On Wednesday, Venture Capital Dispatch reported that Vineet Buch, a partner with BlueRun Ventures (former Nokia Venture Partners), is returning to entrepreneurship — post here. Buch is headed to Like.com, a visual search engine created by Riya Inc, which he co-founded in 2004 before becoming a venture capitalist with BlueRun in 2005.
It isn’t uncommon to see venture capitalists turn entrepreneurs. Buch, though, has done a U-turn to his original calling. In the past 12 months, since mayhem hit the US economy, several Silicon Valley venture capitalists have, reportedly, jumped over to the other side. Reminds me of the post-2000 period in India and notably two teams. Mumbai-based eVentures India’s Neeraj Bhargava stepped into Warburg Pincus as an entrepreneur-in-residence and came back with business process outsourcing startup WNS. His partner Sandeep Singhal set about building a healthcare services outsourcing company, Medusind Solutions, in Mumbai. In Bangalore, the Jumpstartup founder team turned to non-investing pursuits around 2004. Sanjay Anandram now teaches entrepreneurship at Insead, Singapore. He’s still connected to the investing world, but only as an angel and advisor. His colleague Kiran Nadkarni currently runs a fast-food chain in Bangalore, called Kaati Zone. And K Ganapathy Subramanian has started up mobile VAS (value-added services) company MyDuniya (which according to some reports has already shut down).
Some traded places because they felt they had to learn how to build companies before investing in them. Many had burned their fingers with reckless dotcom investments. Also, several came from business consulting and investment banking backgrounds and the inexperience came back to bite them when the dotcom dream ended. When I first spoke to BlueRun’s Buch in 2007, he had pointed out that “it is very important for a venture capitalist to have worked in at least one young startup” — see the Mint interview. Others thought it would be an interesting thing to do while they waited out the bad times.
Either way, Indian venture capital gained tremendously. The venture capitalists investing in India today, including eVentures’ Singhal, now with Nexus India Capital, are significantly more clued in to the mechanics of building companies. They understand the risks better and can trouble-shoot better. Compared to the startups that got funded back in 1998-2000, today’s startups have some advantages because of the kind of investor experience available to them. Plus, they have help from a bunch of dotcom entrepreneurs who have turned venture capitalists or angel investors in recent times.
The current investing cycle underway in Indian now will probably lay strong foundations for India’s still emerging venture capital industry. And, with or without downturns, we will see many more venture capitalists take to entrepreneurship — simply because the investing opportunities in India are so vast and complex that the only way to get a grip on them is to become part of them.
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