Entrepreneurs and Venture Capitalists have an interesting relationship. We love their money, but we hate their anti-dilution clauses. When you think of VCs, you think of an Armani suit, and an Audi full of attitude.

Let me present a radical new idea: (Some) VCs may be good people.

This Friday I met one who may fall in this category. Mark Rostick is a Director (Eastern US) at Intel Capital, the VC arm of the famous chip-maker. He came to the MEM program to tell us about his work as a corporate VC, and how it is different from institutional VCs.

So first up, let’s define the terms. The VC world can broadly be categorized into Institutional VCs, and Corporate VCs. Institutional VCs are professional money managers who invest their funds into startups to earn a return. Corporate VCs on the other hand are funds set up by large corporations (e.g. Intel, TI, Cisco) to further a strategic objective, in addition to earning a good return. Corporate funds are typically less risk inclined, their investments are later stage, and a higher percentage of their companies make it to an IPO. So, if you want early stage money you’d probably want to talk to an institutional VC. It should be noted here that Intel Capital is re-writing the traditional rules for corporate VCs by investing early, and competing aggressively.

For Intel, the strategic element of their VC fund is quite straight forward: Invest in companies that will drive chip sales. If you’re wondering what that includes, its everything. From wireless technology to dot coms. In fact, a popular Indian website, indiainfo.com is funded by them, and when I later spoke with Mark, he told me that one of their most successful exits outside of the US, was an internet portal in Poland. So guys, internet is serious business.

With approximately 60% of their investments outside of the US, Intel Capital has a major focus on the developing world. They’ve invested over US$ 450 million in India and China, and have also made significant investments in the Middle East. Given how global Intel’s market really is, and the growth opportunity in South Asia and the Mideast, I’m not surprised at this focus. One thing is given though: We can expect a lot more coming to this part of the world. Good times ahead!

Does “Work hard” seem like clichéd advice? Well, that’s what I thought after Mr. Yogesh Gupta told us exactly that. I’ve heard “work hard” so many times since grade school that its just one of those things I casually dismiss. Coming from the Chief Technology Strategist of Computer Associates, however, I thought the advice warranted further consideration. When asked to clarify if his advise was really as obvious as it seems, it started to make sense. How many people actually work hard? I’m not asking about extra hours, but real work. How much time do you waste on the 9th floor of Technology Park drinking tea in the office cafe, or gossiping at the urinal (yes, people do that), or reading blogs at 10:00am in the morning? The answer: A LOT.

Cut the wastage, and do real work. Put in the kind of effort that adds value, take on important projects that no one wants to do, and just see where your career goes. From the average 10-hour day in my former corporate slavery life, I really worked for only 5. And you know what’s scary: I worked harder than my colleagues.

I think Mr. Yogesh is onto something here. “Hard work” may not be that obvious after all.

Mr. Yogesh, a senior CA executive, came to the MEM program to participate in the Night With Industry, and I got chance to lead a roundtable discussion with him. He immediately took charge, and disarmed the group with his sharp wit and warm personality. The discussion ranged from ubiquitous networking to entrepreneurship and everything in between. This is the first of three posts about his visit to MEM. Let’s start with his background:

After getting a degree in Electrical Engineering from IIT, Yogesh came to the US with his suitcase, and not much else. He enrolled in a masters program at University of Wisconsin, and paid for it himself by working part-time. Soon after graduation, he joined Cullinet, a company that was later acquired by CA. At CA he stayed in engineering and product development, until the CEO asked him to go out and sell the monster he had developed. And sell, he did. UniCenter, the product he developed, was a stellar commercial success. Roughly to the tune of a billion odd dollars. It created history as one of the greatest software successes of its time. He later took charge as the CTO, and now serves as the Chief Technology Strategist. In his current capacity, he is responsible for identifying long-term opportunities for CA. Yes that includes making cool acquisitions.

