It's yet another classic case of the Indian Silicon Valley entrepreneur looking back home to be a part of the Indian IT revolution. Lata Krishnan co-founder and CFO of US-based Smart Modular Technologies (recognised as one of the 100 fastest growing public companies in the US by Fortune Magazine, later acquired in 1999 by Solectron Corporation for $2 billion) is looking at investment options in India. The company at the point of acquisition was touching revenues of $1 billion with over 1800 employees worldwide. Krishnan, now an active investor in Silicon Valley start-ups shared some points with The Financial Express in an interview with Mini K Joseph and Kavitha Rajasekhar. Excerpts:Could you tell us about your current investment activities?
I am currently a part of a group of Silicon Valley investors -- Angels Forum -- consisting of 25 people who actively review business plans and invest in new start-up ventures in and around the Bay area. This is however not a fund, but a group of investors who invest in companies that we are interested in. All investments are made in personal capacity.
Could you comment on the investments the group has made so far?
We currently review over 20 business plans a week. And at this point, what I can say is that in two years we have invested in 43 companies operating in a number of segments including technology, medical devices, pharmaceutical, telecom, infrastructure and consumer products. We are not totally specific to IT investments.
What have your personal investments been?
Of the 43 companies, I have invested approximately in 15 companies. In dollar terms, I might have invested close to $12 million.
Do you have any plans for investments in India?
Currently I do not have any direct investments in companies in India. However, I am getting a number of investment proposals through TiE (The Indus Entrerpreneurs) India. While I am not looking at direct investment in start-ups, I am open to putting in money into funds operating out of India. The focus however would be on the technology segment. I am currently in discussion with people on this.
As an angel investor, what is the trend you are seeing? What are your impressions on funding start-ups?
With the boom in the IT segment, one is currently seeing a number of young people looking for investments to float their ventures. As investors we are also stake holders in the companies that we invest in, so there is a need to be careful about investing with the right people with the relevant amount of experience. However, we are not against investing in companies floated by young people.
One should always understand that a co-founder need not necessarily head the company as CEO and therefore be open to handing over charge and strategising of his business to a more experienced hand. Investors fund the companies and back the management, not the other way around.
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