MUMBAI: VCs making their way to the ICICI digs for a deal-flow meet with potential investee companies

I am not a big schmoozer. I would rather do a quiet one-on-one with as many people as required, than clink glasses in a noisy do, making small talk. But this is one assignment I am glad my editor sent my way. For, it's not every day that one gets to hang around with some of the most important venture capitalists on planet Earth, and watch them in action as they go around sizing up investment opportunities and striking deals. And this particular group, flown into India by The Indus Entrepreneurs (TIE) to get a sense of the deal-making opportunities, had $10 billion in investible funds. In fact, just two issues back, two of my colleagues had done a cover predicting that 2004 would be the year of the venture capitalist. And here I was being set up by my editor for a six-day "hang-around-with-the-VCs" jaunt. Life as a business reporter doesn't get better much than this. Our first port of call: Mumbai.

Day One (February 1, 2004)

It's around eight in the morning and standing in a corner of Taj President's second-floor lobby in Mumbai's Cuffe Parade, I can see ICICI Bank CEO, K.V. Kamath sitting in one corner talking quietly to another man, who I later learn is Bala Swaminathan, Head of ICICI's Corporate Banking. What could have got India's biggest private banker cooling his heels in a hotel lobby? The answer is, I discover to my joy, the same set of 30-odd VCs that I've tagged along with. Kamath's plan is to try and become a channel for the fund flow from VCs to companies in India.

By half-past-eight, the visibly jet lagged VCs arrive at the hotel. I am surprised to see that a majority (say, about two-thirds) of them are of Indian origin. There's Raj Jaswa, who co-founded Selectica Inc-an enterprise software company that once boasted a market cap of $5 billion-but is now the Managing Director of Jaswa & Co., which provides coaching and management consulting services to high-tech start ups. He takes over as the President of TIE chapter in Silicon Valley this month from Sridar Iyengar, former India Chief of KPMG, who is accompanying the delegation. Then, there is Naren Bakshi, who runs JumpStart; Asha Jadeja, who along with her Stanford University computer science professor-husband Rajeev Motwani, runs Dot Edu Ventures, which incubates start-ups at academic institutions. Google founders, Larry Page and Sergey Brin, were students of Motwani at Stanford and the $40-yes, $40-cheque that he wrote out as his contribution for launching the search engine "will (fetch) more than enough to take care of retirement", says the 41-year-old Motwani, referring to the $2-billion IPO that Google has in the works. Some other interesting VCs are Tushar Dave, Co-founder of NewPath Ventures, a hybrid Indo-US incubator, Bob Williams, a General Partner at Bay Partners and Chris Albinson, Partner, JP Morgan Partners.

The first day, as it turns out, is basically an orientation session, where Kamath in his key note speech first sells the India Shining story and later ICICI Bank, how it became India's fastest growing bank in a matter of a few years. The other India evangelists include Mihir Doshi, CEO of Morgan Stanley Securities, and Rakesh Mohan, Deputy Governor of the Reserve Bank of India. It seemed there was an overdose of macro economy, as at the end of day, I could see the VCs make a beeline to their hotel.

Day Two

The morning begins with Gujarat Chief Minister Narendra Modi making a courting call to the VCs over breakfast. Modi's 45-minute spiel over, the group clambers on to a Volvo luxury coach that will take them to ICICI's headquarters in the Bandra-Kurla complex for a "deal-flow" meet (industry jargon for meeting with potential investee companies). Dilip Chhabria of DC Designs is waiting at the gates to showcase two of his custom-built cars. One is a modified Bajaj Tempo Traveller equipped with a TV, conference table and even a toilet. The other is a redesigned Toyota mr2, a sports car. Chhabria wants to do a BPO for global automotive designing, but the response is lukewarm. "Not much of the designs is outsourced," quips Ajay Chopra, Chairman and Co-founder of Pinnacle Systems, a California-based VC.

Out of a dozen start-ups that presented their fund raising plans, only a few companies like Indiabulls.com (an online trading firm that wants to raise $10 million for growth capital) and Indiagames, a game developer that's scouting for $4 million, manage to get the VCs excited. Another company that gets positive response is Infowavz, a third-party BPO, which wants to raise $12.75 million. I overhear a VC tell its CEO Zia Shaikh: "I will be interested in talking to you."

NEW DELHI: Finally, we get (almost) all the VCs pose together for a snap; will they return?

