Prashant: If you have to assign a monetary number to the full range of services that incubator provides, how much would it be per company?
Nandini: Less than $100,000.
Prashant: Can you share revenue numbers of companies before and after incubation?
Nandini: While India is a large and attractive market with opportunities in almost every domain, at the same time it is a challenging market for startups to operate in:
Prashant: Can you share investment raised by companies before and after incubation?
Nandini: Sure, here are some details:
But as mentioned, we focus more on revenues and profitability for first two years, and not fund raising.
Prashant: Based on your experience, what companies are good for you – those with good exit strategies or those that generate revenues and offer dividends?
Nandini: We focus on getting companies to generate revenues and get to a stage that they are profitable. We also deal with very early stage companies, so exit strategies and such are irrelevant at this stage.
Prashant: What is the typical return you seek, and over what period?
Nandini: We look a total return of four to five times across our portfolio. But I guess eventually we will see approximately 30% companies failing and giving no returns; 35% companies giving negative returns, and 35% of companies giving positive returns. Out of the last 35%, approximately of 15% companies come out as rock stars and give fifteen to twenty-five times returns.
Prashant: Overall, that’s a great deal of information about The Morpheus. What is one particular piece of advice that you would like to give entrepreneurs looking for incubation?
Nandini: Do your research. Figure out what to expect and what you want to get out of incubation. Align yourself with an incubator that suits you best. Things like being associated with a good organization, great names as part of team, and so forth, are irrelevant.
Prashant: One last question. What is the single most important thing that incubators could do to help businesses start generating revenues or increase revenues?
Nandini: Mentors should align themselves with the business’s goals and participate actively in helping the team achieve that goal on a daily basis. They should help the team build fast and sell faster.
Thank you for providing us valuable insights, and we hope that we 1M/1M will become a reliable sources for quality entrepreneurs in years to come.
[Entrepreneurs, note that The Morpheus is currently accepting application for Batch 5 of its business accelerator program, which runs from December 2010–March 2011. Apply here.]