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Investment Banking Handbook & Directory - Updated Version

Venture Intelligence has published an updated edition of its Investment Banking Handbook & Directory.

The handbook is as an authoritative and comprehensive guide for both entrepreneurs and Private Equity / Venture Capital firms to choose Investment Banking Partners.

The directory section consists of an alphabetical listing of all active India-focused Investment Banks including contact name, address, phone numbers, e-mail and website details.

To download the Handbook, please visit http://www.ventureintelligence.in/ibdirectory.htm

Startup Lessons from Obama - By Sanjay Anandaram

The world exploded in media fuelled hyperbole on November 4th when Senator Barack Obama became the 44th President elect of the United States. How a black man (actually he’s half white) finally got to the most powerful position in the world became fodder for myth-making and over-the-top expectations. But what got lost in the frenzy, as often happens in cult-building, are the details.

How did a young (Obama’s 47), inexperienced (he’s a first time Senator with less than 3 years experience as a US Senator), half-black man with no pedigree take an established political structure (both in his own party as well as in the opposition) manned by very experienced and canny people and finally deliver a resounding victory? There are lessons that can be learnt especially for entrepreneurs around the world:

1) Understand the opportunity and the need: In 2004, George Bush defeated John Kerry by harping on the theme of national security. Kerry helped by being a less than inspiring leader. By 2006, the m…

"Time is the greatest enemy"

Chris Douvos, Co-Head of Private Equity Investing at The Investment Fund for Foundations, has an open letter to the CEOs of the portfolio companies of the funds he's invested in.
Indeed, the ingredients of any business are: ideas, people, capital, and time. And of those elements, time is the most immutable, the most obstinate, the most tyrannical. They’re just not making any more of it!

You have but one weapon against this cruel oppressor: focus. In good times, managers don’t have to focus as acutely because the creation of good stuff outstrips the slouching to disorder. The great all-weather managers, on the other hand, have to focus because they realize that time is really expensive and when the creation of good stuff slows, entropy lies in wait. Choose what to do and what not to do. Just choose quickly and be explicit about your choices.

We’re all in this together. Your success becomes my success (less, ahem, the GP carry) and I’m rooting for you. You guys are the beatin…

Sunil Mittal Interview to Knowledge@Wharton

Inspiring Stuff! Must see.

Couple of nuggets:

* It's a good idea to try and partner large cos.

* As a start-up, when there is a choice to be made between speed and perfection, always go for speed.



(Hat Tip: Pluggd.in)

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.

Underdog Advantages - By Sanjay Anandaram

The young CEO of the young company showed me an email from one of his senior team members. The email had a ring of anxiousness around it:
“ With so many big players now entering the market, I don’t know what we can do. All our customers will leave us. The bigger companies have more money, are far better known than us, have a national presence and have so much more experience. I think we should seriously look at an exit”
The company was a little less than two years old, had raised about Rs 2 crore about 18 months ago, the team had an average age of 26 and was one of the first companies in its market segment. I asked the CEO what he thought of the email and whether others in the company too felt the same way. He didn’t tell me what he thought but he was clearly perturbed. Others in the company too felt that it would be an uphill battle for them from now on and becoming martyrs in a battle with the incoming larger corporations didn’t appeal to them. The CEO was undoubtedly disappointed and…

Interview with NEA-IndoUS' Vani Kola

NEA-IndoUS Ventures has had a busy 2008 announcing investments in eight companies across sectors such as publishing outsourcing (PreMedia Global and Pressmart Media), software for educational institutions (Idenizen), online services (Seventymm), Communications Tech (Connectiva Systems and Bay Talkitec), Financial Services outsourcing (Basiz Fund Services) and waste recycling (Attero). Venture Intelligence’s N. Sriram spoke recently to NEA Indo-US Ventures Managing Director Vani Kola to learn more about the firm’s latest investments. The full version of this interview is to appear in the next issue of the India Venture Capital Report.

Venture Intelligence: Tell us more about Attero Recycling. Has this kind of business been VC-funded elsewhere?

