a byte of me

Just a quick note about how proactiveness or proactivity can work wonders. Its just a matter of realizing that by being proactive, one gains a chance at obtaining what is wanted. I do consider myself proactive, but an experience today morning just pushed my level higher and I realized the tremendous power of proactivity all over again.

So I was walking with my girl friend towards a bus stop in the morning. I was hoping to catch a bus to go downtown to the venture fund and she was to carry on walking to the university from there on. Suddenly, one block away, I saw two buses coming - one that stopped at the stop I was walking towards and another that stopped at a stop where the buses were at that moment. I was 20 steps away from my stop when I started running to make it there on time. Unfortunately, I didn't make it and the bus driver didn't stop at the bus stop since there was no one waiting there. I dont think he even saw me running. Had the bus stopped at all for someone to get down, I would have gotten the extra few seconds and made it to my bus.

By now, the other bus, which was one block away had already stopped at the other stop which was across the street to my left. It picked up its passenger, shut the doors and was about to turn. I had written off my chances of getting that bus as well. No, I am not lazy and usually live life proactively myself as well. But I was damn sure that I was going to miss the second bus too. Even if I ran to get to the stop, I wouldn't have made it. I was resigned to the fact that now I would have to wait another 20 minutes for the next bus. By trying to run to this different stop and missing another bus again, I didn't want to be disappointed twice.

I am sure everyone has felt this fear of being disappointed at some point and it has probably prevented us from getting what we wanted. Often we feel like being introduced to someone influential and we think to ourselves, how can I just go and introduce myself. We just give up an opportunity because we fear the negative outcome. Our fears could be coming across as foolish or silly, or being disappointed by someone's negative reaction about our ideas or just plain missing the bus. And by giving up like this, we are almost guaranteeing ourselves of the negative outcome. We will never get what we want if we don't try. However, if we try, we worry we will be disappointed and in that moment, for some reason, avoiding the disappointment becomes our primary goal shoving our primary goal in the background.

Here is where positive thinking and being proactive can be useful. If we keep our goal in mind and do not give in to our fears, chances are we might actually get it. And in the end, if things don't turn out as we expected and we don't, in most cases, we are no worse of than we would have been if we didn't take any action.

How did my situation turn out you ask? My girl friend suggested to me "well, can't you take that bus?". I said "yeah, I can, but its already too late to get that one". The bus was now waiting at the intersection, about to turn right. I still had to cross the road to get to the bus. It was not my right of way to cross yet and there was too much traffic to just jaywalk. And if I waited for my turn to cross the street, the bus would have gotten its green light too and would have immediately turned before I even reached half way across the intersection.

Unexpectedly, she said we'll just wave and see if the driver waits. And thats what she did. And surprisingly the bus driver had seen me miss my previous bus while he was at his stop and was actually waiting at the intersection to see if I wanted to take his bus all this while. If she hadn't waved and urged me to try to get this bus, I would have needlessly wasted this opportunity to get to work early. All because of my fear of missing two buses in one minute and looking like a fool. In the end, I boarded the bus at the intersection and my friend saved me not only precious morning commuting time but I also realized a few things about how lost causes are saved, just by a pinch of proactivity. (*Image courtesy: ldsuccess.org here and here)
Tagged: Proactive, Thoughts

Yesterday I wrote how India is hot for VC and PE activity these days. But there is another side to this growth story as well. The story of what is hindering India from unleasing its true potential. And that according to me, is its politics, and the people running it - its politicians!


In other news recently, it seems like US intelligence sources have published a report called 'India: The Islamisation of the Northeast'. Given that it is from Rediff, I am highly uncertain regarding the truth of the story. However, if it is true at all, it marks a very important step in India's progress for the following reasons. It is an acknowledgment from some agency that belongs to US that ISI is meddling with internal Indian affairs. Indians and Indian news have always claimed this, but it fails to make a stir in the international news and political circles. Granted that India doesn't need US approval for what it believes, but it helps every inch given that Pakistan and US have come closer and co-operated on George Bush's War on Terror. Even though it is just an intelligence report and nothing at the political/diplomatic level yet, its a step forward. Who knows, when in the future, this may help shape some US policy that helps India out in this regard.

