Category Archives: VCs

VCs back in the reckoning

The venture capital sector is finally bouncing back from its post-bubble blues, although it’s still a long way from the euphoria of the late 1990s. Blockbuster deals — like YouTube’s recent sale to Google for $1.65 billion and Skype’s sale last year to eBay for $2.6 billion — are giving venture investors new confidence in their ability to cash out, said a group of venture capitalists who spoke on a panel at the 2007 Wharton Economic Summit. In addition, new sectors like “clean tech,” an umbrella term for environmentally friendly technologies, and trends like the aging of populations in the developed world are creating promising investment opportunities.

More at Knowledge@Wharton

VCs going gaga over Freemium model?

FreemiumsĀ are services that lure users in with a basic product, then charge for more featuresĀ 

In these days of Web 2.0 services that rely on quick customer adoption, the strategy has become so common that VCs have coined a term for it: freemium.

We’re talking about companies like Six Apart, which offers its LiveJournal blogging platform for free and has sold 2 million of its customers a premium version, which costs $20 for a one-year subscription.

More at Business 2.0

Rajesh Jain@Wharton

I believe we need a new approach to venture capital in India.
There is a very limited legacy, so it’s not going to evolve the
way the U.S. did or even perhaps the way China did. In India
there are lots of gaps across multiple value chains. Sometimes
a service fails to take off because some parts along the value
chain are not appropriately digitized. What ought to happen is
a large amount of investment across building out an ecosystem
of companies. Instead of waiting for an entrepreneur to come
up with a business plan, venture capitalists need to be much
more proactive. They should say, “The capital is available, now
let’s find a CEO for this business and back that person with
funding. Let’s start multiple companies based on what we have
seen in other countries, and what we think the opportunities
are in India.”

This is a very different, inside-out approach, where you end
up flipping the model around. That requires much more work.
It will not work if the core venture capital team lives abroad
and just comes to India once in a while. We need people on
the ground who understand the realities of India today, who
understand how the technology is evolving, and who can
make bets on what the future is going to be.

Knowledge@Wharton Full interview here