Vani Kola: It’s the first of its kind in India for sure. This business is pretty much in existence in many countries in Europe but I cannot confirm whether they have been PE or VC funded. We are excited about this investment as India doesn’t have …

Growing Knowledge - By Sanjay Anandaram

It is fashionably said that we now live in a Knowledge Economy. Where value is created not by gaining access to proprietary information or by political wheeling-dealing but by better utilizing in-depth knowledge of a subject, market and process. Ideas and innovation are key and central elements of this economy.

Now how do ideas and innovation emerge? They emerge from insights and observations. From asking questions and challenging assumptions. From imagining possibilities. Insights generally come from individuals while ideas are developed and shaped by groups. Innovation usually requires an organization of some sort to deliver on ideas. It is therefore critical that each individual learn to be insightful and be able to ideate in groups for innovation to occur. Only a prepared person recognizes when opportunity or serendipity knocks on the door. Preparation, in turn, implies that one must be aware, informed and knowledgeable.

How does then the current financial and economic crisis aroun…

Symbiosis business plan competition

Symbiosis Institute of Business Management is running a business plan competition for working professionals and startups.

This event seeks to provide an opportunity for working professionals/start ups to pitch to venture capiltalists for seed funding. Participants are given an opportunity to present their B-Plans to an eminent panel of venture capitalists for a period of 8 minutes.

The winning teams would get :
- Funding of Rs. 5 crores
- 30 minutes to present before the core team of Seedfund in Mumbai.

Participating Venture Capitalists :

Seedfund | NEA-IndoUS Ventures | IndiaCo Ventures Ltd
Indian Angel Networks | Canaan Partners

For more information Click Here

Understanding the Critical Factors of your Business - By Sanjay Anandaram

In the late 1990s, a large number of internet entrepreneurs emerged in India, spurred no doubt, by the successful acquisition of Indiaworld by Sify. All of these young entrepreneurs were convinced that they had the makings of the next Yahoo or Amazon (Google wasn’t that big then!). With very impressive looking web-sites the only thing missing for success, in their minds, was the money. Almost everyone who started an online business in that period believed that THE critical factor for business success was in building a really good web-site which would generate traffic (eyeballs) which in turn would lead to advertising revenues and then the magical acquisition!

But hardly anyone survived that era. And the very few that did, are doing rather well. All those who’re still around and flourishing realized early on that having a good looking web-site wasn’t the most critical factor for the business since the reality in India was rather different. PC and Internet penetration was very low and br…

Outlook for Indian Corporate Venture Capital - By Sanjay Anandaram

While VC funds have played a critical role in the creation and sustenance of companies in the US, it would be a gross oversight to miss the role that US corporations, especially in Silicon Valley, have played in engendering and nurturing innovative startups. From hi-tech companies (e.g. IBM, Intel, Microsoft, Cisco, SAP, Motorola, Google) to bio-tech and healthcare (e.g. Dow Chemical, Johnson & Johnson, SmithKline Beecham, Pfizer) to publishing and media (e.g. Reuters, EW Scripps, McGraw-Hill, Disney, Sony) to aerospace and defense companies (e.g. Boeing, Lockheed Martin) to energy (e.g. Chevron, BP) have played an important role in furthering innovation in the US. According to PricewaterhouseCoopers and the National Venture Capital Association, in the first half of 2008, corporate venture capitalists were involved in roughly 300+ companies or 20% of VC deals signed and invested over $1 billion or 7% of overall venture capital dollars invested in US companies. Even the CIA spun ou…

NSRCEL's workshop on Finance and Biz Dev for entrepreneurs

Nadathur S Raghavan Centre for Entrepreneurial Learning (NSRCEL) at IIM-Bangalore is organizing two day workshops for entrepreneurs. The first - on Sep. 29 & 30 - will focus on Business Development Skills and the next - on Oct. 3 & 4 - will focus on Finance for Entrepreneurs.

