Archive for October, 2006

TiECon Delhi underway

It was an interesting day at TiECon Delhi today. Some quick observations:

1. VCs are everywhere! I think there were more VC firms in presence than aspiring entrepreneurs! This is of course great news for the local startup scene. VCs were lamenting on lack of quality entrpreneurship. A few moderators and speakers took light hearted digs at the “vulture” capitalists. All in good fun!

2. Mobile and consumer internet remain dominant ares of interest in both VC and startup circles.

3. Web 2.0 and KPO are the latest buzzwords. Everybody is using those terms (I know I am myself guilty of hyping the former!)

4. I was impressed by the concerted effort that Orissa is making as a state to attract investments. I was also surprised to hear that more than 11% of all FDI flows in via Orissa!

5. Movie stars Anupam Kher and Satish Kaushik announced the launch of their new movie production house. I got a chance to talk 1-1 with Mr. Kher! They are looking to raise money for their new company. Mr. Kher and Mr. Kaushik drove across the point that the Indian film industry is making a very conscious effort to become more professional in its approach. Mr. Kher categorically stated that today not a single movie star accepts or demands cash renumeration. Impressive!

6. TiECon is one of the best conferences for networking. Though I am noticing that ultimately its the same usual suspects you run into in all conferences! I think after attending a dozen or so conferences, I will run out of new people whom I can meet up at such events :)

TiE-Canaan Entrepreneurial Challenge

At the TiECon Delhi 2006 today and tomorrow, Canaan Partners will be launching Entrepreneurial Challenge in partnership with TiE. It is an attempt to identify and empower tomorrow’s businesses. It has been my experience that most business plan events end on the day the competition ends. By bringing the right partners in place, we will attempt to provide mentorship and capital support to businesses, and try and make the event finals a starting point rather than a culmination.

We have been fortunate to partner with TiE to leverage their expertise around mentoring companies, and to get a stellar jury in Mr Raman Roy, Mr Pramod Bhasin, Mr Saurabh Srivastava and Mr Mahesh Murthy. We are looking to also bring in other potential financing partners, besides Canaan itself, to ensure that this event can make a difference.

In line with our objectives, we are also looking to attract entrepreneurs for whom the Challenge is not an end goal in itself, but a resource that can help them create tomorrow’s leading businesses. Our selection criteria will include practical considerations around the business, and their ability to take off. We will entertain both startup businesses, and pre-existing businesses which have potential for high growth. Entries are invited through Canaan and TiE New Delhi websites from Nov 1st to Nov 15th.

Update: INSEAD and Evalueserve partner in TiE-Canaan Entrepreneurial Challenge – The winners of the TiE-Canaan Entrepreneurial Challenge will be hosted by Prof Phil Andersen of INSEAD, the leading entrepreneurship school in the world, at their Singapore campus, to have a case workshop on the global potential of their businesses. This brings unparalleled benefits to the entrepreneurs in scaling their businesses with a global perspective. Evalueserve, the leading business research firm, will partner to provide feedback on all submissions in an objective and informed manner.

Update 2: Band of Angels comes in as investor partner – The winners of the TiE-Canaan Entrepreneurial Challenge winners seeking angel investment will get an automatic sponsorship to the Band of Angels, India.

Opportunity for start-ups to demo their product to VCs – Bangalore, Dec 12

As part of its Mobile VAS Connect event on December 12, 2006, Venture Intelligence is providing opportunity to select companies to showcase their technology products to an exclusive audience – consisting of Venture Capitalists, Investment Bankers and experienced entrepreneurs – in the form of demos.

Companies that have developed a technology product in-house AND are planning to seek VC funding within the next 12 months are welcome to apply to demo at this exclusive event. More information is available at http://www.ventureintelligence.in/demo.htm

(Please Note: There is NO FEE to apply or demo at this event.)

Do forward this message to any product companies that you think might be interested.

Thanks & Regards

Arun

Joining a pre-VC startup

Here is a post I wrote about joining pre-VC startups:

http://sameerg.wordpress.com/2006/10/25/joining-a-pre-vc-startup/

Indian local search gets hot with the launch of Guruji…

The Indian internet landscape is getting more competitive by the day. Not only is it widening in breath, it is also getting deeper. Search engines have traditionally been at the heart of how the internet works, and we now have multiple local search engines to choose from. The latest (and most promising) entrant to this field is Guruji, which launched last week. Read ahead….

Diwali wishes

On this diwali day, wishing that entrepreneurs and VCs alike continue to listen to their conscience and shun arrogance.

Allianz report on Climate Change and the insurance business

Here’s an interesting – and sobering – report by insurance giant Allianz and the World Wildlife Fund which basically says that that the insurance industry needs to do more to address the growing impact of climate change-induced damages — and the resulting insurance claims.

