"I would do this job even if I was not paid for it," says Naren Gupta, one of the founders of Nexus Venture Partners. The best people in the world have quirks and entrepreneurs some more, he says. "Working with those quirks and seeing them build world class businesses in front of you is a joy."
Gupta likens his role to sitting outside the boxing ring and watching a fighter develop his moves through the bout. He believes in picking the right people rather than over-analysing a business model.
"Business plans of start-ups change but people do not." Put an entrepreneur in the picture and you have Anand Babu Periasamy of Gluster as a good example. Periasamy, hailing from Tharamangalam, a small town about 22 km east of Salem, Tamil Nadu, is a 1999 computer sciences graduate from Annamalai University in Chidambaram, Tamil Nadu, who went on to cofound cloud storage venture Gluster in 2005. It raised $12.5 million from Nexus and Index Ventures in two rounds, and was sold for $136 million to Red Hat, an open source solutions vendor, in October 2011.
A team of self-starters and entrepreneurs makes it easy for Nexus to empathise with start-ups. Our fi rm brings value to the strategic thinking of a new business: Sandeep Singhal
Though the Nexus team functions with a loose but dominant focus for each partner, one reason why it does well is also because "we take into account the partner interest and the chemistry with the founder of the startup business", says co-founder Suvir Sujan. He sums up Nexus's ability to help entrepreneurs into the 'art' acronym with the alphabets standing for accessibility, relevance and trust.
Its team of self-starters
and entrepreneurs makes it easy for Nexus to empathise with start-ups
, says Sandeep Singhal, also a co-founder, adding his firm brings value to the strategic thinking of a new business. For instance, in Gluster's case, Nexus partners insisted on "simplifying the product to the extent that it can be deployed in an afternoon", he says. Deployments shot up almost overnight.
Says Periasamy: "Nexus as a team was far more valuable than the investment that they made." That included inputs on strategy, customer introductions and help with recruitment. He had had a frustrating time with another venture capital (vc) firm with a signed termsheet for a period of three to four months prior to meeting Nexus."Many VCs behave as money managers. With Nexus, they understood our idea on the first day and the decision was taken within a week," he says.
Greywater, a wastewater management company, is one of the few brick and mortar companies in the Nexus portfolio. Nexus partners act as sounding boards for the Greywater's 52-year-old founder and Managing Director Harshad Bastikar. "They have helped me meet people that I either could not have met on my own or I knew I wanted to meet," he says. Whenever he calls the Nexus partners on any issue, Bastikar adds, he knows he will get a reply the same day.
It has not all been easy pickings for Nexus, though. The firm has gone through its own learning curve. For instance, the mobile value added space proved challenging for the firm in the case of Mobile2win because the space just did not evolve as the fund had imagined. Yet, as Gupta says, "the intention is not to avoid mistakes but to make sure that we manage them and learn from them. We would rather fail in action than because of inaction".
Gupta believes backing the right people is more important than getting fixated over a business model and finances of a company. "Business plans of start-ups change but people do not," he says. The toughest job, according to Sujan, is of trying to convince entrepreneurs not to sell too early.
"We are early stage investors. We are not dealing with spreadsheets. We are emotionally involved," says Gupta. If that emotional involvement leads to returns, it is a sure shot stab at success.