Raju Rishi is a venture partner at Sigma Prime, one of the country’s leading venture capital firms. With more than 20-years experience as a technology entrepreneur and executive, Raju knows what it takes to develop an idea, create an early-stage company and develop it into industry-leading company. PAN Communications EVP Mark Nardone recently sat down with Raju to discuss evaluation criteria, trends and the next big thing. This is the second installment of a three-part series.
What’s the current momentum for venture investing?
I’m not as intimate with the West Coast, but venture investing across the East Coast certainly continues to accelerate. Boston has always had a great foothold, but growth in NYC is unprecedented, and we’re seeing markets such as Philadelphia, DC, and Atlanta blossom, as well.
Each region in the East Coast possesses unique characteristics and strengths. For example, Boston has a more seasoned eco-system for entrepreneurs to tap into and learn, a huge number of great colleges and universities from which the next superstar teams can arise; and some great deep technology companies. NYC has really created an outstanding environment for entrepreneurship over the past few years – dozens of technology incubators such as ERA NYC, and relatively easy access to angel capital. Plus, a large concentration of Fortune 500 companies across many industries, including retail, media, pharma, financial services, and telecom – it never hurts to start a company near your customers. Because of the proximity to federal government offices, DC has developed a core strength in big data and analytics. The federal government is one of the biggest customers of big data systems in the world.
(Also on prSPEAK: Raju Rishi Seeing Through the VC’s Eyes Part I)
In your opinion, what’s causing the explosiveness in the number of startups?
The explosiveness has been driven by a few factors. First off, challenges in the job market and particularly the financial services sector, has driven top talent that would otherwise have gone there to now gravitate toward startups. Couple that with some highly visible and successful exits recently and you’re seeing great talent enter this space. Tumblr, Buddy Media, and Sense Networks had good exits in NYC for example. Other companies—including those you have here at PAN – Mendix and Perfecto Mobile -- are seeing bigger rounds and getting great press.
Secondly, the number of funding avenues for startups continue to grow – donation/reward based crowd financing, equity crowd funding, angel financing, venture financing, debt financing. More than ever before, a startup has investment options to help lift their idea to reality. One caution however, I think entrepreneurs should consider carefully which avenue is most appropriate for their business.
Finally, the costs/effort for getting a software startup off the ground has continued to drop, predominantly due to standardized platforms and services such as Amazon, GitHub, etc. These have afforded entrepreneurs to take concepts to market with minimal overhead and greater velocity – enabling each to focus on innovation and solving the needs of the market.
Over the course of his career, Raju has founded two companies, held executive leadership positions at both early stage and Fortune 50 companies, and served as a strategic advisor to numerous startups, two of which he helped to successfully exit. Raju held senior positions with Rave Mobile Safety, SwiftReach Networks and Vettro. He also held numerous executive roles at AT&T, and Lucent. Raju is passionate about technology, his wife & children, and helping entrepreneurs to create great businesses.
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