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Sameer Guglani Quits SeventyMM; Morpheus Ventures On Their Funding Model

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Sameer Guglani and Nandini Hirianniah recently announced the launch of their Y-Combinator modeled Morpheus Ventures. Guglani had sold Madhouse for an undisclosed sum to SeventyMM around the same time last year. More on their funding model in the interview below:

CS: Are you completely out of Madhouse and SeventyMM now?
SG: Morpheus has been started by two partners: myself and Nandini Hirianniah. Both were us also founders of madhouse, so we have worked together as a team before. Nandini left seventymm a couple of months back and my last day as a Seventymm employee will be 31 July. Both us will be working full time on morpheus venture partners

CS: Are you going to relegate Morpheus to start-ups or build it into a more generic web consultancy?
SG: Morpheus will be be focused only on early stage startups, our goal is to work with teams who are 0-12 months old or may be even at the idea stage. Teams who can build scalable and fundable businesses

CS: Why the YCombinator model as opposed to an Angel or Seedfund?
SG: Because thats where we believe the gap is most wide. Today there is enough supply of capable entrepreneurs, folks who are taking the plunge – quiting their jobs, putting together a team, building prototypes and dreaming to build a big business. At the same time the supply of money to be invested in startups is also quite enough. Many VC funds, seed stage funds and plenty of angels. These guys are happy to consider investing in companies who are at the right stage, with the right team and the right model. So we add value to both the parties i.e. the entrepreneur and the startup investors using the morpheus/Ycombinator model. For about 4-6 months we work closely with the founders to build the right product, getting the right team, getting initial customer traction and have something impressive ready which will allow them to raise professional funding. To investors our value add is that we are helping in building high quality fundable startups,we will also be conducting demo events where all our portfolio companies will demo their products and the investors can interact with bunch of high quality startups.

CS: What value does Morpheus Venture bring to a start-up?
SG: For about 4-6 months we work closely with the founders to build the right product, getting the right team, getting initial customer traction and have something impressive ready which will allow them to raise professional funding. We make introductions to potential investors, partners, lawyers, accountants, domain experts. These are only few main things, the real collaboration will include many more things, needs of each startup are unique and we will adapt to them.

CS: What is the average equity you look at obtaining?
SG: Morpheus will be looking at taking 4-8% equity, there is absolutely no monitory fee that we charge. We are in for the long haul and willing to wait for 4-7 years, which a startup may need to each the exit point.

CS: What is the average exit period Morpheus is looking at?
SG: I would say average would be 5 years, assuming the M&A market continues to develop.

CS: Can you share some start-ups and their products with whom you have been working off late?
SG: “We currently have three portfolio companies, two of whom have already raised venture funding ( www.instablogs.com, www.commonfloor.com) and third one is profitable (www.foodathome.in)

8 Responses to “Sameer Guglani Quits SeventyMM; Morpheus Ventures On Their Funding Model”

  1. rajiv khemka

    Why on earth should new budding entrepreneurs put all their trust and faith in this venture !? And what about intellectual property rights !?? This is a sham !!!! Everyone .. please be very careful !

  2. We definitely need a Y-combinator like fund in India. Like both Rajeev and Neeraj mentioned it would have been better if it had been started by someone who has already proved himself.

    But, having said that – time will tell. If the folks at morpheus can make a difference to the start-ups they fund, that will be great for the Indian web industry.

  3. Rajeev

    While I agree with both Neeraj and Rajiv it is important that such incubators should show an example of success by themselves. However Sameer is looking to follow the path of Sharukh in Chak De where in he would work towards achieving that success by coaching a team.

    Good Luck

  4. @Neeraj: technology is only 20% of the game in most businesses, what is indispensable, is ability to understand market and morph accordingly.

    @Sumit: It has to the entrepreneur whose vision matters, not the investor. Though non-web startups are significantly different, the basic fabric of startup is the same.

    I think incubators like Morpheus can be the missing piece in Indian startup jigsaw.

  5. I dont agree with you Neeraj. Its not about any specific background one has to have. Its the vision that matters more. Also why do you differentiate between web startup and non-web startup.

  6. Neeraj

    this piece of news makes me sad. People who have not created any real web business are starting incubators to help incubate web companies. What a joke. Is selling out a dvd rental business (which didnt have great reach, was mostly offline, and whose online shopping cart can be built in a week) such a big deal? Had baazee guys or naukri guys started such an initiative, it would have served us much better. Thoughts?