Valley VCs try to recreate Silicon Valley in Bangalore

Cover story in Business World.

The second coming
The Valley VCs are back. This time, they are trying to recreate the Silicon Valley in Bangalore.

Every other month, 37-year-old Murali Aravamudan does what US entrepreneurs setting up development centres in India usually do: catch a flight to Bangalore and hire engineers. Veveo.tv, his six-month-old, Massachusetts-based start-up, is developing an IP-based platform that will enable the transfer of video clips over IP networks. It will allow television viewers in, say, the US to watch a channel from the UK or Saudi Arabia through his broadband connection. All par for the course, except for one interesting fact: the decision to base 95 per cent of Veveo's core development work in India was taken even before the firm was created.

Veveo is among a batch of five US-based start-ups that are being incubated in Bangalore. Usually, tech start-ups in the US tend to relocate up to 50 per cent of their R&D work to India after a couple of years of operation. But not these five start-ups. They were incorporated as US companies, in and outside Silicon Valley, less than six months ago. And they plan to do almost all their product development out of India, except maybe some concept design. What is more, these start-ups work with cutting edge technologies. In fact, some of the next generation technologies, especially in the wireless space, that will hit global markets in the next three to four years could well be born and fashioned in India's Pub Capital.

The arrival of these start-ups could well coincide with a string of recent developments in Silicon Valley that suggest that the epicentre of control in the tech world could be shifting to Asia. But that's the future. And more on it later. First, let us find out how these five start-ups got here? The answers to that question lie on the top floor of a spanking new building on Brunton Road in central Bangalore.

Beyond the chrome-and-glass reception area is a display symbolic of California: more than a dozen wine bottles from Napa Valley - mellow reds and dry whites - line the left side of a long corridor. A row of 10 cabins run down the opposite side. This is the Silicon Valley Bank's (SVB) four-month-old India office - the bank's first in Asia. Since October 2004, 10 of Silicon Valley's most influential venture capitalists (VCs) have taken up residence in those cabins. SVB's Bangalore headquarters is informally referred to as Sandhill East. "Sandhill Road is home to the majority of VCs in the US and California," explains Ash Lilani, head (global sales and marketing), SVB.

Take a look at who's here. Norwest Venture Partners' managing partner Promod Haque is a frequent visitor. Two Norwest portfolio companies, one of which is Veveo, are being incubated on the premises. There's Dinesh Vaswani, who represents Bessemer Venture Partners, one of the Valley's oldest VC firms. Mobius Venture Capital's managing director Rex Golding was in residence briefly last December. Mumbai-born Shirish Sathaye, general partner at Matrix Partners, was here in October just after the bank opened shop. He plans to be back later to take a closer look at potential entrepreneurs in the wireless space.

These firms and six more signed up with SVB last year to use the Brunton Road facility as a springboard to enter the Indian market. In the Valley, these funds have had a distinguished track record of successfully betting on emerging technologies. "If you look at the Valley 21 years ago, [it] was kind of where Bangalore is today. In the early 1970s, venture capital was just beginning, companies were starting out and people were beginning to take risks," says Lilani.

At the height of the dotcom boom, between early 1998 and late 2000, US venture capitalists pumped in close to $1 billion into India. Much of that money had to be either written off or is still being recovered. Many of the top-notch VC firms that set up operations then - Draper, Chase-Indocean, Carlyle, Chrysalis Capital and eVentures - have either withdrawn from India or morphed into private equity investors. Today, only two home-grown VC firms play in early-stage technology deals - JumpStartUp Fund and WestBridge Capital Partners.

The arrival of the VCs at the SVB facility marks the return of the tribe to India. There is an important difference this time though. At its core, Silicon Valley is essentially an amalgam of money, men and ideas. It is this ecosystem that has been missing in Bangalore. What this new band of VCs is trying to do is knit together such an ecosystem, which will bring venture capital and the appetite for risk back into the market. The objective: to create an environment that will encourage fresh tech entrepreneurs to bring ideas to the deal table - much like the ecosystem many of these firms helped create in the Valley two decades ago. Of course, none of this would be possible without critical support systems like legal and accounting experts and banking services that focus on early-stage, VC-backed companies.

