Startup Funding :

Venture funding works like gears. A typical startup goes through several rounds of funding, and at each round you want to take just enough money to reach the speed where you can shift into the next gear.

Few startups get it quite right. Many are underfunded. A few are overfunded, which is like trying to start driving in third gear.

I think it would help founders to understand funding better—not just the mechanics of it, but what investors are thinking. I was surprised recently when I realized that all the worst problems we faced in our startup were due not to competitors, but investors. Dealing with competitors was easy by comparison.

I don’t mean to suggest that our investors were nothing but a drag on us. They were helpful in negotiating deals, for example. I mean more that conflicts with investors are particularly nasty. Competitors punch you in the jaw, but investors have you by the balls.

Apparently our situation was not unusual. And if trouble with investors is one of the biggest threats to a startup, managing them is one of the most important skills founders need to learn.

Angels are individual rich people. The word was first used for backers of Broadway plays, but now applies to individual investors generally. Angels who’ve made money in technology are preferable, for two reasons: they understand your situation, and they’re a source of contacts and advice.

The contacts and advice can be more important than the money. When took money from investors, they took money from, among others, Tim O’Reilly. The amount he put in was small compared to the VCs who led the round, but Tim is a smart and influential guy and it’s good to have him on your side.

You can do whatever you want with money from consulting or friends and family. With angels we’re now talking about venture funding proper, so it’s time to introduce the concept of exit strategy. Younger would-be founders are often surprised that investors expect them either to sell the company or go public. The reason is that investors need to get their capital back. They’ll only consider companies that have an exit strategy—meaning companies that could get bought or go public.


Building on Performance – Construction as a Sector : Money Today

The construction sector has embarked on a secular growth path led by the boom in infrastructure activity across sub-segments(roads,ports,power,airports,railways,urban planning etc). We estimate investments of Rs 12,66,000 crore to flow into the Indian Infrastructure sector over 2008-12,which would translate into construction orders worth Rs 7,08,600 crore. Also, we believe operating margins would remain robust in the wake of escalation clauses & higher margins inherent in fixed price contracts.

Jaiprakash Associates (JAL): With proven capabilities in hydel power, construction & an order backlog of Rs 6700 crore, the company is well positioned to capitalise on the rich pipeline of hydel power projects.

Hindustan Construction Company (HCC) : With its proven capabilities across a wide spectrum the company has a diversified order backlog of Rs 7370 crore.

This articled report as on july 12th 2007 .

Proactive Leadership

What seperates the average leader from the successful leader? Is it power? Is it chance? Is it opportunity? Is it luck?

It is none of these. It is their ability to make things happen.“How often do I allow myself and my team to get caught up in practicing daily acts of trivia?”

I hope you answered this question honestly, because I want to challenge you to think about some follow-up
questions:“Do I have a clear understanding of the company’s most important goals?”
“If I don’t, do I challenge my leader to make it clear?”
“Do my peers understand them?”
“As a team, how can we improve ourselves to contribute too these goals?”
“Are there ways we can improve our communication within the team, the company, but more importantly,
amongst our peers?”
“Have I truly tapped into the skills of my team? Do I understand what they are truly capable of and what
skills they may have that I am not aware of?”
“What can I do to support my team better?

As a proactive leader, don’t you think you should be creating clarity in setting the path, direction, and vision for
the team?



BETA a measure of risk -By Sameer Bharadwaj & Narayan Krishnamurthy

The main tool used to calculate stock volatality is called beta.The beta of an investment compares it to the index movement as a relative measure of risk.

A positive beta means that the stock & the index have moved in the same direction. A beta of 1 for instance means that the stock has moved exactly 1% for 1% move in the index. A beta of minus 1 means that it has moved exactly that amount in the opposite direction.

A beta of less than 1 means that it is less volatile than the market while a beta greater than 1 means that it is more volatile. A beta of +0.50 for instance, would indicate that on an average , the investments returns move half as much as the markets do in the same direction.High beta stocks are the ones most sensitive to market volatality.

How can you track performance of portfolios? with Dipen Sheth of Wealth Management Advisory Services Here he gives us an extract of a model portfolio

We will track” the two portfolios” using methods similar to mutual funds with one important difference. Every fortnight, when we give you an update on actions , we will also release an NAV.  You can compare the change in that NAV to changes in the Nifty.

Suppose a mutual fund raises Rs 10lakh by selling one lakh units of Rs 10 each. It puts the money into various assets while also paying for its overheads, brokerages & meet any other expenses. The initial NAV is a little less than the initial price of Rs 10.As NAV rises , you can benchmark the appreciation versus a stock market index.

We will use a similar NAV- based method to track the two portfolios. We are assuming the portfolios were launched on an initial date .

Every fortnight , we will give you an update on the performance of the portfolios.