To many Indians, this sentence - "some US policy that helps India out" may sound very harsh. But its time we admit it. Most of our foreign policy is blunder. In my opinion, India doesn't have cordial relations with any of its neighbors. It bent over backwards in helping Bangladesh gain independence from Pakistan. But then it failed to play its cards right and sadly for it, today Bangladeshi army and its intelligence is co-operating with Pakistan (Bangladesh's one time enemy) to work against India in the North East. Bangladesh was carved out of India's Bengal state by the British (resulting in West Bengal that belongs to India and East Bengal which is today's Bangladesh). These two regions, it seems, should be separate only in political boundaries. They share thousands of years of ties and common culture. They even share the same language. Shouldn't India and Bangladesh find easier to maintain friendship rather than bicker over religion? I blame India's leadership for letting this friendship wither.

India's brother country Nepal, who India claims important trade and political friendship with, also doesn't look up to India anymore. In undergrad, I met many Nepali's who would openly admit that almost all Nepalis hate Indians' guts! I don't know how true it is, but I think if some local says that, I feel like there must be some element of truth in it. The common man, the local on the ground is more in touch with reality no matter what the top level governments say. The saga of India having screwed its relations with Sri Lanka is no secret either. China is whole another story. After sharing so many friendly trade (the silk route), education (Nalanda university and the famous Xuanzang) and religious (Buddhist) links for thousands of years until the 13th century or so, how these two countries ended up hating each other completely beats me. And Bhutan and Myanmar - its other neighbors geographically or culturally, are too instable themselves. The sad reality is, India has no neighbors it can count as its best friend.

Now that we have established that, we have to look at some problems that arise because of these sour relationships. India is finding it increasingly difficult to maintain the integrity of its own land. China and Pakistan claim entire states that have belonged to India in the past. There are many insurgencies going on within India itself - not only in its border states, but also states like Madhya Pradesh and Orissa which border no foreign country!

Given this state of the country, it is a surprise India is growing at all, let alone growing at 8% annually. And bulk of the growth should be attributed to the resilience and strength of the common Indian man and business-people, rather than the government (as it always takes credit). But this growth cannot carry on unless the government can figure out a way to stabilize the country internally as well as maintain good relations with its neighbors. One can only live peacefully and carry on with daily business if one doesn't have to constantly worry about his/her own life. If someone was waiting outside your door to bomb you the moment you stepped foot outside, would you even dare to go out to get milk, let alone go out to work? The answer is No!

Similarly, it will be increasingly difficult for India to conduct its own business with so much instability around in the future. Unless the top leadership takes things in its own hands and improves the conditions. This is an issue where businessmen cannot help. If they could, this would have been under control too! But this is entirely the realm of India's leadership. And for once, BJP and Congress - India's two leading national political parties - should stop bickering among themselves trying to pull each other down. They should work together to figure out what they as India's leadership can do to provide its countrymen the best conditions for them to conduct business within India as well as with the world and help keep India growing!
Do you think this will happen? Do you think the politicians will ever stop monkeying around?

Tagged: India, Politics

Rediff.com reports latest that forty VC firms have raised funds totaling $400M to be invested in startups in India. Thats great. Last year (2006) total VC and PE investment in India was $7.5B as opposed to just $2.2B in 2005. This year $2.4B has already been invested in the first quarter, leading me to think that this year total investment will top $12B or so.

I wonder where all this money goes. Working at VC firm in America, I see why startups in America raise funds in millions of dollars. Having employees on your payroll in America is very expensive. Especially if your staff is composed of top scientists. You can burn through a few million dollars in one year easily. On top of that, marketing and sales costs are typically much higher too.

Comparatively, hiring people in India is much cheaper and many costs that you typically see in American startups are either inexistent or way low. So, it is my guess - and its totally my guess - without any research into data about startup funding in India, that an average startup company might burn through cash much slower than an average startup in America - and thus the need to raise less capital.

So if we are on average investing less money in startups, we must invest in a lot more startups to invest all that money thats flowing into VC and PE funds in India. But where are all the Indian startups that we must see blooming already? If India Inc's startups gulped down almost 28% of US VC investing (VCs invested $26.5B in 2006 in US), where is all the money going?

Is there a flaw in my logic that I am not seeing? Or are there other factors such as Indian startups taking longer to gain visibility or something else? It will be interesting to see. In the meanwhile, I will try to find some data about Indian startups in 2006 and 2005. Anyone know any good databases or good data resources for Indian startup arena? I know of Venture Source, but I afaik it has data only for US, Europe and Israeli startups (yes, Israeli! I was surprised too when I first saw it).