Since it doesn't have a licence yet, SVB has tied up with Standard Chartered Bank in India to cater not only to the local needs of its clients from the Valley but also, in time, to help finance locally groomed start-ups. Then there are the legal experts. Mumbai-based law firms Nishith Desai and Associates and Amarchand Mangaldas have been focusing on the cross-border space for the last couple of years. They have offices in the Valley too. In addition, Valley-based legal firms like Wilson Sonsini have also started using the SVB office here. Traditionally, in the Valley, lawyers have been a critical link in the whole process. Law firms can actually be a source of deal flow because entrepreneurs go to law firms first. They are, therefore, often instrumental in building the initial trust between the VC and the entrepreneur.

However, no money from the $20.8-billion corpus that these 10 VCs control globally will begin to flow in till this ecosystem falls in place. Over the last four months, though, there have been indications that the plan to recreate the Valley in Bangalore is progressing well.
But why are these VCs shifting their focus from the Valley to Bangalore?

To answer that question, we need to go back a bit in history. The dotcom bust was followed by a recession in the US economy, and companies cut back on IT spends. This was followed by a slowdown in the telecom sector as many big operators turned belly up. "When the industry began to emerge from these crises around 2002, one of the things that dawned upon everyone was that the exit valuations of companies had dropped. The new world was different," says Norwest's Haque.

During the boom, the average investment that a Valley start-up could expect from a VC was $100 million. That's because the average exit valuation was $1 billion. After the slowdown, exit valuations had dropped to $100 million-200 million. That became the new benchmark for a good exit. "If you spent $100 million to build a company and sold it for $150 million, that wasn't very good. I have to make six to seven times my money," says Haque. So VCs had to build companies with just $20 million-25 million, and stay in business; and start-ups which wanted VC money needed a business plan that focused on cost efficiencies.

But in the aftermath of the downturn, the Valley had become an expensive place to do business in. "Salaries and real estate prices had escalated 30-40 per cent during the tech boom. The downturn brought down salary levels but real estate prices remained high. Only 19 per cent of the population in the Valley can actually afford a house," says Sathaye. The downturn also caused an exodus of talent from the Valley, leading to a shortage of skills. A good percentage of these were Indian immigrant workers. "H1-B visas were not being renewed. California became an expensive place to live in. At the same time, India began to offer more challenging jobs, so people came back," says Lilani.

VCs and start-ups were now looking to build their products more cost-effectively and reach the market on time. And the very factors that made Silicon Valley drop out of the VCs' radar also helped India fly into it. "Product development required one-fourth the investment in India," says Ashok Narasimhan, chairman and co-founder, July Systems. July was among the first Silicon Valley start-ups to experiment with the US-India cross-border model. Last August, it raised $10 million in third round funding from a consortium of US and Indian VCs, which included Charles River Ventures, WestBridge Capital Partners and JumpStartUp Fund, NeoCarta Ventures and Silicon Valley Bancshares.

Also, since 2001, the return of the immigrant IT workers had helped India build up a million-plus talent pool. Rough industry estimates put the number of US-returned IT professionals now working in India at 35,000-45,000.

Around the same time, another factor with far more long-term implications was coming into play: many of the start-ups in the Valley realised that the markets for their products were shifting to the East. Though the US and Europe still remain the largest consumer markets for technology products, emerging economies like China, India, Taiwan and South Korea were fast becoming large markets by themselves.

