VCCircle

Have you heard of Bijoy Goswami who set up a Bootstrap Network? Here is a very interesting story on the man who set up an innovative association of entrepreneurs who are bootstrapped and how they are helping each other. It's has now become movement - it started from Austin in the US, and spread to other cities including Bangalore in India. Read more here.

Keya Sarkar, a columnist with Business Standard, is a regular writer on microfinance issues. Here is a column from her on the microcredit phenomenon, and how it's gaining strength these days.

She recently attended an event organised by Aavishkaar, a microfinance fund which started operating as a Sebi-registered venture fund in 2002. It was an award ceremony organised in Mumbai to honour micro entrepreneurs. She says micro entrepreneurs are increasingly coming into focus these days thanks to the efforts by organisations like Aavishkaar.

Aavishkaar has a fund size of $1.5 million, and has invested so far in six companies, all with an orientation of innovative products and services that will have an impact in rural and semi-urban areas. Vineet Rai, who runs the Aavishkaar fund, says that he invests between $10,000 and $100,000 in each enterprise. Those that Aavishkaar has funded so far include a company that produces 30 per cent more efficient kerosene stoves and rain guns for irrigation; a company that specialises in technology for dairy co-operatives; one that focuses on rural energy solutions as in biomass processing and hydel devices; and more recently in a company that specialises in rural marketing. The last is in order that it can market the products of other companies in which investment has been made.

Having funded six so far, he says that a substantial portion of his fund still lies uninvested because it is difficult to find small entrepreneurs who are ready for funding. The award ceremony, (publicised mainly through word of mouth and its site aavishkaar.org) in Mumbai last week was precisely to encourage those with new ideas for the rural sector to approach Aavishkaar, says Sarkar.

So, if you know of any good micro entrepreneurs, you can direct them to Aavishkaar.

Related:

"Banks Are Ready To Lend To Microfinance Institutions, But There Are Hardly Any Good Ones"

Don't rack your brain. He is a 53-year old serial investor based in Bangalore and one who is thinking big. He has just acquired a manufacturing plant owned by MNC pharma giant Pfizer in Sweden for an undisclosed sum. Bagaria runs Kemwell Pvt Ltd, a $11 million contract manufacturing company. By the way, Bagaria is not completely unknown. He has served as director on the board of ReaMetrix, a company founded by Bala S Manian, a Silicon Valley-based entrepreneur, and venture investor.

The Swedish facility makes active pharmaceutical ingredients, and finished drugs. It employs 170 people. Kemwell formulates liquid orals, tablets, ointments, and external drops. It employs 300 people. Even small Indian entrepreneurs are going global. (Via The Times of India)

Here is "60 Seconds Chief" with Subbu Subramaniam, a partner in Baring Private Equity India. Subbu is a chartered accountant, cost accountant, and a company secretary, besides holding an MBA from IIM, Ahmedabad. He is on the board of MphasiS BFL, Maples ESM and B&M Hot Breads. He has also served on the boards of Slashsupport, Cybernet Software Systems, Jyothy Laboratories, and SRA Systems.

Here is his take on four questions posed to him by The Hindu Business Line.

What I liked from what he said:

"Intuitive and daring actions help entrepreneurs create businesses that change the way the world works. Expense budgets are always `met', it is usually the revenue numbers that few management teams achieve with

I have visited vMoksha Technologies Ltd, a Bangalore-based IT company, along with a few visiting venture capitalists from the TiE Silicon Valley chapter. It was sometime in February 2004.

Now I hear that its chairman and CEO and also the co-founder, Pawan Kumar, has quit the company and joined Scandent Solutions Corporation. Kumar is the new President of Scandent.

Today's Economic Times reports that Kumar has sold his 50 per cent stake in vMoksha to his Gulf-based NRI partner Rajiv Sahani. He has been quoted in the story that the company has been facing some problems. Its revenues of $15 million in 2004 are down to $13 million in 2005, and they are expected to come down to $9 million this year.

It's a classic case of entrepreneurs quitting when the downturn comes. Any thoughts on this?

I had missed this story in San Jose Mercury News about how Bangalore is turning a Silicon Valley in terms of entrepreneurship. (Ed: It's not quite!) Bangalore has always been India's startup capital. But a Silicon Valley? Not yet. The article, however, cites the example of higly educated engineers in Bangalore starting up when they can fetch highly paying jobs.

Manish Agrawal, 26, Kartik Jain, 24, and Anuj Sharma, 25 -- quit their job to launch a start-up. Their new venture, PicSquare, allows Indians living in the United States -- as well as locals -- to upload digital images, which are then printed in India and delivered to friends and family. Prints can be ordered over the Internet. The photos can also be used to create gifts, such as calendars, coffee mugs and T-shirts. The founders also hope to make the service into something of a social network for Indians. Aggarwal, studied mechanical engineering at Purdue University, said many of his friends are planning to start up on their own. "I saw all the potential in India,'' he said. "It's an emerging market.' (Via Mercury News)

IIT Kanpur is organising Megabucks, an annual entrepreneurship competition, from February 11-12, 2006. The event is a platform for spotting ventures/business plans of students and professionals.

It aims at serving as the right platform for budding entrepreneurs to act on their ideas and talents to develop them into reality and nurture them to form exceptional enterprises, says a report in CoolAvenues.com

Some companies that have emerged from Megabucks are Transversal E Networks, Kalzoom Technologies and GEO-X. The judges of the competition include venture capitalists and entrepreneurs.

