The Venture Intelligence Blog

Will Price reports from Microsoft's VC Summit in Mountain View on what MSFT - according to its CEO Steve Ballmer - looks for when it considers acquiring a company: * technical innovation with impact * protected IP (patent portfolio) * market understanding * engineering excellence * alignment with sales capacity (can you sell it?, do you know how to sell it?) * timing and tenaciousness * understanding of value chain and how to partner to win Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

Will Price reports from Microsoft's VC Summit in Mountain View on how MSFT CEO Steve Ballmer does not carry a Blackberry or a cell phone during the work day. He does not permit meetings where people use laptops or notepads to check and write email. His goal is focused interaction, drive to a solution, and then break up the meeting and move on. He recounted a story of where a major company CEO interupted him in mid-sentence as his Blackberry vibrated, only to tell him after checking that Scott Peterson had been convicted. The CEO then had to ask Steve where they were in the conversation. Will feels this is habit of "switching off" - cell phones and sundry other devices, that is - would also serve VCs quite well: The VC industry suffers from very short attention spans, and I pity the CEOs who need to compete with VCs checking random emails and text messages during their pitches. I, guilty as anyone at times, took a lot from Steve's views on self-discipline and respect ...

Seth Levine of Mobius VC has a few tips for MBAs and wannabee MBAs keen to join the Venture Capital/Private Equity industry: Understand the math. The partners are quite literally taking money out of their own pockets and giving it to you. Rationally, they will only do this for one of two reasons – either you are significantly impacting their lives in a positive way that makes the trade-off worthwhile for them (you cost less than the marginal life benefit they get from having you around) and/or you will help create more carry (i.e., they can manage more deals with you around and therefore deploy more capital; you have a skill set that will positively affects the portfolio, etc.). If you fail to do these things you are just eating up management fees. There is a grey area here for Principals (called VP’s or SVP’s at some shops, junior partners at others) who are managing their own deals as well as supporting partners’ deals. Get close to VC’s. The road to becoming a VC follows many diffe...

Recently, we have tracked several appointments and movements in the Indian VC/PE industry in our Venture Intelligence India newsletters . There has been a lot of churn at India-based firms as well as US firms who have been in India for a few years now. Plus, quite a few new US and European entrants into India have recently appointed country managers. I've been wondering whether VC firms use HR services firms for hiring partners/country managers and if yes, whether HR services firms understand this unique industry well enough to do justice to it. Which is why this interview with Charley Polachi, Founder and Managing Partner of Polachi & Company a Sherborn, MA-based executive search firm focused on the venture capital, private equity and technology markets, caught my attention. Venture guys do deals, but they don’t do staff. They are inherently networked and they do much of the staffing for their portfolio companies, but the fact remains that the glory of the business is not abo...

Howard Anderson's article in Technology Review magazine on why he belives the VC business - at least, the IT-focused part - is no longer a great one is attracting a lot of attention and comments. Venture capitalists view themselves as pragmatists, but if they think the dynamics of the business haven't changed, they're as self-deluding as the next person. Ever wonder what we did for a living in early-stage venture funding? I bet you think we spent the day searching for the next insanely great company. But we spent most of our lives in endless meetings with people who were lying to us: scientists who swore that their patents were solid and entrepreneurs who insisted that they had no competition. We lied right back at them: said our money was different. That was the old way, and it was tons of fun, and we all made too much money. I'll miss it. But now the markets are too rational, and the returns are too small and uncertain. So, time to leave. Arun Natarajan is the Edito...

Stephen Castellano has a post on which elements of US equity research can be outsourced to India: While I do not think every function within equity research can be outsourced, I believe there are many areas that can. Currently in an analyst’s typical 12-hour work day, there are plenty of “back-office” functions that are left unfinished. If a senior analyst can trade at least one associate for six outsourced staff to cover non-time sensitive and “industry agnostic” work, I think he would gladly do so. If I were a senior analyst with a staff of four associates, I would replace two of them with 12 dedicated outsourced staff (on an attrition basis, of course). The first thing I would ask my outsourced staff would be to audit my Excel models and think of ways to improve them. Other tasks I would have them do would all be related to providing background research material like a specialized news clipping service – from creating spreadsheet models and databases, to simply taking and indexing ...

Jeff Clavier posts on Microsoft's annual meeting with Silicon Valley VCs in their "own backyard": Every year, Microsoft hosts a VC Summit involving 100+ Microsoft senior executives and 200+ venture capitalists with a stated objective of sharing the strategic roadmap of the company, highlighting the famous "white spaces" in their plan (i.e where they don't plan to invest R&D efforts in the next 12 to 24 months) and creating a unique networking opportunity. The latter is the most obvious benefit of the event, because of the concentration of senior executives (VPs and Corporate VPs) leading the different business lines. Whilst there is a large proportion of Silicon Valley VCs, a number of East Coast and European ones also make it to the Mountain View campus. Most large technology vendors have VC relationship programs, facilitating access to corporate resources for partnerships, development support and M&A. But the scale at which Microsoft does it is un...