While IT companies see India as a potential market in itself, it is also increasingly being positioned as a hub for accessing these local markets. That is because 90 per cent of the world's manufacturing is now being done in this part of the world. Indian technology start-ups like Ittium, Fedtec and Epigon are currently in the process of expanding their front-end presence in the Asia-Pacific. Several Asian tech multinationals already use India as a product development base. Chinese networking giant HuaWei, which currently clocks $7billion-8 billion in revenues in its home market, has 15 per cent of its engineers in Bangalore. Says Bessemer's Dinesh Vaswani: "Today, you can think of creating a tech company that is focused on the Indian market, hone your skills and go overseas over a period of time."

According to Matrix's Sathaye, over the next 10-15 years, global technology innovation will revolve around the wireless space - from infrastructure to application to services. India will not only emerge as a huge market but a lot of product innovation that is done for India will also go global. "ARPUs (average revenues per user) in India are so low that the innovation rate has to be higher to bring costs down. India could emerge as a huge test bed for global wireless products," says Sathaye. Matrix is currently investing the $500-million Matrix VII fund in India.

However, recreating Silicon Valley in Bangalore isn't going to be a cakewalk. For one, Silicon Valley's VCs themselves don't know the terrain in India well. "Most of them don't know what they want to do in India," says Lilani.

How, then, will the ecosystem be stitched together? The pivot around which this ecosystem will evolve is SVB's headquarters in Bangalore.

Founded in 1983 by a team of ex- managers from Bank of America, SVB's mandate was to bankroll young tech start-ups in Silicon Valley. Except that the mandate actually went well beyond opening a bank account and extending credit. Over the years, it has morphed into a networking machine that helps entrepreneurs hook up with lawyers, accountants and, most importantly, venture capitalists.

A few years ago, the bank decided to diversify its business risks and expand into other tech hubs in the world. So in 1998, Lilani was sent to India to lay the ground for a US-India forum that would bring Silicon Valley VCs and Indian tech entrepreneurs together. The result was an SVB-led reconnaissance mission by 20 of the Valley's top VCs to India in November 2003 (See 'The New Moneymen From Silicon Valley', BW, 2 February 2004). This was the first step in setting up a venture capital hub in Bangalore. Then, in October 2004, the bank invited its West Coast clients to take up residence at Sandhill East. Lilani expects two more VCs to join the 10 who have already signed up for India.

"This is a three-year commitment. It's not rent or sub-lease. It is more of a service consulting contract," says Lilani. This commitment implies two things. One, the VCs will use the SVB facility to help their portfolio companies, both old and new, move operations to India. Some of these will be relatively mature companies that will relocate a part of their existing R&D operations, mainly to Bangalore. Here, SVB's primary role will be to facilitate tie-ups with local vendors, help finalise office space and hire engineers. But its role as a catalyst will be magnified with respect to new start-ups like Veveo, which are looking to start R&D operations from day one in India.

In October, when Veveo's Aravamudan decided to make a trip down to Bangalore to look for people and office space, Norwest's Promod Haque suggested he use the SVB facilities. "The only reason I thought I was going to use the facility was as office space," says Aravamudan. He soon discovered there was much more to it. SVB's local team set up meetings with local recruitment firms and real estate agents. For the first one month of its operation, Veveo worked out of the SVB facility, interviewing candidates for its core development team and negotiating rates for office space. Since Veveo had already been incorporated in the US, it did not require the usual legal counselling that start-ups need. But legal firms Nishith Desai and Wilson Sonsini did counsel the firm when it came to negotiating terms with Indian vendors for its local tie-up requirements.

SVB's presence helped particularly in building the core engineering team of the company. Aravamudan had worked at building an India R&D base for his previous company, Winphoria Networks. "They [SVB] re-introduced some of the people we knew through Winphoria. So they would say, 'I know Winphoria, we did business with you guys'," he says. It helped cut down the time it usually takes - at least four months - to create goodwill in the market and bring in people. "Within two months, we had a dozen or so engineers, the core team, in place," says Aravamudan.

