Technology, Venture Capital, Private Equity

Perspectives from an Indian VC

Archive for the ‘VC’ Category

“Investepreneurs” – The new VC model in town

Posted by Arun Uday on June 6, 2007

For some time now, I had intended to write about the tectonic shifts that the VC industry is currently undergoing. These shifts are the consequence of the changes in the base foundation on which the VC superstructure itself stands on, which is – the technology industry itself. Industry pundits, management gurus, entrepreneurs and VCs alike have been writing and debating on whats now come to be known as the “broken VC model”. The discussions particularly reached a frenzy on the blogosphere when one of the revered VC firms – Sevin Rosen, which is credited with funding the likes of Compaq and Lotus amongst others stopped midway through its fund raising exercise and returned the monies to investors citing “fundamental structural problems” in the Venture industry.
The crux of the issue here is what can be termed as the “Commoditization of the technology industry”. This commoditization has been happening at two levels:
a) At the level of infrastructural building blocks of the tech industry viz. h/w, s/w & bandwidth, and
b) Commoditization of skills, referring to a glut of qualified personnel, who understand the technology industry well enough to be able to take on the role of a VC.
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Your friendly neighbourhood VC

Posted by Arun Uday on May 10, 2007

I hope to write a little bit in future posts on some of the changes that are taking place in the VC world and how VCs and VC models are evolving in response to those changes. In this post, I’d like to talk a little on the location of portfolio companies that VCs like to fund.
I remember the first time I heard the term “Venture Capitalist” was nearly a decade back on a TV channel that was dedicated to technology (which has since gone bust), which telecast a talk show featuring Ajit Balakrishnan of He was talking about the importance of an eco system and how KPCB, which he described as the pre-eminent VC firm had a motto that read – “We don’t fund companies which are more than an hour’s drive away from our office.” Then, at some point, that motto for most VC firms became “We don’t fund companies to which we can’t fly down to in a couple of hours.” And the latest we have, partners tarveling across the globe to sniff out interesting opportunities – think KPCB’s Ajit Nazare, who was an active investor in Infoedge. Personally, I feel, proximity to portfolio companies helps. Modern communication technologies notwithstanding, there’s nothing to beat a face to face meeting or direct personal interaction.
However, having said that, I guess there are a few things that have happened, which have led to VCs going beyond the hallowed precincts of Sand Hill Road and “venturing” into newer geographies (India and China being the most prominent ones). The most obvious one is that VCs are following the old principle of any business, which is to be where the market is. Blockbuster hits like Baidu and Focus Media in China or Bharti Telecom in India, which were all built with VC/PE money, demonstrate the potential of such emerging technology hotbeds as India/China. Read the rest of this entry »

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