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Showing posts from August, 2007

Why are VCs arrogant?

In a posting on the rising popularity of VC Rating site, Jeff Bussgang explains why.
Why are VCs often arrogant? Is that what they teach us at VC breeding schools? I think some of it is just the nature of the business. As I mentioned in my post “Dr. Seuss and The Land of No”, VCs have the job of saying “no” hundreds of times for every “yes” that they fund. To be efficient, they are trained to say “no” quickly and not waste time on projects they simply don’t like or don’t believe in. Whether you believe in a project or not is such a subjective standard, that it can always be open for debate and argument. But VCs can’t afford to have debates and arguments about projects they don’t like, they must quickly, unemotionally move on to the next one.

Entrepreneurs, on the other hand, are emotionally attached to their projects and wired to believe that what they are working on is the absolute best thing going on – after all, they chose to work on it at the expense of every oth…

TiE-ISB Business Plan competition

Extracts from the press release:

TiE-ISB Connect is back with its highly successful business plan competition. Entrepreneurs are invited to submit a maximum of 5 page abstract of their business idea to TiE-ISB Connect Committee to qualify for an elevator pitch with leading Venture Capitalists in November. Applications for the 2007 business plan competition are available at The last date for submission of Business Plans is 31st August 2007.

The competition is designed to encourage entrepreneurs in the creation, start-up and early-growth stages of businesses. Participants have a chance to win face to face interaction with leading VCs and Business Leaders for finding capital and strike business alliances that will help them launch and grow their businesses. The TiE-ISB Connect '07 conference, organized by the TiE-Hyderabad Chapter and the Wadhwani Centre for Entrepreneurship Development at ISB, will be held at the ISB Campus on November 14-16, 2007.

Arun Nataraj…

Interview with One97's Vijay Shekhar Sharma

Venture Intelligence featured an interview with Vijay Shekhar Sharma, Founder & Managing Director of One97 Communications as part of the July issue of the US-IVCA / Venture IntelligenceIndia VC report. One97 is one of the pioneering start-ups in the Indian Mobile VAS space and recently raised its first round of funding led by SAIF Partners.

Some extracts from the interview:

VI: How were you funding the company until now?
VSS: We were the first company to put a revenue sharing model in place with operators. That gave us recurring revenue and made the company cash positive.

VI: What were your challenges in fund raising?
VSS: Two challenges: first, deciding on the network the fund could provide and second, the kind of size commitment they can make for future investments. A third factor was the comfort with the VC: what kind of team it was, the chemistry between team members, the kind of person who will come onto our board. The VC on the board becomes your everyday business partner.


Give your start-up the gift of time

Fred Wilson has a nice post, based on his experience with three of his investee companies, on how start-ups often take several years to fulfil their potential.
Time works for you if you have the patience to stay focused on the opportunity in front of you, if you have the tenacity to work through the inevitable hurdles you’ll face, and if you have the right kind of financial backers. Time allows you to recover from misteps, to build a team, to generate revenues, and even earnings. And when you've done all that, you'll have the wearwithal to choose when and how you want to exit from the business because you'll be selling a business instead of a team or a product or a feature.

So, if you are starting a company, prepare for a marathon, not a sprint. Take a deep breath. Commit yourself to the long haul. Let time work for you.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Ventur…

Alternatives to Venture Capital has a post on the "Top 25 Alternatives To Venture Capital".
Venture capital is not for everybody. For starters, venture capitalists tend to be very picky about where they invest. They are looking for something to dump a lot of money into (usually no less than $1 million) that will pour even more money right back at them in a short amount of time (typically 3-7 years). You may be planning for a steady growth rate as opposed to the booming, overnight success that venture capitalists tend to gravitate toward. You may not be able to turn around as large of a profit as they are looking for in quick enough time. You may not need the amount of money that they offer or your business may simply not be big enough.

Simply put, venture capital is not the right fit for your business and there are plenty of other options available when it comes to finding capital.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and network…

Starting a private limited company

Deepak Shenoy has put up a very useful post on the process of starting a private limited company in India - with a specific focus on creating a company that plans to have external investors.

He also links to a World Bank resource - - that summarizes the procedures and costs associated with setting up a business in various parts of the world. Here are the Bangalore and Chennai pages.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. View sample issues of Venture Intelligence India newsletters and reports.