Apparently, the data that all news sites are reporting is from a study titled "Indian PE/VC Market Firing on all Cylinders-Liquidity all round" by Assocham and Ernst and Young. I am trying to find this study, but it seems it is too new for search engines to have indexed it or its restricted access. If someone can find it and send me a link or the file at indyman 'DOT' blogspot 'AT' gmail 'DOT' com, that will be great.

Another interesting read: Surging economy sees private equity investment soar. Wall Street Journal - Investing In India. (.pdf)

Update: Today morning 04/24, data for Q1 2007 VC investing came out. VC investors in US have invested just under $7.1B. This number is higher than all other Q1 results for the past 6 years, indicating a good forecast for the economy.

Tagged: India, Venture Capital

Labels: India, Venture Capital

Picture of Victoria Terminus Station of Mumbai during peak hours. From Sebastiao's Exhibit titled 'Exodus'

Ask anyone who has lived in Mumbai about getting around in a local train and you'd likely get one of the following two responses based on who you are. If you are a local, people would assume you know the dangers of traveling it and give you the directions. If you are a foreigner, people would advise you to stay away from it or words like "once-in-a-lifetime" experience will be thrown around. Wall Street Journal carried a very interesting story on its front page today about the dangerous mumbai trains (Subscription required). There is also a video with it, which is embedded below.

Its no secret that Mumbai trains that are used by millions of city residents to commute to work and to get around are over crowded. During peak hours, the trains normally carry 2.5 to 3 times the number of people that it can safely carry. Thats about 550 to 600 passengers per car whereas the number to safely operate is 200 per car. Even during non-peak hours, the trains carry more than 1.5x the load.

This may seem like a feat accomplished, but it really is very dangerous. The train cars are normally packed like animals with no room to move your foot. If you shuffle your hands in or out of your pockets, you may get into a fight with the person standing nearby because you have just hit them with your elbow.


The trains are so crowded that to get to the door from inside the car, you have to plan three to four stations ahead and get up and start making your way outwards slowly. To do that, you also need to know which side - left or right - your station will arrive at. If one doesn't plan well, it is impossible to get out because if you try to hurry, the crowd will push you right back in. Besides there are people hanging on by the doors who may fall out if you push too much!

Every year many people die from crossing the tracks carelessly, but even more so from falling out of running trains overcrowded beyond capacity. Many people also fall between the platform and the train due to the jostle of getting in or out when the train arrives. You must be wondering how this could happen? Believe it or not, but many platforms are not aligned to the height of the train (due to repairs carried out on the tracks, which leave them elevated and the contractor didnt level them back down to save costs - i.e. more money in his own pocket). So on many platforms the train is usually a foot higher than the platform and there is a huge opening for anyone to fall through! (So much for the combined talent pool of India's millions of engineers)

No wonder when Brad Pitt and Angelina Jolie decided to hop on to a Mumbai train while shooting for A Mighty Heart, it made world wide news.

The train authorities are seen regularly on television boasting about the capacities mumbai train network handles. They use popular words like courage and strength to describe the commuters and win them over. Thats why, whenever I read someone from the rail administration being interviewed, I don't pay much attention. In fact, I run far from anybody who starts boasting about today's state of mumbai trains. (*Image courtesy: BBC)

I consider that both the Central Railway and the Western Railway (the two government agencies that manage Mumbai's entire rail network) have terribly failed the Mumbai residents. Its a failure of the top level management in not understanding the demands of a growing metropolis of one of the fastest growing nations. It is a failure of planners that are hired by the railway. It is the failure of the politicians who prefer united minorities who establish illegal slum-type settements over the tax-paying, honest but divided commuter public. The city authorities almost have their hands tied by these politicians when time comes to demolish these illegally occupied public lands next to railway tracks. Thats why new rail lines cannot be laid and the frequency of trains cannot be laid. (At least thats what the rail authorities like to claim). But as you probably see by now, these are just some of the many parties to successfully play the point-the-fingers game when blame comes around. And nothing ever gets accomplished. (*Image Courtesy: http://www.cbc.ca)

I am certain that there are many things that can be done if the railway authorities wanted to. In the next few weeks, I am going to gather some data on the railways performance in Mumbai and draw some comparables with other cities metro and public transportation. If anybody has smart suggestions as to what can be done, please post those in the comments. And if you are one of the affected Mumbai residents, please think about this deeper than usual. Lets not shurg and slide this as a part of life as many of us Mumbaikars have gotten used to doing.



