Meet Venk Krishnan, the man who first invested in MuSigma and has helped many startups get off the ground
NuWare Founder Venk Krishnan has helped script the success story of many startups, including MuSigma, Netkraft, Pocket Aces, Vokal, and ScripBox. He believes every entrepreneur should be able to focus, resolve problems, manage sales, and execute well.
The year was 2005. Dhiraj Rajaram was looking for investors. His idea of analytics-as-a-service was completely different from what IT services companies were then offering. They were busy integrating technology-led processes, but Dhiraj – the Founder of MuSigma – maintained that data produced by applications needed to be used intelligently.
He did not find any takers till he met Venk Krishnan who was in his second decade of entrepreneurship, and had built a small IT services business. His meeting with Dhiraj was about to change both their lives.
“I met Dhiraj at a conference. I was interested in the way the man was championing the idea rather than the idea itself. I just invested in the sheer confidence,” says Venk, the Founder of NuWare and NuVentures.
Everyone knows what happened after that. MuSigma became a Unicorn and Venk received a 200x return for a very small investment. Although he does not disclose the numbers, the exit was close to $5 million and he still owns some stock in MuSigma.
Venk invests around $25,000 to $50,000 in early stage startups. In the early 2000s, he funded Prashanth Prakash and Atul Jalan, who ran the business applications firm NetKraft, which was acquired by Adea Solutions in 2004. Venk was also part of Prashanth’s venture into the startup world - as an investor - before Prashanth set up Accel India in 2007. Atul went on to set up Manthan, which is considered to generate worth $100 million. Some of his other investments that have made it big include Vokal, CureJoy, ZPX, Pocket Aces, Your Dost, Coverfox, Scripbox, and Daily Ninja.
Apart from investing, Venk is an avid cricketer and has invested in players and the sport in the US. He was one of the first to run a cricket league in the New Jersey State. But startups remain his first love. Venk speaks to YourStory about how his past led him to the present and why entrepreneurs should consider every opportunity.
Edited excerpts of the interview:
YourStory: Over the last four years you have had eight companies go to Series A. How did you manage that?
Venk Krishnan: I don’t talk about myself much and don’t want the world to think I am the reason people succeeded. There is no logic to my investing. I got lucky. For me, it has always been about meeting entrepreneurs and their passion to execute things. I have invested in 17 companies. Eight of them have done well, going up to Series A; three companies have been sold; and others have had funding rounds from angel to seed. A couple of them have not done well.
What interests me is listening to ideas. When I meet someone, I know in five minutes whether the idea and the entrepreneur are in sync with each other.
I don’t want to judge anyone; I just wish them all the best. However, I have a network of good friends who get me to invest in startups. I believe that a successful VC has been an entrepreneur in the past. The jury is out there, but I built products and services in the nineties. I already had years of operational experience before I became a VC.
YS: Do you want to talk about Dhiraj Rajaram and what you look for in entrepreneurs in India?
VK: I have invested $2.5 million in all the startups in my portfolio. Most of the businesses I invested in were consumer driven.
So let me tell you why Dhiraj is the benchmark. What I liked about him was that he had the right narrative. When you meet someone you can make out that you can stick with that person for a long time. There are a lot of entrepreneurs who keep changing their thought process. I need entrepreneurs who can focus like Dhiraj. When you meet someone they should be able to tell you the problem and opportunity in 10 minutes. He had that ability.
Most entrepreneurs who want to be seed-funded do not have this ability. Founders should be natural sales people and they should have some operational experience. If you look at some of the best companies, one of the founders was always a great salesperson. Eventually, every founder manages sales. This is something that young entrepreneurs should realise.
Once they raise money, founders should be able to execute well. In the end, it is also my job to find them bigger investors. Most of the entrepreneurs I have invested in have been able to execute without many inputs from us, which is what I am proud about.
YS: Entrepreneurship is a big trend in India. What should rising entrepreneurs keep in mind?
VK: Today, everyone wants to be an entrepreneur. I keep telling entrepreneurs that they can focus on global scale and solve India-centric problems. One must remember that selling products (B2B) in India is a tough proposition, which is why for the last two decades Indians have been successful in the US. The market acceptance for new technologies is out there. That said, India is also changing, and changing fast.
In 15 years India will be bigger than what it is today in terms of using technology to serve Indians and the globe.
YS: How was it back in the nineties and when you started out?
VK: I was lucky to be in the US back then. If you truly believed in yourself, you could make it because the whole country is built on entrepreneurship. There were no mentors back then and I had to do it on my own. But I had already been inspired by the companies I worked for in the eighties. I was in Wipro, and every time Azim Premji spoke to the small IT team that we were in I would be in awe of that person’s ability to motivate us and make us deliver.
After that, at Infosys, Kris Gopalakrishnan, Narayana Murthy, and the team had a profound effect on me. I realised I could become an entrepreneur. I started by setting up a small IT services company out of New Jersey in 1996. I set up the company with other co-founders Karthik Visveshvaran, Neal Mukherji and Radha Krishnan co-founded NuWare in 1996. There were no lessons of failures, no access to capital and mentorship. I started off with NuWare, which served the financial services market in the US and built it from scratch. I had to win clients myself and hustle. It was a great time; the world of internet was changing things very fast in the US.
YS: You had a very good example of an experience which became a big business for you. Tell us what lessons young startups can learn.
VK: Let me give you an example of how you don’t let go of opportunities. I had the Mayor of New Jersey come to my office in 1999. I did not know why he came in. He told me that he saw the board NuWare and second-guessed that we were an IT company. He introduced himself and said he had a problem and wanted to know whether IT could solve it.
It was a great moment for me because I did not want to turn him down, although we were in the financial services industry. I listened to him like a good businessman must do, and realised there was a business opportunity in what he was saying.
He was telling me that the city council offices would be filled with queues of people paying their dues and the office could not handle it. The mayor also said the city had no money to pay the company.
I did not turn the man down. I said my team would build the product and give to the council for free, provided he let us own the product and market it to other councils across the US. He shook my hand and left. We delivered the project in six months and built a little company called Govxcel, which was sold for a good amount to an investor in 2002.
I spend time with everyone who want to talk business and I feel solving problems is something that interests me.