We’re going to see much, MUCH more of this in the very near future, as insurers reel under the impact of claims due to “acts of God” – a term that, in this context, has all the ironic weight of Karl Rove’s worst excesses in the service of Big Business.

Do you really need an investment banker?

US-based entrepreneur-blogger Fabrice Grinda strongly recommends that any entrepreneur – even if he/she is a “former investment banker or someone with significant M&A experience” – should use a banker when selling a business. (I think this applies when raising Private Equity/Venture Capital as well.)

From Fabrice’s post:

(Avoiding conflicts with the buyer) is the single most important reason to use bankers. Negotiating a sale of a company is one point in time at which your interests are not aligned with those of the buyer. It is very easy for the negotiation to turn acrimonious.

The sale of the company is not the end game, but only one step in its development. You will have to work with the buyer for the foreseeable future and must thus maintain a good relationship with him.

Whether negotiating the price or the details of the stock purchase agreement (SPA – representation and warranties, etc.), I always let my lawyer and bankers take the lead in the discussions. This way I can blame everything on them – they are greedy and difficult while I am the reasonable guy willing to make compromises.

Speaking from the context of a US-based VC, Brad Feld thinks entrepreneurs should use an agent if they raising late-stage capital, but go direct if they are raising funds for a start-up.

From Brad’s post:

Many early stage VCs – especially those that are in saturated geographies and see a lot of deal flow – don’t pay much attention to deals that are promoted by an “investment agent.” I know a number of folks who simply “hit delete” on an email (the virtual equivalent to tossing the physical PPM – the document most agents insist on putting together – in the trash.) In the early stages, the entrepreneur is by far the best fundraiser for his company and there is a knee jerk negative reaction by many VCs against early stage deals that “require” an agent. At the early stage, an entrepreneur is much better served by finding an advisor (or set of advisors) or angel investor that has good VC connections and fundraising experience who can get actively involved in the company as advisor, board member, consultant, or even chairman.

Later stage companies and larger capital raises are a different story. The universe of later stage investors is very dynamic – consisting of corporate (strategic) investors, high net worth individuals, private equity firms, and hedge funds – in addition to later stage VC firms. Many firms enter and exit the market regularly for a variety of reasons (e.g. a number of hedge funds have recently started doing what traditionally look like late stage / mezzanine VC deals). An agent who is active at raising later stage capital will typically have some relationships with folks currently in the market, can run the drill of identifying the primary suspects for the entrepreneur, and can help manage what is typically a more complicated and less structured financing process (e.g. there often isn’t a clear lead investor in a later stage deal.)

Lessons from Japan

This was not supposed to be my first post on Venturewoods. But India’s soccer game against Japan at the Salt Lake stadium in which there was a power failure and a dog ran on the ground in the middle of the game made me wonder if something like this could ever happen in a game hosted in Japan. I can also not expect a less than perfect product from Toshiba or Toyota. How is it that this small nation became the benchmark for quality and efficiency?

While no doubt the Japanese quality control systems and processes have a big hand to play, I believe at the basic level its about Awareness, Pride and Simplicity. (I am not trying to preach. I am learning myself)

Awareness:
What we and our work represents and the impact it can have. Today when the entrepreneurial activity is on its highest, are we Indian entrepreneurs aware of this? Are we aware how our work can influence not only the technology sector we are involved in but also the social and economic scenario of a country that has been looking for a chance for a long time.

Pride:
This one is simple. The roads should be clean and the user interfaces the best – Because they are Indian!

Simplicity:
In doing your small bit in the best possible manner and also in ensuring the benefits reach the end customer in the simplest possible manner. “System” is a word used very often by Japanese restaurants, gyms, bars, cell phone application companies and any other service organization. In not more than 3 straight forward steps it explains everything to the customer. The same simplicity is seen in a Japanese person or organization accepting its limitations and offering only what it can deliver best.

I believe we have a chance. Today when many of us are building (or thinking of building) companies, we can also rebuild a nation. I for one do not believe that “Social Entrepreneurs” should be a separate category. What were your feelings when you started (or now when you are thinking of starting) your company? What is your main driving force? What values should be at the core of new Indian startups?

Dog at Salt Lake:

How does the world feel

We Feel Fine is a site that looks at postings made to blogs around the world every 10 minutes and analyses them for feelings. It then presents this data in an applet that can be used to slice and dice this data by attributes like feeling, place, weather and gender. Makes one think.

It is fascinating that there is a constant global conversations happening that can be programmatically consumed. The implications of user generated content and its consumption are very interesting. I would love to hear of any other non traditional types of content, use or general musings on this subject.