Finance advisory in Madurai | Financial consulting in Madurai

 

Why venture capital is important for cities like Madurai

The buzz around startups and high valuation have come to small towns. Investors are seeking to explore the startup space in the never seen areas. They are looking to invest in innovative startups in tier-2 cities where entrepreneurs can thrive in their own ecosystem and go beyond. For startups in tier-2 cities that have crossed initial stages, startup accelerator or venture capitalist becomes the saviour.

Entrepreneurs with their extraordinary business idea seek seed funding to set up their operations. The seed capital investor can turn into a venture capitalist at some stage if they feel the business is scalable and profitable in the future.

Venture money plays an important role in the next stage of the innovation life cycle, especially in the period where a company begins to commercialize its innovation. Venture capital is not long-term money. The idea is to invest in a company’s balance sheet and infrastructure supporting it until it reaches a sufficient size and credibility. So, that it can provide liquidity. In precise, venture capitalist invests in an entrepreneur's idea, nurture it for a short period of time and then exits the company.

Tier -2 cities like Madurai have the potential opportunity to grow in the established clusters. Investors are attracted to tier-2 cities because of the action ground, customer segmentation, market fluidity and growth trajectory. Investors are attracted to Madurai city where startup entrepreneurship has picked up in the last five years. Earlier for those looking at entrepreneurship in Madurai, especially in tech, Madurai has too little to offer in terms of mentorship, networking and funding. But today, there are venture capital firms and the investors have tented in Madurai to encourage young entrepreneurs, first-generation entrepreneurs with the help of HNIs in Madurai. The catastrophe of the pandemic has further helped startups gain a talent pool in the local ecosystem.

Tier-2 cities especially Madurai have the grace of infrastructure facility, operational resources, assets, capital and talent pool. Every essential resource is readily available for entrepreneurs to establish their ventures. Madurai has been a fertile landscape ever since the startup ecosystem punched. Non-metro cities have every required resource except the capital and strategic planning for building the brand and propelling it globally.

Venture capital in Madurai can be simply classified on two terms – financier, and investor. Venture capitalists don’t just lend money, they travel with you through all phases of business navigating the path and focusing on growth rather than profit, while financiers expect immediate profit and don’t share knowledge. Small businesses and SMEs can survive only if they rethink their strategy and come out with new business models. To contour this, business model consultancy in Madurai will help you opt for innovative models suitable for your business and industry. Clearly, the value at the stage of an angel is not about just money, it is about the intelligence and how VC helps in building the competitive edge.

Tier-2 and tier-3 cities in India have a very big talent pool, marketing and an untapped market as people tend to operate more in tier-1 cities. The penetration of technology and international exposure has made tier-2 markets surge up in a big way. There is an advantage of reverse brain drain in Madurai, as people have promptly moved from tier-1 to tier-2.  The next big thing will be tier-2 cities as per the investors. So, there is a well-set position of accelerators, incubators, partners, advisors, and mentors in Madurai positioned to propel the startup ecosystem from tier-2 city with the help of venture capitalists.