Tagged: Mumbai, Mumbai Trains, Local Trains

Labels: Mumbai, Politics, Railway, Trains

My heart reaches out to all the victims and families of the recent shootouts at Virginia Tech. In two separate incidents, gunman Cho Seung-Hui, a 23 year old student killed 32 students and professors before shooting himself. Two people of Indian origin - Professor G V Loganathan who hailed from Coimbatore in Tamil Nadu and first year masters student of architecture Minal Panchal from Bombay were also killed.

I have been very deeply affected by the tragedy. For the last two days, I have not been able to concentrate on anything other than the tragedy. I keep tuning in to the news, both on the television as well as on the net. Being a student at a large university, roughly the size of Virginia Tech makes things almost real. I can imagine how vulnerable we are to such an event here too. I can identify with how the university community at VTech feels right now. But the fact that I almost went to Virginia Tech and would have been there right now had I chosen it two years ago makes dealing with this tragedy even harder.

Two years ago, while finishing my undergrad, I had applied to schools to pursue a graduate degree. After being admitted to six schools, I narrowed the list down to two. The two schools I was choosing between were Virginia Tech and University of Utah. I had received funding from both schools and they were both pretty equally ranked. I was too undecided about my research interests at the time to make a decision sitting at home from their web pages. So I decided to visit both.

I had received an offer from both schools to visit their campus. I declined VT's offer because it was my last semester in undergrad and the visit weekend coincided with some really hard deadlines in my course work. I could attend the University of Utah's prospective grad student weekend the next week. I learned a lot about the school and met the people, who were all great and loved the mountains that surround the salt lake valley. But in my heart I didn't feel like making an unfair decision after visiting only one university.

So I emailed people at VT and decided to drive out there the next weekend. I visited the campus, met a lot of people. I loved the campus - the buildings are all made out of Hokie stone and look so pretty. It is a beautiful campus. But it is located in Blacksburg which is a small town, almost like the town I was already in doing my undergrad. I wanted to move out to a slightly bigger city and Salt Lake won there. But that was not the deal clincher. There were two or three professors whose research interested me but overall the grad student and research atmosphere at Utah looked better. That clinched the deal and I decided to choose Utah over Virginia Tech.

I keep thinking where I would be today, had I chosen the other. I am not sure that I would have been one of the people in Norris Hall had I chosen VT. But I am sure my life would have taken a very different path in many ways than it has here. It just keeps coming back to my mind, the choices we make at every turn and how they change every single that follows.

I hope no body has to go through what the people who witnessed the massacre had to go through every. More so, I hope no family has to go through what the families of the victims are going through today. My heart-felt condolences go out to everyone affected by the tragedy.

Tagged: Virginia Tech, Thoughts

Daniel Primack has recently talked about the increased carried interest on new private equity funds in the PE Week Wire I mentioned about in a post here. Some buy out firms have increased the carried interest they charge their LPs from 20% to 25%.

For the uninitiated, fund investors are limited partners or LPs who pay the general partners, the GPs, fees to manage the fund and source deals, do due diligence etc. The GPs earn a 2-3% management fee every year and also something called a carried interest, which is about 20% of the profits.

So Dan argues that the GPs' thinking that the size of the fund (which typically is around $1bn for the ones doing this) would not allow them to invest and recruit in talent that will get poached by the larger $20bn and upwards funds. So they need to charge higher carry to be able to compete with them. Contending this is unethical, he goes as far as comparing it with the fund sizing during the bubble era.

"I’d go so far as to argue that bubble-era VCs were actually more ethical than today’s LBO crop (in terms of this specific issue). Why? Because VC carried interest increases did not get stapled to fund sizes. Instead, VC fund sizes grew purely as a function of perceived market opportunity/valuation. Such perceptions were wildly inflated, of course, but not intentionally so."

I commend Dan for his courage in openly admitting what he sees wrong in a newsletter that is primarily read by the people he is complaining about. But I don't see why this practice is unethical. It may be wrong and we do need a discussion on what is an appropriate size of carried interest for different sized funds. However, if the LPs of the funds who have done this are okay with it (since the LPs now only receive 75% instead of 80%), shouldn't the funds be fine to do it. In fact by doing so, I'd guess the GPs are under more pressure to perform and would have to work harder or actually recruit the talent they are talking about recruiting by raising the carry. They need to get higher returns so that they can justify this practice when they raise their next fund. So if they achieve 40% IRR instead of 30% on the last fund, they can argue that hey, we raised the carry, but we gained more as well.

