We have to be prudent in making investments

Let us begin with venture capital in the time of recession. What is the
current mindset?

The business environment is slowly getting better, but it is still a challenge
for young companies to generate revenues. As a result, most venture capitalists
are being conservative.

Are VCs moving away from any particular sector and focusing more on newer
areas for funding?

Our firm has never focused on the investment du jour, so we largely bypassed
the Internet bubble in 2000 and the telecom bubble more recently. That being
said, the economy always grows around certain governmental and societal
initiatives, and so clean tech will definitely provide growth for the economy on
a long-term basis, but is unlikely to provide the quick and stellar returns of
past bubbles.

Venetia Kontogouris,
managing director, Trident Capital

In a scenario where the general belief is that lower valuations could
present opportunities for VCs, are venture capital firms really spending?

Since existing portfolio companies are also impacted by the slowing economy,
more funds need to be set aside for follow-up funding for these companies when
appropriate. So, there is less availablibilty for new deals. In addition, there
is generally less money being put into venture funds, so VCs must be more
selective in making new investments.

What new possibility does India offer? How is the Indian scenario compared
to China?

Since the Indian consumer is somewhat lagging the pace of adoption of new
technologies as against its global counterparts, there are still many
opportunities here that have been proven successful in other countries. China
generally has moved faster in adopting new technology. With its fast-growing
economy and young population, India will continue to offer interesting
opportunities in many areas. The key will be political stability as well as
continued favorable tax treatment for offshore investors and infrastructure
development. We are in the process of raising new fund and are continuing to
make investments in our target areas. We remain focused on growth opportunities
in the software, payments and outsourcing space.

What are the new additions to your portfolio?
I believe there are opportunities in the wireless and payments areas.

Sanjeev Ramachandran/CIOL

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