For more information, contact:

Girish
Nadathur S Raghavan Centre for Entrepreneurial Learning
Indian Institute of Managment Bangalore
Bannerghatta Road, Bangalore 560076
Tel: 080-26993701, 3721, 3710
Fax: 080-26993769
nsrcel.orgnsrcel@IIMB.ERNET.IN

Are We Inventive Enough? - By Sanjay Anandaram

Over the weekend, I was immersed in reading Madcap Crazy Inventions by Gyles Brandreth, a slim volume published in 1997 as a tribute to the imaginative people from around the Western world. These quite remarkable people dreamt up an incredible variety of inventions that, no doubt, they thought would prove very useful but which we recognize today as being simply ridiculous. Of course, the inventors themselves had faith in their inventions! The inventions range from a spaghetti eating tool to a robber catcher to a rat scarer to a stammer stopper to reversible trousers to the Smellorama (where smells were made to match the action on a movie screen!). Most of the inventions were made in the 1st half of the 20th century.

On February 28, 1856, the Government of India promulgated legislation to grant what was then termed as "exclusive privileges for the encouragement of inventions of new manufactures". On March 3, 1856, a civil engineer, George Alfred DePenning of 7, Grant's Lan…

LIBA, TiE Chennai launch Business Plan Competition

Loyola Institute of Business Administration (LIBA) and
The Indus Entrepreneurs, Chennai (TiE-Chennai) are organizing a Pan-India Business Plan Competition. IDG Ventures India is sponsoring the event.

Apart from prizes worth Rs. 8 lakhs worth, the event offers funding and mentorship opportunities.

Significant dates:
Closure of Registration: Sep 23, '08
Last date of submission of Executive Summary: Sep 26, '08
Last date of submission of detailed Business Plan: Oct 24, '08
Last Date for submission of Final Presentation: Nov 19, '08
Final Presentation: Nov 21, '08
For more information, visit the competition page on the LIBA web site at http://www.liba.edu/bpc/index.php or email queries.bpc@liba.edu

"Swifter, Higher and Stronger!" - By Sanjay Anandaram

The 2008 Beijing Olympic Games would has just begun with 10,500 athletes participating in 28 sports and 302 events for personal and national glory.

The Indian contingent consists of only 57 athletes representing the dreams of a country with over a billion people! With the Indian hockey team failing to qualify for the Olympics for the first time, the Indian contingent will compete in shooting, track and field, boxing, archery, tennis, wrestling, rowing, table tennis and badminton. For the first time, interestingly enough, India’s medal hopes rest not on a team sport like hockey but individual sports like shooting and boxing. Our national game has been reduced to becoming an inconsequential non-entity on the world stage.

There are lessons from the Olympics that entrepreneurs will do well to keep in mind.

First, creating and sustaining a winning team is very different from being an individual superstar. Team work requires shared beliefs and goals, planning, understanding of individual r…

Top Investors from General Atlantic, UTI Ventures & Baring PE join Speaker Roster at IT Services

Sunil Kolangara of UTI Ventures; Abhay Havaldar of General Atlantic; Subbu Subramaniam of Baring Private Equity and Dev Raman of Tricolor India will be the investor speakers at IT Services & BPO Connect '08 (IB Connect).

IB Connect is a conference that brings together investors, entrepreneurs and top executives in the IT Services & BPO sectors to network, discuss and share best practices. The 2008 edition, to be held on August 28 at Mumbai, aims to review current trends and explore new opportunities.

Here is the latest speakers at the conference:

Aparup Sengupta, CEO, Aegis BPO
Nitin Shah, CMD, Allied Digital
Subbu Subramaniam, Partner, Baring Private Equity
Salil Parekh, Executive Chairman, Capgemini India
Akshaya Bhargava, CEO, Fulcrum Group
Abhay Havaldar, Managing Director, General Atlantic
Partha De Sarkar, CEO, HTMT Global
Srinath Batni, Director, Infosys
Rajesh Jain, Director, KPMG
Niteen Tulpule, Director, KPMG
Raj Chatterjea, Director-M&A, Motilal Oswal
Shailesh Shah, Chief…

Are the Best Years of Outsourcing Behind Us? Find out from Top Investors & Industry Executives

Spooked by the appreciating rupee, stock markets punished IT Services and Business Process Outsourcing (BPO) companies in 2007 - even while stocks in other sectors were booming. Private Equity and Venture Capital investments in outsourcing companies have also declined 50% in the first half of 2008 compared to H1 '07.

All of which prompts the question: are the best years of Indian outsourcing companies behind us? At IT Services & BPO Connect '08 (IB Connect), leading industry executives and top investors will discuss this and other crucial questions facing Indian outsourcing.

