Dr Pramod Haque, General Partner, Norwest Venture Partners

Dr Pramod Haque has the distinction of being the top ranked Venture Capitalist in the world as rated by the Forbes magazine in its ‘Midas’ list - a list of the top ten Venture Capitalists in the world. Dr Haque is an early investor and a board member of several technology companies including Tivoli Systems (acquired by IBM) and Forte Software (acquired by Sun Microsystems). Prior to joining Norwest Venture Partners, Dr Haque spent 18 years in various public and private companies with responsibilities ranging from product development to marketing. He has also been Chief Operating Officer and Chief Executive Officer in some of these companies.

Dr Haque gave an overview of the global venture capital industry and linked the present conservatism among Venture Capitalists (VCs) to the dotcom bust. He said that while many VC Funds were keen to do business in India and China, several factors such as absence of encouragement for innovation, uncertain exit routes for investments, and poor intellectual property protection were inhibiting them.

He explained that Norwest Venture Partners (NVP primarily focuses on early stage investments in enterprise software and communication technologies. However, it also invests in later-stage companies with existing customers, strong sales and top tier management teams, and in “Special situations” that represent definable, unusual opportunities. While evaluating new investment opportunities, NVP looks for breakthrough projects with world-class technologies, a large marketplace opportunity with a unique value proposition to the customer, customer validation, and capital efficiency.

Dr Haque stressed the importance of disruptive technologies in driving wealth creation. He added that innovations do not happen in vacuum but as a collaborative effort between customers and innovators. He believes that good VCs must take a long-term view of a sector and fund innovations across the entire chain. For example, a VC who views the prospects of the telecom sector favourably should fund ideas in components, systems, software and services.

As regards the founding team, NVP assesses whether the skill sets of the founders are balanced and complimentary, and whether they have a proven track record and domain expertise. It also assesses their ability to articulate their vision to investors, employees and customers. Their willingness to understand their limitations and to be accountable to a board of directors is an important part of the assessment. NVP invests in teams that are focused, tenacious, persistent and patient in their execution, and willing to enlarge the “inner circle” of managers as the company grows over time.

He concluded by saying that NVP views India as a great investment opportunity. NVP’s interest in India stems from the fact that the Indian telecom market is the 5th largest market in the world, the Indian IT sector is showing robust growth, and the Indian outsourcing industry is well placed to take advantage of the huge outsourcing market opportunity. Responding to a question that was uppermost in the minds of many in the audience, Dr Haque said that the trend towards outsourcing would continue, as the gains due to improvement in business efficiency are too large to ignore.