Financial Daily from THE HINDU group of publications
Thursday, Jan 10, 2002
Financial Daily from THE HINDU group of publications Thursday, Jan 10, 2002 |
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Info-Tech
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Venture Capital Venture capitalists' plea to Govt Our Bureau
HYDERABAD, Jan. 9 EXPERTS from the venture capital industry advised the Government to involve the stakeholders in funding their e-initiatives instead of looking for venture funding. According to the Managing Director and Chief Executive Officer of ICICI Venture Capital, Ms Renuka Ramnath, most of the e-initiatives of the Government were lacking independent value creating economic activity and even in the most optimistic situation, the Government projects were lacking economic viability. As the venture funds would strive for their pound of flesh in any of the projects funded by them, Ms Ramnath advised the Governments to involve the stakeholders - citizens and the hardware and software vendors - in funding the e-initiatives. Endorsing these views on the economic viability of Government projects, the Director of Walden Nikko India, Mr Sudhir K. Sethi, said the venture funds were not willing to risk their monies as they were highly conscious of return on investment (RoI). According to the Vice-President of the $130-million West Bridge Capital, Mr S.K. Jain, despite the recent downturn, the India outsourcing story still remained strong. Stating that IT-enabled service companies have commendable value proposition, he said software services firms spinning off Internet Protocol activities into separate product companies were also emerging as the targets of the venture funds. The emerging areas of focus of the VCs include companies developing enterprise software, semi-conductor firms and wireless firms. However, Mr Jain said the market terms and valuations were changing and VCs were now preferring to support the companies based on the mile stone payment model as against the single tranche funding adopted earlier.
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