Speakers at the conference include:
Aparup Sengupta, CEO, Aegis BPO
Nitin Shah, CMD, Allied Digital
Subbu Subramaniam, Partner, Baring Private Equity
Salil Parekh, Executive Chairman, Capgemini India
Akshaya Bhargava, CEO, Fulcrum Group
Partha De Sarkar, CEO, HTMT Global
Srinath Batni, Director, Infosys
Rajesh Jain, Director, KPMG
Niteen Tulpule, Director, KPMG
Raj Chatterjea, Director-M&A, Motilal Oswal
Sha…

Taking Care Of Customers - By Sanjay Anandaram

The CEO of a leading online bus reservations company arrived late for our early morning meeting. I was upset for having been made to wait for what was our weekly meeting. He apologized profusely upon arrival and I could see that he was upset. He looked tired as well. I asked him if all was well. His story took my breath away.

Apparently, a customer had booked tickets through the company’s web-site for the last bus that departed late at night for Mumbai from Bangalore. Upon reaching the departure point, the customer was shocked to learn that the bus had been cancelled (the bus industry is not unknown for springing such surprises periodically) and that there was no other bus available.

The desperate customer, who had to urgently reach Mumbai the following morning, called the CEO’s company. The call-centre was just about to close after the last buses for the day had departed and were not at their responsive best. He was naturally livid. The CEO and his head of bus operations were hurried…

'Leading by Example" - Article by Sanjay Anandaram

Example 1: “I’m catching an overnight train to Hubli. My regional manager has set up a meeting with retail and corporate investors late tomorrow afternoon”, my friend told me. I asked why didn’t he just drive down in the morning rather than spend a night away from home. He replied, “It will give me time to spend with my branch colleagues there and I also plan on having lunch with them. There’s a nice masala dosa place near our office there and it’s been a while since I’ve caught up with all of them.” My friend is the founder and CEO of a leading financial services company. He tries his best to accept invitations to various events involving birthdays and weddings of his colleagues. He’s takes a genuine and personal interest in their well-being. He’s as comfortable in a road-side dhaba as in a high end 5-star restaurant.

My friend’s job requires him to travel extensively not just to metros but also to smaller towns around India. When travelling by air, he routinely takes the air-cond…

Profile of National Entrepreneurship Network

Business Today has article on the pioneering efforts of NEN, which has been promoted by NRI entrepreneur Romesh Wadhwani, to promote entrepreneurship in India.
NEN began with six colleges (winners of a competition in 2002 called Lock Stock and Trade) in Mumbai and spent the next few years building its own team, bank of students’ cells and entrepreneur-advisors as it sought to effect a change in the mindsets of students. “Five years ago, when we launched NEN, there was a clear need to accelerate entrepreneurship in India, especially at the college and university levels,” says Romesh Wadhwani, serial entrepreneur, whose eponymous foundation runs this network. The original goal for NEN was to launch thousands of first-generation entrepreneurs over 10 years, creating 100,000 high quality jobs and accelerating economic development in India. “Five years on, we have come a long way and made a big difference. Today, there are nearly 400 colleges and universities with entrepreneurship programme…

"My Lips are Sealed Mr. VC"

Rick Segal provides a list of 3 VC Questions You Should Not Answer and, if you can't seal your lips, some sample bogus answers.
1. Who else are you speaking to? [Answer: The usual suspects.]

2. What pre-money value did you have in mind? [We are looking for a deal that provides great returns for all of us.]

3. Can we speak to a few of your customers so we can better understand the value proposition? [No. Customer calls are post term sheet due diligence]
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.

Company Culture - By Sanjay Anandaram

This is about two companies. Or rather, about the cultures of two very successful and well known companies. As invariably happens, the culture of a company, over time, reflects the beliefs and values of the founders and impacts its performance on multiple dimensions.

One company was started by a group of middle class, educated, aware, passionate individuals. The other was a traditional Indian trading company that was inherited by the foreign returned scion. Capital was scarce for the first company and not so scarce for the latter. Both companies had strong value systems and were determined not to become part of or contribute to the endemic corruption and sloth around them. Hard work and attention to detail were common to both. The foreign returned scion hired a professional management team that enabled him to diversify into newer businesses. The first company stuck to their knitting – perhaps not knowing anything else to do.

