earn Model

The Chief Product Officer of MonkeyLeague discusses his company, why monkeys are all the rage for NFTs and gaming, and his advice for developers.

Discover Entrepreneur Series

Whether you need advice on how to get your business off the ground or you’re just looking for inspiration, our video series have something for everyone. Browse our library below to find a series that speaks to you and your interests.