The Venture Intelligence Blog

For every reasonably famous (as against "successful") online services business model in the US, there is a copycat being created - and venture capital funded - in China. I'm however not sure what the exit model for VC backers of these copycat ventures are going to be. Do the investors expect the "originals" from the US to come and acquire these companies? Not likely, going by Google's recent sale of its entire in its Chinese competitor (and search market leader) Baidu.com for $63 million. From the Reuters report (emphasis mine): "We have disposed of our modest investment in Baidu," Google spokeswoman Debbie Frost confirmed. " It has always been our goal to grow our own successful business in China and we are very focused on that ," she said in an e-mailed statement. ...Google, which acquired its stake in Baidu in June 2004 for $5 million, was once considered a potential acquirer of Baidu. At the time of the August 2005 IPO, Google's s...

From the Press Release : The University Venture Fund (UVF) announced today it has achieved a final closing of $18 million in funding, an unprecedented amount of capital for a student-run education-based business program. UVF is one of only a few business school venture capital funds, which teach students entrepreneurship by investing in risky -- yet potentially rewarding -- startup companies rather than in safer stocks of public corporations. UVF is collaboration between students, the University of Utah's David Eccles School of Business and the professional investment community. Created in 2001, UVF broke new ground by modeling an aggressive, real-world approach to business education with a self-sustaining private equity fund in which students raise the capital, research the investments and pitch the deals. It is also the first fund to have a traditional limited partner relationship with investors who anticipate reasonable payback. One of Silicon Valley's highest-profile ventur...

KPCB's John Doerr interviews Thomas Friedman (of "The World is Flat" fame) on the Energy Crisis, its impact and potential solutions. Quite riveting stuff. Hat tip: Paul Kedrosky Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.

Stanford's Rafiq Dossani and TiE-SV's Asawari Desai have published a research report titled "Accessing Early-Stage Risk Capital in India" that aims to identify causes and recommend improvements for the lack of funding for innovative startups. While the authors are well intended, I don't like the idea of getting more government financing - whether directly or indirectly - into risk capital. Instead, I would prefer entrepreneurial and market-led initiatives like Seed Fund , Mentor Partners and Angel Investors (like Nadathur Holdings and Band of Angels) to succeed in filling the gap. Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.

So far, Vinod Khosla has done a lot of deep thinking and powerful talking about using Ethanol to "replace all our (America's) oil imports and become the centre of our transportation fuels economy". (See here and here to find out how forceful Khosla can be in his arguments and presentations .) So much so that Fortune magazine called him the "godfather of Ethanol". Now, the godfather is putting his money - via Khosla Ventures - where his mouth is. Khosla Ventures has tied up with Western Milling, California's largest grain milling company, to form Cilion which will produce ethanol using a variety of innovations. From the Press Release : Cilion plans to have 8 plant units in production by 2008 for a total of 440 million gallons per year capacity. The first three plants are expected to be in California. ...California Governor Arnold Schwarzenegger recently issued Executive Order S-06-06 establishing targets for the use and production of biomass products. The...

When it comes to clarity of positioning to entrepreneurs, true early-stage firms in India (ie, Rs. Lakhs rather than $ Million investors) would do well to look at the web site of US-based First Round Capital. This is what their home page has to say: We are not afraid of investing in pre-revenue companies - and often provide a company's first outside capital. As former entrepreneurs, we understand the challenges of launching a new enterprise. We look to take an active role in most of the companies we invest in. We believe our insight and expertise are far more valuable than our capital -- and we look for entrepreneurs who feel the same. The site's "Our Focus" page provides a listing of what the firm does and does not look for in the entrepreneurs they wish to meet. (Emphasis mine) Companies must provide a unique solution to an existing urgent need. We don't invest in companies which try to change consumer behavior or create a new consumer need. We look for compa...

Howard Morgan has a post on how he manages his own time ("by far the scarcest resource") between the various companies he invests in. I recommend keeping a sorted list of all the companies you are working on. I use a spreadsheet listing the company, CEO's name and phone contacts, ownership, quick assessment (A,B,C), and potential value (market capitalization - subjective assessment) and contact frequency (daily, weekly, monthly, board only). I try to allocate my time so that I touch base with each company at the appropriate frequency. This increases with both success and problems. If success, I try to help maximize it, since that will improve my overall return for investors, If big problems, I try to help solve or head them off. By doing both, I don't get psychically drained by focusing only on troubled situations. ...Does it work? It's a lot better now than it was when I started as a VC 25 years ago, even though I have 3 times as many investments. Technolo...