The Venture Intelligence Blog

Mercury News has discovered that ASP software companies (aka "software as a service" or "on demand" applications) are doing well. The article points out that Oracle CEO Larry Ellison made significant personal investments in such companies: he had provided the now public Salesforce.com with $2 million in seed money and has invested about $60 million into NetSuite, which plans to go public by year-end. 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.

Fortune columnist David Kirkpatrick gushes about how "the Internet is connecting the two countries in ways not conceivable a few years ago". My gut feeling is that the Indian and American economies are going to become ever more intertwined, and that is probably a good thing. For instance, I found India so enthralling that I could imagine living there someday. Of course, it helps that one vestige of the British colonial system is that most everyone in the country's commercial world speaks English. That makes it easier for a guy like me to get around in India than in places like China or Mexico, to mention two of my other favorite developing countries. It’s possible to live an extremely comfortable life in India on relatively little money. Someone in India living on $12,000 a year can have a cook, a driver, a housekeeper, and the benefit of all those low prices. I could imagine retiring here. It’s a comforting thought, at least, when I’m worrying about whether I’ve saved e...

Reuters has this interesting news item about how, thanks to booming stock markets, Indian companies are finding it easier - both from a valuation and control perspective - to go in for IPOs rather than seek private equity funding: Company owners who might typically have struck a private equity deal to raise cash for expansion are instead considering floating shares on a stock market that has risen 30 percent over the past six months. That is frustrating for private equity houses hoping to multiply record piles of cash by steering unlisted firms to prosperity. "It is tougher to close a deal now," said Darius Pandole, chief operating officer of IDFC Asset Management Co. Ltd... ...The IPO of Jet Airways (India) Ltd., which saw potential private equity suitors walk away due to differences over valuations, drew orders for 5.2 times the shares on offer at a price/earnings multiple of up to 21.5. Robust economic growth tipped to reach 6.9 percent in the year to March and rising inc...

Tom Evslin, Co-Founder & CEO of ITXC (acquired by Teleglobe in 2004), blogs on the ten lessons he learned about dealing with VCs. Some of the lessons have been featured quite a bit on other blogs: Lesson #1: there are times when raising venture capital is a bad idea. Lesson # 2: there are times when it makes sense to raise venture capital. Lesson #3: raise your venture funding as late as possible. Lesson #4: pick your VCs well. Lesson #5: ask VCs about their firm’s “exit strategy”. Lesson #6: look for VCs who can and do distribute. When the time comes for a VC to liquidate some or all of its position in your company, it can usually either sell the stock outright or distribute it to its LPs. I believe that distribution is better for the company than an outside sale. For one thing, it doesn’t send the same signal to the market as a huge sale by an initial investor which may have to be reported publicly depending on how recent your last equity event and the size ...

As a stock market investor, I used to pray every time I sold a company's share that it never again reached that price again. Unfortunately, the price at which I sold was most often the starting point "for a major bull run", as those analysts say. This was a strong motivator for me to move to mutual funds. (There is no way anyone can get me to name the companies whose shares I sold sickeningly early and definitely, no way will I let on at what price I sold.) Given this, I was fascinated when I chanced upon, at US-based venture fund Bessemer Venture Partners' web site, a detailed list of companies that the firm declined to invest in, and "each of which later blossomed into a tremendously successful company". "Our reasons for passing on these investments varied. In some cases, we were making a conscious act of generosity to another, younger venture firm, down on their luck, whom we felt could really use a billion dollars in gains. In other cases, our partn...

Tom Evslin writes on the attractiveness of "flat-rate" or "all you can eat" pricing to both consumers and service providers: If you can find a way to price a service at a flat monthly rate, you can make a better profit per customer and attract more customers than if your pricing is based on reading a meter. You also save a fortune in detailed billing, dispute resolution, and issuing credits... ...When we started AT&T WorldNet Service, we borrowed that idea and popularized it with the still hugely powerful AT&T brand behind it. Some said we’d go broke; others that we would ruin the Internet. To hedge our bets, we also offered a metered access plan. We didn’t want to lose out on people who planned to spend less that $19.95 per month. To our surprise, people typically converted themselves from metered access to subscription when their monthly bill was around eleven or twelve dollars. And their usage didn’t spike after conversion. People were paying a pre...

Badri Seshadri, a co-founder of the popular online cricket portal Cricinfo.com, will be leaving his position as Managing Director of Wisden CricInfo-India in April 2005, reports Mediaah! . Seshadri plans to focus on building his new start-up, New Horizon Media Pvt. Ltd., which is into regional language publishing. Extracts from Mediaah's interview with Seshadri: The plan is to create content in regional languages - with the content in the form of printed books, audio, CD, online (but subscription-based) etc. We are starting with Tamil (as I am familiar with this) and are looking at aggressively expanding to other languages... ...Where is the quality, knowledge driven , local language content on the web at this stage? Even amongst books that are published, there is a vast difference between books published in English and those that are published in local languages. Also an average English book is extremely expensive. The regional books are, on an average, priced one third of an Engl...