Thefunded.com website is not a place where the venture capitalist community looks for compliments. Some of the most successful investors in bottom line terms find themselves crucified there by entrepreneurs, managers or just anonymous talkback pundits who may have encountered them in one professional circumstance or another.
A large part of the complaints against the major funds on the site, which defines itself as the "home of entrepreneurs," relates to the long time that it takes for venture capital funds to make a decision about investments. Six months is a reasonable time for the funds but the companies want their money quicker than that.
Quallcom VP Nagraj Kashyap who has headed Quallcom Ventures (QCM), the chipset-makers venture capital fund for the past three years, has got nothing to be ashamed about. The compliments that he gets on the site position QCM as one of the leading venture capital funds in its relations with entrepreneurs, something yet to be achieved even by more successful venture capital funds. One entrepreneur writes on the site, "From our meeting with Quallcom through to receiving an agreement to invest took a month and a half."
In an exclusive interview with "Globes" Kashyap said, "We operate as a small and focused group and therefore we are able to work very fast. We also mainly work in early stage investments where it is possible to move faster."
QCM was founded ten years ago and has a portfolio of 40 companies focusing on cellular technologies.
QCM's first investment in Israel was in Dov Moran's modu Ltd., which develops lightweight mobile phones. Modu's phone is designed to work on CDMA networks, which is Quallcom's technology, and for which it receives royalties on every communications component sold. Modu approached emerging markets such as South America in which Quallcom is less strong.
Last week it became clear that modu probably won't meet all expectations after the company's planned IPO on the Tel Aviv Stock Exchange (TASE) failed. It is about to fire 100 out of its 130 employees and will continue activities on a reduced scale. Quallcom invested $7.5 million in modu in early 2009 out of a total of $124 million raised by the company.
QCM's investment in modu and its results do not deter Kashyap. He said, "It is still too soon to judge our activities in Israel. In other areas of the world we have been operating for a number of years and we have had strategic agreements and exits. We have only been in Israel for two years, and it will be a few more years before we can make any estimates regarding our success only after we have made a few more investments."
According to Kashyap these investments are on the agenda and will be carried out soon. QCM has also invested in Panoramic Power Ltd., which develops electricity grid management solutions, and won a QPrize in 2009 for QCM's best seed companies.
QCM's activities in Israel are carried out by a local investment manager Aviv Assulin.
Kashyap said, "We will strengthen our activities in 2011. We have a portfolio which suits what we are looking for, and we are working on other investments, about which we cannot yet give details."
Quallcom (Nasdaq: QCOM), one of the world's largest chipset makers, was founded in the 1980s and became a fabless company that designs and produces chips through third parties - the largest such company in the world. Quallcom has a market cap of $76 billion and had revenue of $3 billion in the third quarter of 2010.
QCM's role is to expose the company to new growth opportunities.
A decade ago QCM had a budget of $500 million but Kashyap says that the fund now has no specific budget and operates, "according to the opportunities that we find."
He added, "2010 has been our most active year from the point of view of the fund's investments and we will end the year with 13 or 14 additional new investments around the world.
The focus of the fund is not specific but is rather designed to contribute to the company's strategy of finding relevant new markets in the field of cellular and wireless communications
Kashyap said, "We concentrate on investing in companies in Quallcom's broad area of business, the global ecological system of mobile communications."
This definition includes chips, hardware, and electronic products (such as modu) and also software, infrastructures and applications.
QCM's portfolio contains a rare diversity for such a corporate fund. Among other companies the portfolio includes PayPal, which was acquired by eBay for $1.5 billion in 2002, and Handspring, which was acquired by Palm in 2003.
Kashyap said that the emphasis is on early stage companies. He explained, "Our most successful point evolves around the second round of fund raising. We can provide more value in the early stages, and so we prefer not to enter in the later stages when much larger investments are required."
Published by Globes, Israel business news - www.globes-online.com - on November 28, 2010
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