After the deal flow meet, we are off to the Dhirubhai Ambani Knowledge City in New Mumbai, headquarters to Reliance Infocomm. Chairman Mukesh Ambani himself is on hand to tell the VCs how he built the 28,000-strong company and acquired almost six million subscribers in less than a year. If the DAKC tour was meant to showcase Infocomm as an example of India Shining, then Ambani more than succeeded. "It's a marvellous execution job," gushed Pradeep Pandey, CEO of Gelina Inc., a San Jose, California-based VC.

Day Three and Four

The India shining story continues. The morning is packed with case studies on Konkan Railway, the Department of Space and Microsoft. But some of the VCs take this opportunity to make up for the sleep they haven't had in the last few days. However, everybody turns up for the tour of the companies in the afternoon. On the itinerary: Ashok Soota's MindTree Consulting, where Walden International is an investor (its Managing Director Danial Faizullabhoy is part of the delegation), and the Intel Development Centre. "The idea is to show how US companies are working in India seamlessly and even ramping up," says an organiser.

When the VCs reach vMoksha Technologies, a two-year old it start-up, its Chairman and CEO Pawan Kumar makes a pitch for raising $5.5 million. But the bone-weary delegates are in a hurry to get back to the hotel. They want to catch a power nap before they head for the dinner hosted by the state's it Minister D.B. Inamdar at Hotel Taj Residency. Besides, there's an evening of carousing organised by Microland's Pradeep Kar at Spinn, one of the hottest pubs in the Garden City.

Next morning, there are more deal flow meetings, with 10 companies presenting their proposals. Each one gets seven minutes to make the pitch, followed by a three- minute question and answer session. The hopefuls include Chetan Maini of Reva Electric Car, Villoo Morawala Patell of Avestha Gengraine and Ram Kumar of Tarang Software, which specialises in retail banking software.

The highpoint of Bangalore trip is the visit to Infosys campus, a 45-minute drive away from the city. Nandan Nilekani, CEO of Infosys, leads the delegation straight for lunch to savour mutton biryani, grilled fish lemon, dal, rice and and alu masala, and followed by an Infosys version of the India Shining story. To a question on how the company is prepared to meet the ruckus on outsourcing, Nilekani replies, "It's a political issue and is more because of a jobless recovery in an election year." Raj Jaswa, who had ragged Nilekani when they were hostelmates in IIT Bombay, tries again. "If you were to run a cross-border fund, which are the companies you will be investing in India?" he asks. That's a tough one for Nilekani. "It's not a fair question," Nilekani blushes, "There are several companies with billion-dollar potential. It's up to you to figure out where to put in the money." Bangalore wrapped up, we head for Hyderabad.

Day Five

Our first stop in Hyderabad is the Gachibowli campus of the Indian School of Business, where the deal flow meetings are scheduled. The session starts with CST Ltd, the first old economy company the VCs have met so far on the trip, which wants to raise $2 million for expanding its welding tube manufacturing business. Soon after its Managing Director G. Ram Chaitanya Reddy's presentation, I see Hemang Dave, Managing Director of Celerity Ventures, chatting up with him and exchanging cards. A deal in the offing? Dave, a member of TIE's Boston Chapter, is so excited that he is planning to organise a trip to India from Boston for VCs, academics and even investment bankers. "This is a good familiarisation exercise and we can understand what is happening on the ground," says Dave

Pramati Technologies, founded by Jay Pullur, an ex-Wiproite whose business model itself is based on commoditisation of software products, also attracts some interest. Pullur is raising $4 million and is looking for syndicate partners to join a Silicon Valley VC who has already agreed to invest in his company. I see Farrokh Billimoria, Managing Partner of Artiman Ventures, and Naren Bakshi of JumpStart talking to Pullur on the sidelines. Some VCs are dropping out of the scheduled visit to Satyam Computers campus so that they can pay a visit to Pramati's office before catching the 7.30 p.m. flight to Delhi. Good luck, Jay.

Day Six

Back home, I hear that half-a-dozen VCs have taken a night ride to Agra to see the Taj. They are back half past eleven the following morning, bleary eyed, but excited. Top of the day's agenda is a panel discussion on micro-management by VCs, and Billimoria of Artiman Ventures helpfully suggests that companies should do due diligence of the VCs by investigating their portfolio companies! Jaswa says that the challenge for India is to get Silicon Valley funds to invest directly into the country. Most of the debate is carried on by various participants in the networking session later in the evening. The highpoint: a meeting with President A.P.J. Abdul Kalam at the Rashtrapati Bhawan. From there, the VCs go straight to the airport for their flight back to America. Here's what I am hoping will happen: If their six-day sojourn didn't impress them enough to return to India, the half-hour meeting with Kalam will.