The first company had a strong awareness of its social milieu …

WHAT BUSINESS AM I IN? - By Sanjay Anandaram

Quick, which companies come to mind when you read the following?

- “Relationships Matter.”
- “Broadcast Yourself.”
- “____________ is a social utility that connects you with the people around you.”

Each of the above describes an internationally leading company on the Internet. I’ve picked these as examples to illustrate a point. Namely, the importance of being able to describe your business in simple language to an average consumer. Or, as one venture capitalist likes to question eager entrepreneurs “How would you explain your business to your grandmother?” This may sound trite and facetious but has a very important purpose. Answering this question requires one to articulate what the objectives of your company are to your target customers in simple language. Many times, entrepreneurs when asked to describe their business use complicated and vague sentences peppered with jargon. I like to term it “buzz-word compliance.” Consider this example, “we leverage technological innovations to …

Hiring for Start-ups: Does an IIT/IIM degree matter?

US-based entrepreneur-turned-angel investor Paul Graham has an essay emphasizing why "it does not matter all that much where you go to college".
A recruiter at a big company is in much the same position as someone buying technology for one. If someone went to Stanford and is not obviously insane, they're probably a safe bet. And a safe bet is enough. No one ever measures recruiters by the later performance of people they turn down.

...Back in the days when people might spend their whole career at one big company, these qualities must have been very valuable. Graduates of elite colleges would have been capable, yet amenable to authority. And since individual performance is so hard to measure in large organizations, their own confidence would have been the starting point for their reputation. Things are very different in the new world of startups. We couldn't save someone from the market's judgement even if we wanted to. And being charming and confident counts for no…

Doing Due Diligence on VCs

These days, there is a lot of good advice online – see examples here and here – on raising Venture Capital in the Indian context.

A lot of knowledgeable persons advice entrepreneurs to do due diligence on a VC firm before accepting their money. For instance, here’s US-based investor Bill Burnham on his blog: One of the more unfair aspects of VC fundraising process is that VCs are allowed to take months probing every orifice of your company, but entrepreneurs are expected to make one of the most important decisions of their life in a week or two and often with little or no information. There’s no good reason for this and all entrepreneurs would be well served by taking some time to do some basic due diligence on any investor who has offered them a term sheet.

I suggest, at a minimum, talking to at least two entrepreneurs that the VC has funded and then talking through with the VC (about) A) all the deals they have done and what happened to them (and) B) the current status of their fun…

"Get competing term sheets"

So, you have managed to convince a VC to issue a term sheet? What next? Is it time to celebrate? Not according to VC-turned-hedge fund manager Bill Burnham, who has a post on "4 Things to Do After You Get Your First Term Sheet".

Here's item 1 (emphasis mine):Get a second term sheet: It may sound flip, but this is the single most important thing you should do upon getting your 1st term sheet. Nothing loosens up a VC’s purse strings or makes them more flexible on a particular term than the threat of competition. Without competition (real or perceived) you have very little leverage against a VC. Now getting one term sheet, let alone two, is tough enough, but getting two must be your goal and you must not waiver in pursuit of that goal even after you get the 1st one.

The biggest problem most entrepreneurs have executing on this strategy is that they have mismanaged the sequencing of their fundraising. Many entrepreneurs make the mistake of pursuing an “in order” fundraising…

THE BUSINESS PLAN – PART I - By Sanjay Anandaram

I’m writing this piece from Singapore where I’m on a teaching assignment of a course called Business Plan Workshop at the INSEAD business school. And given the last Indipreneur column, I thought it would be good to also talk in some detail in this and the next columns about one of the more important documents an entrepreneur will deal with (outside of dealing with investment documents and a last will!), namely, the business plan. A business plan gives birth to the start-up. It enables the entrepreneur and the team to envision and plan how the business will be run and how funds will be raised. The business plan addresses the needs of both the investors and the entrepreneurs because both have a similar objective – creating a successful business.

Writing a business plan is easy. Writing a clear, concise and fundable plan is not. Investors are not likely to be impressed by gimmicks or by flashy and flaky presentations. If they are, you probably don’t want such investors.

