Jia Jain was devastated. In his business, either you have it or you don’t — and the judgement 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.”
The Early Days
In some cases, Jain uses his own educational institutions as a captive market. If a school comes up in a new place, it creates demand for uniform, shoes, books, notebooks and even transport — and an opportunity for an entrepreneur.
(This story appears in the 09 September, 2011 issue of Forbes India. To visit our Archives, click here.)
Our country needs many many more entrepreneurs. We need more people like Mr. Chenraj Jain. Hopefully, the new government would also encourage entrepreneurship. Here is my take on entrepreneurship under the Modi Government. http://edubasket.in/blog/modi-and-entrepreneurship/
on May 24, 2014He is truly leader for everyone of us. He has changed my life 360 degree. Its been great honor to work with him. He is extremely positive about everything . He believes in standing for people. He always walks his talk. His potential seeing people beyond just a person is amazing. Sir thanks for being with us every time......
on Mar 12, 2012The article stands as a perfect testimony to Dr Jain.Having studied in his institute i have had the privlage to interact with him
on Dec 30, 2011Hi, This is true about Chenraj Jain, as I am one of the student from his entrepreneurship college. I would really love to work with him for ever for his ideology and motivational talks!! Regards, Sudhi.
on Nov 29, 2011Nice strory but would like to have direct e-mail correspondence with Mr. Chenraj Jain for his notion on philanthropist. We have different experience about one of the Jain group of institution which will be halpful for him to know on time. Thanks
on Oct 21, 2011We cannot trust whatever comes in media. I too had horrible experience some time back in CRCE on believing this story. I needed support to start new venture. They could have either rejected saying not interested or given address of concerned person to approach. Instead staff pointed to a peon and he couldn't understand what I said and pointed one more staff and in turn pointed manager of ladies hostel to approach in ladies hostel where got to know that manager spends most of his time in a bank building and finally got doomed as the purported manager was not there and the same cycle repeated once more and at last ladies hostel who pointed bank building gave up saying they too had no idea about manager. My view is are they bound to help us? No. then why should they humiliate us? I would be glad had they rejected my request soon after hearing instead making me to suffer.
on Feb 14, 2014awesome,wud be helpful for the budding enterprenuers.
on Sep 3, 2011A worthy story to cover. Idea to create small entrepreneurs to expand business is enlightening. A very good alternative for entrepreneurs to look for mentoring and funds.
on Sep 8, 2011