In the initial three years, a large part of the $20.8-billion corpus will flow in through start-ups and mature portfolio companies that will begin to move their R&D work to India. That's phase one of the plan. SVB expects 10 more fresh start-ups to be incubated at its facility by the end of the year. Since mid-December, more than 75 US technology companies have used the facilities to move operations to India. "Each of these VCs has a minimum of 50 portfolio companies. When you think of the multiples, we are talking huge numbers in terms of investment," says Lilani.

Lilani expects the VCs to move into phase two, that is, direct investments, two to three years down the line. "When they get down to direct investments, one thing we will have to do is identify deal flow," he says.
Next stop: The Middle Kingdom

Silicon Valley Bank's China strategy is to create a venture capital hub similar to the one in Bangalore. It will set up office in Shanghai later this year.

Last October, SVB's Ash Lilani led 25 Silicon Valley and Boston VCs, worth $50 billion in capital under management to China. Since then, Battery Ventures has become a member of the Chinese Venture Capital Association.

The VCs' intent for China is slightly different from that for India. "India will do the software design for the chip and China will manufacture it," says Lilani. Clearly, the VCs see India complementing China, which is also a huge market for their portfolio companies. Hot areas for direct investment include telecom, semi-conductors and Internet.

But for the action to actually get off the ground requires fixing some big missing elements in the ecosystem. The first of these is the entrepreneur. The first task that the men from the Valley have at hand is to find the right entrepreneurs to fund; if need be, they will have to create them. That's because both venture capital and private equity deals in India have largely taken place in the services space. "It's not that people elsewhere are smarter. The issue is that there is no context here because there hasn't been a history of product companies originating in India," says Vaswani.
They hope to find some of these entrepreneurs in the R&D labs of large tech multinationals in India. These labs are mainly run by Indian IT professionals who came back from the US. "Since the tech slowdown in the US, a large number of highly qualified engineers, people who've been exposed to global systems and processes, have come back to India. They come with eight to 10 years of global experience. That is a huge value," says Sanjay Anandram,managing director, of local VC fund JumpStartUp.

Over the next 12 months, SVB will hold a series of workshops and networking events which will have 20-25 young potential entrepreneurs interacting with VCs, lawyers and analysts. "Many of them are just beginning to understand how a venture capitalist works. One of the workshops we will do in early March will focus on educating entrepreneurs on what a VC does," says Lilani.

Unlike start-ups like Veveo, which had already got its seed funding in place before it approached Norwest for Series A funding, entrepreneurs here often have just a business plan in place and little else. Some don't even have a business plan. "They would need to be taught the basics of entrepreneurship. In the US they have courses. Stanford has courses on this. So we have to create it here," says Lilani.

So the task SVB has at hand is to identify and train entrepreneurs to get to the level where they can approach one of the VCs in residence for the initial $3 million-5 million. Word is slowly getting around. The usual channels are networking events organised by associations like the Bangalore chapter of The Indus Entrepreneurs (TiE). "We have a small community of entrepreneurs who know that Silicon Valley VCs are now accessible at the SVB office," says Lilani.

Also, to stimulate deal flow from the grassroots, SVB has started allying with academic institutions. It has initiated a tie-up with IIM Bangalore, which incubates start-ups on campus. IIT-Chennai is next on the list. "The 10 VCs here will get first access to the deal flow that is generated," says Lilani. The bank's presence brings one big advantage to the table, both for the VCs and the entrepreneurs. In the Valley, 275 of the 323 VCs operational today are SVB's clients. That means it knows exactly which VC invests at which stage, in which sector, and the deal sizes they prefer. "So we are in the best position to open the right channels," says Lilani.

There are two more missing links that have to fall in place before the ecosystem envisaged by SVB is complete. One, angel or seed investing, which necessarily precedes Series A funding ($3 million-5 million) by an early-stage VC, has disappeared from the Indian scene. "The greatest demand is from people who have an idea and need $100,000 to prove the idea. Nobody's giving that $100,000," says K.P. Balaraj, managing partner, WestBridge.

