Bangalore: The Indian firms have been luring more venture capital with the start-ups being the most acclaimed attraction. The venture firm Sequoia Capital has already raised $725 million fund for investments in Indian start-ups and even other firms like New Enterprise Associates and the Mayfield Fund are towing the line.

As reported in The New York Times, initially the lack of proper startups made the investors venture into the older companies. But Parag Saxena, Chief Executive of New Silk Route says, "A little trickle of start-up money is coming in now."

However, Saxena adds that for the most part, the companies seeking venture financing in India have been middle- to late-stage companies, not true start-ups like those that get financed in the U.S. There are simply not enough start-ups to absorb the capital, so investors have focused on older companies. That is slowly changing.

Most of the venture backed companies were not highly focussed on technology as they produced products that use technology that has already been perfected in the United States, like digital cable and high-definition television. But this trend shall be a passe with the new firms taking to cutting edge stuff instead of duplicating the U.S. technologies. Moreover with big manufacturing plants opening in India, there will be greater utilization of the clean technology too.