BT dot.com/Vc Viewpoint

Some 500 business plans have dropped into the office of venture capital fund Chrysalis Capital over the last 3 months. Only a few have made the grade. Founded in May, 1999, by Ashish Dhawan and Raj Kondur-MBAs from the Harvard Business School-Chrysalis Capital is, obviously, not throwing around its capital pool of $65 million (Rs 283.40 crore). Ashish and Raj have so far committed Rs 20 crore to 2 ventures. The duo spoke to BT's Roshni Jayakar on how they fund e-Biz ventures. Excerpts from an interview.

Raj: Chrysalis is focused exclusively on software and infotech-enabled companies, and the Netspace. The idea behind us being focused is that we can move quickly and bring a lot of strategic value to the table. We view funding as the beginning of an active partnership. We are involved in building a team, shaping strategy, accessing customers, creating and completing strategic alliances, and, finally, in realising value. We are insightful about the areas we are operating in.

Could you tell us about the ideas that you have supported in India?

Ashish: One of Chrysalis' missions is to build great companies by bringing back to India talent that has gone to the US. The first one was Baazee.com, an e-Commerce company with a specialised focus, which is started by 2 of our juniors at the HBS. They are extremely passionate about what they are doing, and have built a team of 25 people in Mumbai. The second is eGurucool.com, an education portal, which was launched in November, 1999. We approached them since we feel educational services can be huge in the on-line world. The team in eGurucool is energetic, has a bold vision, and has highly competent people. There was great chemistry too.
Raj: We met them on Friday at 9.00 p.m., and left their office at 1.30 a.m.. We met again on Saturday. On Sunday night, we had a term-sheet signed with them.
Obviously, speed is important...
Raj: Not just in terms of funding, but in every kind of situation, it's crucial to move quickly. That's the kind of partner an e-nterpreneur should look for-in terms of someone who can match their energy for business-their passion for building what they are building.
Ashish: Net companies age within weeks-if we bog them down for 12 to 16 weeks during the deal-making process, we have destroyed a lot of value. If the start-up is focused on just trying to get their deal done, it is taking time away from business. And in 12 weeks, its business can be in a different place.

VC Profile

Name: Chrysalis Capital
Founded by: A. Dhawan and R. Kond ur
Capital sources: Strategic investors, incluing Microsoft, Economic Development Board of Singapore,Stanford University and Bank of Madura. Also funded by founders of a number of premier technology firms inthe US, senior managers at transnationals, and partners of several top-tier venture capital firms in the US and Europe.
Corpus: $65 million
Ventures financed: Baazee.com; Egurucool.com
Contact: Chrysalis Capital, 106, Mittal Chambers, Nariman Point, Mumbai-21.
Tel.: 022-2306600, Fax: 022-2306601
e-mail: raj@chrysaliscapital.com

At what stage do you usually fund the partnership?

Ashish: We are generally looking for some proof of concept, and not just backing people with only a business plan in hand. We will consider incubating businesses, but, quiet often, we will look for people with a well-baked plan, and some sense of how to put a management team together.

How much money do you commit? And till when?

Raj: There's no minimum amount. Over time, we want to commit an average of $2 million to $10 million on a venture over the life of an investment. The largest we have invested so far is $10 million. We will do smallish investments too, where we feel we can contribute more capital in the future. We look at investment for a period ranging from 3 to 7 years, but do not necessarily sell the holding the moment the company is listed. We look at ourselves as builders of the new economy-not traders.