Jia Jain was devastated. In his business, either you have it or you don't and the judgment comes pretty early. After all, he’d seen so many swanky restaurants come up on busy streets and as many vanish without a trace. Now, his own fine-dining restaurant idealistically named 1947 seemed to be headed towards a painful closure, people didn't come.
He didn't turn to his parents or brothers for solace. They were in far-away Assam and he was trying to make it big in Bangalore. In fact, he hadn’t even told them he was starting a restaurant he was planning on surprising them.
Instead he went to Chenraj Jain.
Jain, no relation to Jia Jain is 50 and an investor in the restaurant. Jia Jain had gone to a university run by Chenraj Jain, and after completing his studies there, he was encouraged by Jain to start his own business. He funded, advised and supported him. With his own parents far away, Chenraj Jain was like a father-figure to Jia Jain.
When Jia Jain approached him with his problems, Jain listened with patience. And then he spoke about the nature of restaurant business, and the need for patience and perseverance. Jia Jain, however, was worried about the mounting losses. Wouldn’t it be wiser to close the restaurant down, cut the losses, and move on? Chenraj Jain told him not to worry about losses. "The losses are all mine, the profit is yours. Just go for it Jia," he said.
In the world of Indian entrepreneurs, there is a yawning gap between the traditional and the modern. In small towns across the country, young entrepreneurs depend on a mentor-mentee relationship with seniors of their community while setting up businesses. They look up to them for motivation, guidance, support and funding. The seniors are happy to provide the same, in part because they too benefited from such help during their early years and in part as an obligation to their community.
For instance, in Sivakasi, a printing and fireworks hub in Tamil Nadu, the first major order for a new entrepreneur who sets up a printing press typically comes from a senior businessman from whom the entrepreneur learned the trade.
This is in contrast to the venture capital model made popular by Silicon Valley where valuation, due diligence and business models are everything.
The investors have definite ideas about return on investments and they never enter without an exit strategy. For their part, the entrepreneurs are happy to take help from a venture capitalist (VC) and tap into his network. But they usually don't appreciate too much intrusion. Many second-time entrepreneurs refuse to have anything to do with VCs. Hurt by the cold formality of their approach, once is one time too many for them.
Chenraj Jain is trying to fill the gap between the traditional and the modern approaches. In the past six to seven years, he's incubated over 40 businesses, guided by instinct rather than valuation models. He is paternalistic towards his entrepreneurs and provides support through his social and business networks. Together, the businesses he helped create make over Rs 147 crore in revenues every year and employ 3,500 people.
Now, he wants to scale up and take the number up to 350 businesses by 2015. In many ways, Jain, who lives in a joint family of 11 in Bangalore’s Cox Town, is like the senior of a community. He's propelled by a sense of loyalty and obligation to support young entrepreneurs; except that his 'mentees' are drawn from a diverse background, cutting across religions, castes, regions and languages.
For Jain, a philanthropist involved with charitable institutions like the Mahaveer Jain Hospital in Bangalore, angel investing is where his family, social and business values converge.
Mohandas Pai, till recently a member of the Infosys board, says, "He is the Indian version of an angel investor with a lot of mentoring and support, where you treat it as a family business and the entrepreneur becomes part of the family. It is not like the Western model of high growth and high return. Here, the person who is mentoring is more important than the investment."
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