Second, in the Valley, when an entrepreneur starts out with a product, the initial customers are born out of close relationships that have been developed over the years. "If you have 10 such relationships, you can call on one or two to take a leap of faith and become your first customers. That's almost second nature in the Valley; it doesn't exist in India today," he adds.

WestBridge has been leading the efforts in Bangalore to plug the first gap. Balaraj is a key mover behind an informal forum in the city which helps young entrepreneurs to find start-up capital. The forum has been in existence for about three years now, but there are no official estimates available on the funding it has helped raise. It is still a small community, comprising primarily of VCs and members of the local TiE chapter, who volunteer a few hours every month to help young entrepreneurs gain access to funding from angels either in the US or in India. WestBridge also works closely with the Silicon Valley chapter of the Indian Venture Capitalists' Association to raise seed capital for Bangalore-based entrepreneurs in the Valley. The firm's Valley-based managing partner, Sumir Chadha, leads the initiative there. About 30 US-based VCs are now part of the association and actively look at deal-flow originating out of India. There has been a fair bit of success. Since 2001, these initiatives, along with SVB's own efforts to stimulate the US-India corridor (Lilani has had a team in place in India since 1999, long before the Bangalore hub was envisaged), have helped raise close to $2 billion in the cross-border space.

But since many of these VC funds are first-time investors in India, finding the right deals will not be easy. This is where the local funds, JumpStartUp and WestBridge, come into the picture. "There is no way they can source deals here the way we can," says JumpStartUp's Anandram. It's a view that is endorsed by Ashok Narasimhan. "Indians have to be in the VC DNA to understand the market here. If you look at the profile of general partners that represent the firms here, a lot of them are of Indian origin," he says.

JumpStartUp started doing US-India cross-border deals as early as 2000, the same time that WestBridge did. Some of its significant investments include July Systems, Nth Orbit and Net Devices. What makes it a good fit for collaborative deals with the Valley VCs is the way it has been modelled. "We're modelled on exactly the same concept as a Silicon Valley VC."

What it implies is that the Silicon Valley VC model goes beyond just writing a cheque. It extends into strategic guidance, operational expertise, constituting the core management team and helping with initial customer introductions. JumpStartUp is able to offer these value-adds because two of its three founding members, Anandram and K. Ganapathy, have over 15 years of experience on the operating side of the tech business. (Former Draper India chief Kiran Nadkarni is the third founder.)

Indeed, that is yet another aspect that distinguishes the current wave of investors from the previous one. VCs like Shirish Sathaye, Pramod Haque and Yogen Dalal have been entrepreneurs themselves. "The gene pool is very different. Having operating experience does not guarantee success but it certainly helps," says Vaswani, who raised a start-up in the Valley in the early 1990s before turning into a VC.

Both WestBridge, which is backed by Goldman Sachs, and JumpStartUp operate out of Bangalore and Silicon Valley. Both have collaborated with Valley-based VCs on cross-border deals. "The biggest change that we see now in the cross-border model is that India is now a default standard. It is a must have from the technology side," says Balaraj.

That said, neither Anandram nor Balaraj is betting on the Valley VCs unleashing serious direct investments in India. "The reason for their existence is to do deals in the Valley. If they have a 100 companies in their portfolio, two or three will be Indian," says Anandram.

Scepticism aside, it is important to note that two of the biggest VC deals out of India in recent months were driven by US firms. In January, Battery Ventures led a $15-million investment in Bangalore-based optical networking systems start-up Tejas Networks. Intel Capital, IL&FS Investment Managers and Silicon Valley tech entrepreneur Gururaj Deshpande, who founded Tejas, were co-investors in the deal.

Earlier, in August 2004, July Systems had raised $10 million in a third round of funding led by Charles River Ventures. "There needs to be a fresh approach to the way India investments are accounted for. Most industry estimates don't take cross-border deals into account because the company is US-based. They have to realise that often up to 80 per cent of the money invested flows into the India operation," points out Lilani.