Key Take-aways: 1) “Hard work” works 2) When you’re a big shot executive, be willing to mentor students

Come out, come out, where ever you are. That’s the advise Ken Morse had to give to in-the-closet entrepreneurs at the OPEN conference in MIT. “Just do it”, is the wisdom shared by Mr. Morse, co-founder of 3Com, serial entrepreneur, and of course, the Managing Director of the Entrepreneurship Center at MIT. Ken Morse, with his usual, straight-faced humor, motivated and mentored at the same time. The central theme of his presentation was the work he is doing with the Pakistani government to promote entrepreneurship in Pakistan. A lot of cool things are coming up, like a Center of Entrepreneurship at IBA for which MIT and a consultant hired by USAID have laid down the structure and a “complete actionable plan”. I guess its up to IBA, and the Pakistani business community to make it happen now.

What Ken and Peter, the USAID consultant, had to say about entrepreneurship in Pakistan only re-validates what we have been seeing as students and professionals in Pakistan: The youth is a lot more entrepreneurial than the preceding generation. Most students in Pakistan who interacted with Ken and Peter, wanted to setup their own shop after working in the corporate world for a few years. The real question, however, is: How many will actually take the plunge? Not many, I suspect. But its encouraging that they’re thinking about it at least.

On the subject of young entrepreneurs, Ken expressed his disdain for kids straight out of college who set out to create the next Google. He feels that to create a real business, a sustainable success, an entrepreneur needs to be experienced and mature. Interesting advice from someone who started his first company straight out of MIT, and incidentally created the IP networking industry in its making. I do see the value in his advise though, getting the right experience can drastically improve chances of success, as you get to see the world in real Machiavellian terms, and learn how to deal with it. No school in the word teaches you that. Not even HBS and Sloan.

Ken’s presentation was followed by a talk by Umair Khan of Clickmarks fame. He had some counter-intuitive things to say. As you know, I love anything contrarian. More on his talk later.

Today, I met my first billionaire. With an estimated net worth of 4.3 Billion dollars, Mr. Deshpande is probably richer than the top 10 (legally) richest people in Pakistan combined. And then some.

He is an interesting case-study. Born to very middle class parents in India, Desh got into IIT on sheer merit, and then went on to get a Masters and PhD from Canada. That sounds like a pretty desi thing to do, get all the degrees you can get, and then find a tenure track position in academia or a corner cubicle in a laboratory. Desh did neither. Instead, he went and took the plunge into startup land, failed, started again, and has never looked back.

During our round-table lunch, I was surprised by two things: 1) How humble he is. and, 2) How practical his advice was.

When you ask an entrepreneur, any entrepreneur, if you as a young professional should jump right into the next-big-thing venture, or if you should join a big company to build a “profile”, the immediate response you get is: “What’re you waiting for, go start something up”

The advise I got from Desh was both practical and well reasoned. His response was to first ask yourself if your idea is bootstrappable or not. If it is, then go do it. If you feel the idea needs substantial capital, then you need to build a profile before financiers will trust you with their money. Some maturity, some gray hair are a plus. How do you build a profile? Well, its simple enough, you have to achieve something worthwhile, like launching a successful product, or being part of a winning team. The best place where you can get such experience is in a “good young company” as opposed to a “mediocre large company” or a “lousy startup”.

I mean, just think about it. In a large company you would be pigeonholed and specialized to a point where you’re useless outside of your little function, and in a lousy startup, you’ll probably have stupid people to work with, and the owners probably started the company because no one would give them a job. What you really need is a Good Young Company.

How do you know if a young company really is good? Just meet the people. Talk to the CEO and CTO, ask them about their backgrounds, and ask yourself if these are people you’d like to work with, people you can learn from. You’ll know the answer.

Dear Readers,

Yes, all five of them, sorry I’ve been away for some time. But you’ll be seeing a whole lot more of me now. After adjusting to graduate school in Duke, with adjustment essentially entailing sleepless nights, weekend parties, and frustrating cases, yes, I’m back, and so is Lootmaar.

Over the past few months, I’ve worked on two business plans, and have met with industry leaders from more industries than I can count. Some of the people I’ve met include:

Cheif Technology Strategist, Computer Associates, Yogesh Gupta
CEO, Sycamore Networks, Gururaj Deshpande
Author, 3 Steps to Yes, Gene Bedell
VP, Alltel, Jeffrey Fox
Founder, MercuryMD, Will Lawson

In the next few posts, I’ll write about what these people had to say and also how it relates to us, the young entrepreneur breed.

Lootmaar, ah, my long lost Mehboob (Urdu: Lover) we will be together once again. More on it later.