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...