Tejas is a good example of the kind of company that is likely to see direct investments from Silicon Valley VCs. Founder Gururaj Deshpande is a hugely successful Indian-American serial entrepreneur in the Valley and Tejas is his first pure Indian start-up. When Deshpande started Tejas, his plan was to approach the cross-border model from the other side: incorporate an Indian company, which would build products for the local market and use the Indian experience to move overseas. That's because he sees India as an ideal market for testing and proving product innovation in telecom-related technologies.

July Systems came the other way. Ashok Narasimhan says the decision to split the senior management between Silicon Valley and Bangalore was taken at the beginning itself. For him, one of the most important elements to make a cross-border venture work is to have India in the game plan from day one. Co-founder Rajesh Reddy, therefore, moved base from the Bay Area when the company was set up. "Even if the guy has been away for 15-20 years, his Indian sensibilities would be of far greater advantage as compared to a total stranger to the Indian market. A non-Indian American would not be able to fathom the role of the government here, for instance," he says. Moreover, Narasimhan adds, Indians have been in the fabric of the VC culture in the Valley for two decades and, therefore, understand both cultures.

As both VCs and entrepreneurs like Narasimhan and Deshpande see it, product innovation will drive the next wave of entrepreneurship in India. There is already ample evidence to show that a fairly high percentage of global product development work gets done in the country. But most of the activity has remained below the radar. One of the reasons is that a large part of the work is being done in the development labs of large IT multinationals.

Take the case of chipmaker Intel. It has 3,000 engineers doing core development work on its Centrino chips in Bangalore. Texas Instruments has its global centre for wireless LAN and semiconductors R&D based in India. It currently has 1,300 engineers on its rolls. Networking giant Cisco has 1,000 engineers as direct employees and 2,500 engineers through partnerships, working on ASIC chip design. And all this has happened within a span of just two years.

Since 2003, tech multinationals have filed 1,700 global patents for products developed out of India. "This is core R&D for a specific product line, run out of India. [But] people don't want to talk about it because India still suffers from a terrible brand image," says Anandram.

But before India can lay claim to being the next hub for product innovation, it will need to demonstrate a couple of big successes. "Success breeds success. We need a couple of home runs in terms of big-ticket exits to really establish India as a centre for product innovation," says Narasimhan. As he sees it, most of the Silicon Valley VCs themselves are learning about the cross-border model.


It helps that many of them have Indians leading the move into India, like Yogen Dalal of Mayfield, Dinesh Vaswani of Bessemer, Shirish Sathaye of Matrix and Promod Haque of Norwest. "After all, a lot of the movement is cultural," says Narasimhan. That may be a good thing because India may not have much time to catch up.

Lilani is already on his way to setting up an office in China, which will ape the Indian model. He had led a delegation of VCs to China in October. How much money flows to either country from the common pool will now depend on which one moves faster.


The Bangalore ecosystem

SILICON VALLEY VCs
Matrix Partners, Mayfield Fund, Battery Ventures, Bessemer Venture Partners, US Venture Partners, Mobius Venture Capital, Norwest Venture Partners, TeleSoft
Partners, Trident Capital, Worldview Technology

INDIAN CROSS-BORDER VCS
WestBridge Capital Partners,
JumpStartUp Fund LEGAL FIRMS
Wilson Sonsini

SILICON VALLEY BANK
Ash Lilani, head (global sales
& marketing)BANK FOR START-UPS
SVB has tied up with StanChart to finance local start-ups, and also the local needs of its Valley clients

MISSING LINKS

Entrepreneurs with fresh ideas
Angel investors with seed funds
Networks for start-ups to tap into

Shirish S. Sathaye, general partner, Matrix Partners

* Funds under management - $1.5 billion
* Funding stage - Seed to early stage ($100,000-10 million)
* Sectors - Wireless, software, semiconductors, storage & communications equipment
* Portfolio Successes - Apple Computer, Veritas Software, Tivoli Software, Sycamore