Venture Intelligence India is the Blog of the Day for May 19 at BlogStreet India . Not sure how this works, but am nevertheless happy to note from their profile information that Venture Intelligence India has a blog rank of 647 (out of 1642). Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

The efforts by Silicon Valley Bank and TiE in 2004, in bringing a long line of US VCs to visit India, are bearing fruit in 2005 as actual investments in the country. Following the Battery Ventures led $15 million third round investment in telecom products firm Tejas Networks comes Nokia Ventures $3 million investment in telecom R&D firm Sasken and Bessemer Venture Partners' $3 million investment in automobile components maker Rico Auto. Here's hoping that this highly positive trend continues and there is a "trickle down" towards early-stage investments as well. Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

New Vernon Capital, a New Jersey based fund founded by former Merrill Lynch global executive VP Arshad Zakaria, has stepped up its investments in India. In May, the fund's Mauritus based investment arm, New Vernon Bharat, invested $5.4 million in Gurgaon-based publicly listed automobile components firm Rico Auto Industries Ltd and $7 million in Jagran TV Pvt. Ltd., the broadcasting arm of Kanpur-based publisher Jagran Prakashan. Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

Extracts from a report on a recent panel discussion organized by IBD Network on the US VC funding scene: * Where venture dollars are going (consensus): Open Source software, wireless, digital media, and consumer-facing technologies; other areas (no consensus): VOIP, on-line business services, Internet 3.0, analytics/business intelligence, enablers for on-demand computing * Areas to avoid: security, enterprise software; digital media is probably on the cusp of being over-invested * Do more for less: If a start-up might have commanded $35 million in total funding three years ago, VCs expect them to do it for $20 million today * Companies that get funding: An experienced, hungry, and patient management team, clear market opportunity, defensible IP, a capital-efficient model, and an unrelenting focus (from CEO on down) on getting the sale Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View s...

Businessworld has a profile of Rajiv Lall, the newly appointed CEO of Infrastructure Development Finance Corporation (IDFC) and former Managing Director at Warburg Pincus. Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

Chryscapital, CitiGroup and FMO-Netherlands have invested into this Chennai-based listed truck financing firm. Why? Businessworld explains in a recent article: The Shriram group has three truck finance companies - Shriram Investments, Shriram Transport Finance and Shriram Overseas Finance. Together, they have a combined equity of Rs 117 crore. Their combined net worth is Rs 360 crore. But the group has managed to raise and lend Rs 6,000 crore. (That's a debt-equity ratio of 1: 17). How? Neither Thyagarajan nor his three companies fully own the Rs 6,000 crore they have lent out to the trucking sector. Half the funds belong to several others including Citicorp, UTI Bank, ICICI Bank and ABN Amro. The Shriram group merely manages the money. To be precise, it manages Rs 3,000 crore on behalf of eight banks. It lends this money to truckers, collects the interest and principals every month and passes it back to the banks. "This is outsourcing. The Shriram group has been practising i...

SiliconValleyWatcher conducted a short interview with M.R. Rangaswami, co-founder of Sand Hill Group, on the sidelines of Software 2005, Sand Hill's annual enterprise software conference: [On trends at the show…] The software-as-a-service sessions have been jam packed; that wasn’t the case last year. This makes me wonder if we’ve seen the last of the $1bn software company, whether any software company will ever again reach that level of revenues. [On startups…] Greg Gianforte’s session on how to bootstrap your company was packed. Next door, the venture funding session was packed too! That is so very typical of Silicon Valley. About 50 percent of the people here at the conference are from startups. Sand Hill's web site has recently been relaunched as an enterprise software e-zine. Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence I...

I have blogged earlier about the good PR that Silicon Valley Bank's Bangalore office is getting in the media. Well, here's more PR for the office, this time in the Wall Street Journal : Say you're a Silicon Valley executive assigned to set up an offshore software-development office for your company. You touch down in this high-tech hub and check into a luxury hotel. By morning, you realize you're not sure how to incorporate an Indian company, open a bank account, get legal advice or even find office space. Not to worry: These days, you can just call Arman Zand. Mr. Zand, who works here at a unit of Santa Clara, Calif.-based Silicon Valley Bank, enjoys a growing reputation as a go-to guy for start-up companies trying get a foothold in Bangalore, a booming city that has emerged as a global technology hot spot -- albeit one with sporadic power outages and really bad roads. For Silicon Valley Bank's U.S. clients who are opening offices in Bangalore, the stocky, 27-year...

From a Red Herring article: Clearstone (Venture Partners) has tapped into the Indian entrepreneur community via venture partner Vish Mishra and TiE, a worldwide entrepreneurship network with a mostly Indian membership. Managing director Jim Armstrong estimated that half of the firm’s deals come through some TiE-related connection. Given that Clearstone's latest fund size is $200 million, the firm fetched almost $100 million via the TiE network. Wow! That's surely adequate incentive for anyone in the venture community to attend the 2005 edition of TiEcon , the annual conference organized by TiE's Silicon Valley chapter (May 13-14, Santa Clara Convention Center & Westin Hotel, CA). Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.