The event has participation from institutes like IIMs, XLRI, SP Jain, IITs, besides international universities like Stanford, Purdue and National University of Singapore. This year's speakers include Dilip Chhabaria (DC Designs), Douglas Breckenridge (CEO, Mindguild), Muneesh Chawla (MD, IL&FS), Vijay Kumar (CEO, NIIT Ventures) and Aditya Tyagi (Founder & CEO, Enablers InfoTech).

New Vernon To Pick Up 20 Per Cent Stake In Broking Firm Motilal Oswal

Today's Hindustan Times reports that New Vernon Capital, a fund promoted by Arshad Zakaria, has emerged as the front runner to pick up 20 per cent stake in Motilal Oswal, a leading Mumbai stock broking firm. (More details and link later)

India a major player in global start-ups

India is playing a major role in a growing trend of new companies that are launched as global businesses right from the beginning, a media report said. These businesses, often in technology sector, set up headquarters in Silicon Valley to take advantage of funding and ideas, but have major operations in places like Bangalore, giving them access to overseas markets as well as an increasingly innovative pool of talent.

This is the last item possibly I can write on TiEcon India 2005.

One refrain I heard at the event's last session was that why aren't there enough VCs from non-tech background. Alok Wadhwa, Chairman and MD of Cornerbook Store, clearly a non-IT business, thinks there are not enough VCs from the non-ITsector. The problem here is the techie-turned VCs will (may) not be able to understand the startups in non-tech, brick and mortar, business areas. They may not be able to appreciate such a business as much as a VC who belong to non-tech area does. I think Wadhwa himself would have found it difficult to raise funds for his books retail chain although retail is a hot area.

Please write in if you know of Indian VCs who come from a non-tech background. I would like to list them out here.

G R Gopinath, A Great Entrepreneur

The last session at TiEcon was a speech by Cap. G R Gopinath, the founder and CMD of Air Deccan, India's first and most successful low cost airline. Gopinath, son of a municipal school teacher in a Karnataka village, is a great entrepreneur. He went to school bare-footed not because it was fashion then, but because he didn't have money. He is one guy who saw the Indian economy's shift to a market-led economy much in advance. The ex-Air Force man saw the potential for a helicopter service long time back - in 1997 - since the hinterland of India was not connected by air.

(Gopinath with R K Laxman's cartoon character Common Man)

"Helicopter is an infrastcructure in the sky. You need helicopter for aerial photography, gas pipeline services, mining and so on. These sectors were opening up," Gopinath said. In fact, the only organised player in this segment was Pawan Hans, which is a state-owned undertaking. He borrowed a helicopter (after much persuasion) from a Japanese company, convinced Karanatak chief minister to allot him a hangar at the Bangalore airport.

Finaly he started the service with one helicopter in 1997. "I went to TDICI, the former VC avtar of ICICI Venture, but they said they would fund only IT ventures." But, six months after he started Air Deccan (the low cost airline launched in 2003), there were 20 VC firms queuing up to fund him.

Now Air Deccan is the biggest aviation success story. The airline operates 185 flights a day, is the largest e-commerce player by logging in $600,000 a day in net ticketing. This year, it has so far 4 million passengers, which is 25 per cent of the total domestic airline traffic. And 20-40 per cent of them are first time travellers.

The bottomline is: Gopinath found a void in the Indian aviation business, launched a product that would suit Indian conditions and is now expanding the market. Indian air travel is affordable to Indian middle class, thanks to Gopinath. Now not just Gopinath is making money, but many others who followed him too.

This is an interview with Danish entrepreneur Morten Lund in Business Standard. Lund, who has set up nearly 50 companies including Skype (acquired by eBay for $2.6 billion) and antivirus software Bullgaurd, was in India to attend TiEcon India 2005. Excerpts:

Is this your first visit to India?

No, it’s my third. I love Delhi, even though I don’t wear a watch.

Why not?

I don’t like being dictated by a metal piece.

In your blog, you talk of your “psyko aggressive” investment style. What is that?

Everything I communicate has a note of irony. I don’t see myself as an investor, but just a super lucky guy. There is this serious weekly paper in the US (tries to recall the name and fails) which was doing a story on the new generation of kids. They asked me what I was doing and I said I was a psycho-aggressive investor.

You must mean something by it...

The week before Skype was sold, I was out of money. I had over invested. I do it out of passion... addiction. I don’t care about my own money, I just care about companies.

After Skype, what?

I love this whole Google thing, just like everyone else. Google is going to change the whole media market. I was once a part of the advertising industry. It is stupid. When you turn 35, you vanish. They compete for an award that means nothing to the product.

I have invested in Kontera in Israel. (Kontera has introduced the AdLink advertising concept of creating sponsored links from in-text keywords). I am very much in love with that stuff. I have also bought a hotel in Bali. I am interested in mobile applications. Then there is a gene modified plant. If you spread its seeds, you can find land mines. I understand nothing about how it works but had to go into it.

What is your view of the war between Google and Microsoft?

I don’t feel smart enough to comment. But did you have a good experience with (Microsoft) Outlook in the past two years? On Google, I can search anything I want and that is beautiful. Microsoft went online because they had to. They didn’t want to.

(Lund's favourite T-shirt)

How does the India story look to you?

India is moving in the right direction. India has got it all. It has huge organisations with hugely sophisticated people and the richest middle class. Look at the shopping malls. They were not there when I came here three years ago.

It’s a no brainer. Indian companies will be buying US, UK or German companies. We have to just go with them.

You have become a part of IndusView Advisors (a corporate finance and advisory firm to focus on cross-border transactions)...

I only believe in people. It’s only because of the people with IndusView. Some very smart words came out of their mouths. I never invested in anything but people...Read on

Related:

Morten Lund's Blog On His India Visit

TiEcon Pics On Lund's Blog