Indian Entrepreneurs Take Charge

FRAMINGHAM (04/03/2000) - Almost half of all H-1B visas were granted to Indian nationals last year, according to the U.S. Immigration and Naturalization Service. China ranked second, grabbing just 9 percent of the visas.

But increasingly, Indians are doing the hiring themselves. Thanks in large part to mentoring and organized networking efforts, more Indians are heading technology companies of their own.

In fact, this phenomenon has prompted the magazine Silicon India to create the Si Tech Index, which tracks the performance of 20 firms founded and managed by Indians both in the U.S. and India. The stock index jumped more than 200 percent last year. That's compared with 19.5 percent for the Standard & Poor's 500 index and 102 percent for the Nasdaq 100.

Most Indian-led technology companies are no more than 3 or 4 years old, according to Christine Comaford, managing director at venture capital firm Artemis Ventures in Sausalito, California. "Before that, it was a rarity" to see Indians at the helm of startups, she said.

Better Networking

One major reason for the change has been more organized networking among Indians, said Comaford.

The IndUS Entrepreneurs (TIE) has emerged as the pre-eminent networking group for Indian entrepreneurs.

TIE hosts monthly Angel Forums, in which budding entrepreneurs pitch their business plans in hopes of receiving angel investing or mentoring from charter members. Last year, 37 venture capital firms were TIE sponsors, said the group's executive director, Bakul Joshi. He said he hopes to attract 60 this year.

Sunil Wadhwani, CEO of iGate Capital Corp., an IT services holding firm in Oakdale, Pennsylvania, estimated that he has provided between $250,000 and $500,000 in angel funding to Internet companies founded by Indians during the past year.

But an entirely different scenario existed 10 years ago, said Wadhwani.

"This network was pretty weak," he said.

In fact, Wadhwani launched his company without any venture capital funding. The first time it got outside help was three years ago, when Wadhwani took the firm public.

Even just five years ago, the outlook was bleak. In 1995, K. B. Chandrasekhar, chairman of Santa Clara, California-based Exodus Communications Inc., said he "knocked on the doors of every venture capital firm," but the view was that Indians, while skilled technically, didn't possess the managerial talent to lead new companies.

"The credibility of India was not high [at the time] because few [Indians] had been entrepreneurs," said Chandrasekhar, who is also CEO of Sunnyvale, California-based application service provider portal Jamcracker Inc.

In fact, Chandrasekhar's firm was on the verge of bankruptcy when TIE members helped him with an initial $700,000 in funding.

Srini Anumolu, co-founder of Sunnyvale-based eLance Inc., an electronic marketplace for services, said the Internet also has aided Indians.

Before he co-founded eLance in 1998, Anumolu had tried unsuccessfully to run a start-upin San Francisco during the early '90s. But back then, the environment was tough, he said. People needed a lot of capital and a sales distribution channel.

"The Internet levels the playing field" because you don't need a dedicated sales force or shelf space in stores to get a new business running, Anumolu said.

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