Yogen Dalal, MD, Mayfield Fund

* Funds under management - $2 billion
* Funding stage - Seed to early stage ($1 million-3 million)
* Sectors - Enterprise software, consumer services and communications
* Portfolio Successes - 3Com, Silicon Graphics, Genetech

Ash Lilani, head (global sales and marketing), Silicon Valley Bank

Mark Sherman, general partner, Battery Ventures

* Funds under management - $2 billion
* Funding stage - Early stage ($5 million-25 million)
* Sectors - Application software, network and wireless infrastructure, semiconductors, media and content
* Portfolio successes - Pixelworks, Banyan Systems, SigmaTel

Dinesh Vaswani, entrepreneur-in-residence, Bessemer Venture Partners

* Funds under management - $1 billion
* Funding stage - Seed to early stage ($1 million-10 million)
* Sectors - Biotech, communication services & software, data security, optical, healthcare
* Portfolio successes - Verisign, Cascade Communications, Gartner

Steve Krausz, general partner, US Venture Partners

* Funds under management - $2.8 billion
* Funding stage - Seed to early stage
* Sectors - Internet, communications software, semiconductors, medical and consumer products
* Portfolio successes - Sun Microsystems

Rajeev Batra, principal, Mobius Venture Capital

* Funds under management - $2.5 billion
* Funding stage - Early stage to mezzanine ($2 million-5 million)
* Sectors - Communications and services, enterprise application software, healthcare
* Portfolio successes - Atreus Systems, Evant, Stratify

Promod Haque, managing partner, Norwest Venture Partners

* Funds under management - $1.8 billion
* Funding stage - Early stage ($3 million-10 million)
* Sectors - Enterprise software and communications
* Portfolio successes - PeopleSoft, C2C (Asia-Pacific submarine cable system)


Indian American cross-border entrepreneurs

From Palo Alto to Santa Clara, Indian-American entrepreneurs have been an essential part of Silicon Valley's unique culture of making money out of ideas. Today, these entrepreneurs, many of who left India in the early 1980s to create successful US product companies, are retracing their paths to India. In time, they plan to replicate the same success in Bangalore. Ashok Narasimhan, chairman and co-founder, July System


Ashok Narasimhan, chairman and co-founder, July Systems

The former founding president of Wipro Infotech went into semi-retirement after selling his first Silicon Valley start-up, Prio, for $1 billion.

In mid-2002, he teamed up with Unimobile founder Rajesh Reddy to co-found July Systems, one of the first start-ups to fuel the US-India cross-border trend. July, which is building a wireless superstructure that knits together various parts of the wireless value chain - applications, networks, services and devices - has raised $18 million from US and Indian VCs over two successive rounds. Narasimhan mans the front-end in the US while Reddy heads product development in Bangalore.

Narasimhan's involvement with the Silicon Valley VC community extends to an advisory role on the boards of funds like Mobius and Battery. Gururaj Deshpande, chairman and co-founder, Sycamore Networks

Gururaj Deshpande, chairman and co-founder, Sycamore Networks

The Boston-based serial entrepreneur sold his first start-up, Cascade Communications, for $3.7 billion in 1997. He went on to co-found Sycamore Networks, which develops fibre optic-equipment. Sycamore debuted on the Nasdaq in October 1999 and posted a market capitalisation of $14.2 billion on day one. Deshpande's networth today is estimated at over $4 billion. He has now taken to his second role as angel investor and helps start one company every year.

In July 2000, Deshpande set up his first pure Indian start-up, Tejas Networks, in Bangalore. It plays in the optical networking space. In January this year, Tejas raised $15 million in its third-round funding that was led by Boston VC Battery Ventures. The deal marks Battery's debut in India.

Deshpande's vision for Tejas: "You take a domestic market that is growing rapidly within India, develop products for that market, perfect it for usage within India and then take the product global."