Vivek Sinha of VCCircle writes that investors in India appear to have a bias towards entrepreneurs with privileged educational backgrounds and labels entrepreneurs who don't qualify as "have-nots". His piece argues plausibly that, based on recent deal statistics, the lack of a name-brand educational institution on an entrepreneur's CV makes it much harder for that entrepreneur to raise capital. He provides some amount of detail to substantiate this, which I encourage you to read and judge for yourself.
I have no problem with this line of thinking.
What irks me though is the use of the word "apartheid" to describe this situation and the objectionably prescriptive way he ends his piece:
[The] breed of ‘have-nots’ need to shrink if the Indian startup ecosystem needs to take flight.
Why should this be? I have several objections to this statement.
- Who says the Indian start-up ecosystem has not taken flight?
- If we pretend that it has not, how do we know that it necessarily will take flight if the mix of funded entrepreneurs changes?
- Every investor, whether angel or VC, is perfectly entitled to their own opinion as to who constitutes a fundable entrepreneur.
- VCs have an obligation to their own fund investors, not an obligation to society at large or to "have-not" entrepreneurs.
- "Apartheid" is an extremely objectionable term. It should not be used in this context.
- Perhaps most important of all: if Sinha (or anyone else) has objections to taking entrepreneurs' educational background into consideration before providing funding and believes that this leaves many equally good companies without funding, then let them put their money where their mouth is. If there is a missed opportunity here, surely someone will exploit it? Armchair advice not needed.
Possibly none of my objections above really applies and Sinha's only intention was to deliberately say something provocative to attract readership to VCCircle. I don't know why he would need to though -- VCCircle is an established source of information on entrepreneurship and venture capital in India.
To be clear, some of my own portfolio companies have entrepreneurs who would be considered as having gone to some of the best schools around. We have also funded entrepreneurs who have taken a different path. I don't see what any of this proves.