Clarity of thought,…

Operating Plan or Business Plan? - By Sanjay Anandaram

Often times I meet entrepreneurs who submit a great looking business plan with all kinds of fancy colour pie-charts and trend lines. It is evident that a great deal of time and energy has been spent in creating the plan. The plan contains enormous amount of secondary data about the market, the performance of Indian and U.S. companies in the similar/allied space, their valuations and the like. But precious little in the business plan about the business that’s currently seeking funding!

On the other hand, I also meet entrepreneurs who submit a non-colour 10 page stapled-together document without any fancy pie-charts and trend lines. Even more of them simply send in a presentation which essentially talks in simple language of the following:
•What is the problem that is being solved and who is experiencing it
•How is the problem being currently solved and the problems with the current solutions
•How will the company deliver a strong competitive solution and why will it win
•How will the busi…

Startup Funding: The Luck Factor – By Sanjay Anandaram

We hear all the time about the amount of money that's available to fund startups. For example, that private equity funds invested over $ 3.3 billion in just the first 3 calendar months of the current year. That VCs are always looking out for good deals as most of the plans they see merit little or no attention. That they invest in about 5-10 a year out of the 500-1000 business plans they get. And so on…But the truth is that a majority of deals that get funded are those that come through a referral or because the VC knows (of) the entrepreneurs; its natural because VCs don’t have the time to look at all the plans that they get to pick out the Rediff, Naukri, or Tejas Networks. Deals that come through some trusted source or through a trusted filtering process are therefore valued higher and rise to the top of the pile of business plans. It is therefore easy to see how many plans don’t get funded. And also how competitive the race to secure funding really is.

Given this situation, wh…

TIE-Canaan Entrepreneurial Challenge 2008 opens for entries

Extracts from the Press Release:

Canaan Partners and TIE come together to launch the second edition of the TIE-Canaan Entrepreneurial Challenge

Canaan Partners and TIE, today announced the launch of the TIE-Canaan Entrepreneurial Challenge, a business plan competition open to early stage entrepreneurs from across the country.

Entrepreneurs from across India will have an opportunity to compete for business mentoring, access to early stage investors and recognition in the second edition of this unique business-plan contest.

To compete in the challenge, participants will need to download and submit their applications from http://www.tienewdelhi.org/canaan/. The deadline for submission of the business plan applications is May 12, 2008.

Eight teams will be shortlisted based on their potential scale of the business, the strength of the team and sustainable differentiation in the business model. These shortlisted applicants will be invited to participate in the final round in the month of June …

The Illusions of Entrepreneurship

Businessweek has an interview with Scott Shane, professor of entrepreneurial studies at Case Western University, and author of a newly published book with the above title.
At the individual level, the core fact here is the typical, median, right-smack-in-the-middle entrepreneur is a failure. The cost is everything associated with that. So if you start a business and the business dies, you could have been working for somebody else. You could have been making a salary. You could have had the stability—you wouldn't have had that kind of stress that comes from the up and down of running that business.

So there's the personal costs. From an individual level, the myth is that somehow if you manage to hit the average or hit the median, you're going to be fine. The reality is that the distribution is so skewed you have to hit the top for it to matter, and in fact, you have to hit the top 10% to have income as an entrepreneur better than what you would have gotten working for other p…

Do QCs on the VCs - by Sanjay Anandaram

India is an attractive venture capital (VC) destination today and the future will only get better. Many more VC funds will come in and entrepreneurs, at least the good ones, will be badgered by VCs for “lets-get-to-know-each-other-better” meetings. This capital availability and increased VC activity is good for the entire entrepreneurial ecosystem.

But, in all this hype and hysteria about round and about VC and entrepreneurship, something has been missed. Namely, that in as much as due diligence is performed by VCs on entrepreneurs prior to making an investment, a reciprocal arrangement needs to be in place for VCs. Wheat needs to be separated from the chaff, the genuine from the pretenders.

Classic VCs are partners in business, not purely opportunistic money makers. They see themselves as company builders, not just as investors. They don’t take short term stock market oriented investment decisions. They help build successful businesses, not spend time on financial engineering. In …