The Venture Intelligence Blog

Engg. design cos. make a mark Indian companies have started to make a mark in the market for outsourced engineering design services, reports Economic Times. And it is not just large companies who get to play in this $7-billion. "Several smaller Indian software companies like Hyderabad-based Infotech Enterprises, Bangalore- based Plexion, Quest, Easitech, Geometric Software, Rolta and Axis are quietly working with global majors in the cutting edge engineering design space," the ET report says. The sector has also been receiving the attention of private equity investors. Plexion Technologies recently received a second round of funding from J.P.Morgan, while Quest is reportedly in talks with VCs like the Carlyle Group. Click Here to read the full report.

The case against export-led growth Exports are good. After all, we are competing against the world's best and winning. In software services, for example. Ajit Balakrishnan, CEO of Rediff.com, however cautions against ready acceptance of this "Export and succeed" mantra. Writing in BusinessWorld , Balakrishnan point to the boom and bust of Bombay's textile mills. According to him, the 1850s textile boom in Bombay was built on spinning yarn from Indian cotton and exporting it to China. However, then the Japanese stepped in with superior technology and took away the Chinese market. The Indian mills were unable or unwilling to invest in new labour-saving technology and once competition stepped in, were soon unable to pay even the low wages that they were providing their workers. The result: labor trouble and eventual demise of the mills. "Many of India’s future growth dreams are built on a strategy similar to that of the 1850s Bombay entrepreneurs. Wa...

What are VCs doing these days? Here's a Q&A extract from Guy Kawasaki's latest column in Forbes.com What are VCs doing these days? Are they investing at all or just goofing off? The top four lies of VCs are currently: "We knew this was coming." "We have lots of dry powder to invest." "We're doing more deals this year than we ever have." "We think this is a time to build great companies." Meanwhile, golf handicaps are plummeting. (If you want to check out the handicap of your favorite VC, go to http://www.ghin.com/lookup/index.html.) Did you say goofing off or golfing off? Mostly VCs are looking for companies with three "provens": Proven teams, proven technology and proven sales. Ideally, they'd like a team that's sold a company to Cisco for $7 billion, won a Nobel Prize with its technology, and is profitably selling $12 million worth of stuff a year. That's an early-stage deal. Unfortunat...

How VCs are "de-risking" their investments Venture capital is undergoing a radical change, according to an article in Fast Company magazine. "Forget home runs -- VCs just want to hit a few singles. We're seeing the emergence of risk-averse venture capitalists. Talk about an oxymoron!" it says. "The venture-capital paradigm that prevailed for most of modern venture capital's history is broken. The portfolio approach doesn't work today and, in my opinion, will not work for the next several years. On the whole, there will be far fewer home runs. And if you can't be sure of finding one giant winner, then you can't afford to pay for all the failures," says Daniel L. Burstein, managing partner at Millennium Technology Ventures in the article. So, oxymoronish or not, VCs like Burstein are "de-risking" their investment bets. The objective: More moderate successes--and fewer failures of portfolio companies. Here are a few ...

Forbes editor defends offshore outsourcing Michael S. Malone, the former editor-at-large of Forbes ASAP magazine, has advised Americans against making a "scapegoat" out of offshore outsourcing of services. "Suddenly, global terrorism is taking back seat to what is being billed as a new kind of "economic terrorism," the offshore movement of U.S. high-tech jobs to India (as well as China, Thailand, Indonesia, Poland, Costa Rica and Vietnam)," has says in his column for ABCNews.com. Naturally, he follows this with (the one and only) Forrester Research group's "prediction" that 3.3 million U.S. service industry jobs--including one million IT jobs--will move to other countries over the next 15 years. "The usual cranks on the left and right are angrily posting messages calling for economic war against India and solemnly mourning the impending death of the United States. And, of course, politicians are dealing with this scandal du jour i...