Sameer Guglani Quits SeventyMM; Morpheus Ventures On Their Funding Model
By Cerius Shah - Mon 14 Jul 2008 11:14 AM PST
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 ( http://www.instablogs.com, http://www.commonfloor.com) and third one is profitable (http://www.foodathome.in)
Posted in: JV & Investment