We must also remember that the players (the LPs) in this industry are not rookies. They are not typical lay persons like you and me. They are not the person who can be easily taken advantage of. The LPs are managers of large pension plans or endowments who have significant pressure on them. They also have to the top attorneys and the best legal firms. If they can find a reason to go along with the increased carry, I am sure they have their own reasons. If an LP thinks this is stretching it too far, they have the means to sit down and negotiate with the GPs or the choice of not investing in that fund. Its as simple as that. In the end, every thing boils down to supply and demand. Doesn't it? Then should we really be worried that this practice of increasing the carry from 20% to 25% is unethical?

Tagged: Buyout Funds, Carried Interest, Private Equity, PEHub

Along the lines of my last post, heres a compilation of some top blogs that are related to Private Equity, Venture Capital, and Entrepreneurship that I check out and highly recommend:

• Venture Hacks - An excellent blog for the non-networked entrepreneur. Started by Naval and Nivi, both of whom have some entrepreneurial experience and know things from both perspectives

• StartUpBoy - by Naval Ravikant. Its title says Truth in Startups, and a whole lot less. I couldnt agree more.

• NiviBlog - Nivi writes about everything - management, vc, entrepreneurship, life etc.

• IWillTeachYouToBeRich - Blog by Ramit Sethi about personal finance, budgeting, entrepreneurship etc..

• VC Circle - a blog on VC investments in India

I'll keep updating more blogs to this list as I come across more blogs that I like.

Tagged: Blogs, Venture Capital, Private Equity

One of the best things about being at the University Venture Fund (UVF) is I actually feel a part of the Venture Capital and Private Equity communities. And I am not just saying it. UVF with its $18M fund and 11 investments is slowly becoming kind of a big deal.

To begin with, we have some great partners we work with. They source deals to us and we do due diligence for them. In the process we learn a lot about VC investing, due diligence and the partners get due diligence done faster, for free and sometimes a young, student perspective on some tough questions. Its a mutual relationship that works out great. Even on companies we might not invest in. I have closely worked with Ft. Washington Partners (an Ohio based fund of funds) and have learned so much from interacting with them and doing due diligence for them.

This exposure to the VC partners is a very important component of the educational mission of UVF. I noticed how much a part of the PE world I have become when I automatically stopped working on my computer when I heard something on the idiot box that was playing at UVF office. My ears had picked up the words "New York Times proposes PE gains be taxed at regular rate instead of the Capital Gains tax rate" on MSNBC The accompanying article is here. For the record, I think the idea is meritless since profits from investing in a company are technically a "capital gain". But I can see why this has come up. To many people, it seems like with the lower tax rate of 15% (as opposed 30+ %) for VC investors, "the rich only get richer". More on this later, in some other post.

Since then, I've wanted to keep myself updated with the PE industry and am so glad somebody recommended me the Private Equity Week Wire. PE Week Wire is written by Daniel Primack at the PEWeek which is owned by Thomson Financial. Their subscription costs money, but the PE Week Wire newsletter is free. Its top notch PE news in your inbox daily. Daniel does a great job of compiling top stories into a discussion format at the top and offers his perspective on some events. Then there are other news in a one or two sentence format.

If you have anything to do with the private equity industry or are just interested in learning more, I highly reccomend signing up for PEWeekWire.

Tagged: Private Equity, Venture Capital, University Venture Fund

Today was a beautiful day to get things accomplished. I had to make a lot of calls for a market study we are helping out one company in which one of our venture partners are investors. Early on, the calls were not coming along pretty well. But then stuff started getting together and I got tons of good data.

After that, I dont know why, I decided to make a call to this person who I had been trying to reach badly a few weeks ago and given up. I got through on my first try and got a meeting for today itself. I wont tell you what it was about - but lets just say it was a step forward in the direction of me starting something of my own soon!

That was a great meeting and I celebrated by going to my favorite cookie shop - Ben's Cookies and buying 3 cookies for $6. Its damn expensive, but its worth it! They're so good.

In the morning, after the meeting with this particular person got set up so easily, I was convinced that today was a great day and things were going in my favor. So I made another leap and now have a meeting with a hedge fund manager for lunch on monday! That was also another jackpot!

And thats why I loved today! Things just rolled in my favor. And guess what, the sun is out, the flowers are budding, the birds are chirping, spring is here. Indeed it was a beautiful day.