Excl: Raj Chinai quits IUVP / Kalaari Capital to pursue entrepreneurship

Raj Chinai, principal of IndoUS Venture Partners / Kalaari Capital (a new entity formed by the founders of IndoUS Venture Partners), has left the $160 million venture capital fund to pursue entrepreneurship within India's startup fraternity. Although he has left Kalaari, Chinai will continue to be a part of the Harvard Business School Alumni Angels, India, an India-focused investment organization that he founded in 2011, along with two other Harvard alumni – Ravi Gururaj and Ramesh Shah.

Chinai had earlier worked with Yahoo and SVB India Capital Partners. He is an alumnus of Harvard and Kellogg, and also holds a BA degree from the University of Pennsylvania.

Chinai on career switch, investment plans

Techcircle.in had a quick chat with Chinai to understand better why he left Kalaari Capital and decided to start as an entrepreneur. Here are the excerpts from the interaction.

Why did you decide to leave Kalaari Capital?

Before I go into my rationale for leaving Kalaari, I would like to state that leaving the VC industry was not an easy decision. I have enjoyed many aspects of the VC world (which include working with some of the smartest entrepreneurs in the country, understanding new sectors, building strong relationships across peer venture firms and learning the art of getting deals done) and view it as one of the best professional experiences one can have. My decision to leave Kalaari was based on a combination of factors.

After nearly 30 years in the US, I decided to pack up and shift from Silicon Valley to Bangalore in early 2007. At that time, very few VCs were on the ground and launching a startup was no easy task. Today, our ecosystem has matured to a point where there are ample resources, including financial capital and talent, to build interesting companies. For me, having made certain sacrifices to shift to India, pursuing entrepreneurship was not a question of 'if' but 'when'. As with most things in life, the timing of important decisions is critical – and for me, from both a professional and personal perspective, the time was now.

Also, over the past seven years as a VC, I have focused most of my time on deal sourcing and evaluation, sector research and portfolio company management. While I have spent extensive periods of time working alongside our entrepreneurs and advising them on their business plans, funding needs, go-to-market strategies, partnership opportunities and senior executive hiring, the 'ownership' of each of these activities ultimately rested with the entrepreneur. Having enjoyed and learned from my experiences as an investor and advisor, I felt it was time to transition to the other side of the equation and focus on execution.

As an investor, I have evaluated a number of early stage opportunities across a broad range of industries, including health and wellness, social media, mobile and e-commerce, among others. This marks an opportune time for me to narrow down on specific areas of interest, as well as start-up teams that I think have the right DNA. To better acquaint myself with specific startups, I have worked with them as an advisor or mentor. Like in the case of 360Living.in, a health and wellness startup that I recently helped launch. The process of evaluating my new venture is an exciting journey, and I am looking forward to this next phase.

We often see entrepreneurs turning into investors. Why did you decide to do the opposite?

I do agree that the 'entrepreneur transitioning to investor' trend has been more common in India. But the opposite is quite prevalent in more developed entrepreneurial hubs like Silicon Valley and Boston, where we see many VCs opting for entrepreneurial opportunities at some point in their investing careers. Some eventually return to VC, armed with a greater understanding of a specific sector or what it takes to build a successful company. As the entrepreneurial ecosystem in India continues to mature, we will see more VCs keen to try their hands at entrepreneurship. Opportunities could include taking a sabbatical from a VC firm and working for a portfolio company or, as is my case, pursuing a new entrepreneurial venture. My main driving force was a desire to further refine my execution abilities and operating skills. And if I decide to return to the VC world at some point in the future, I think this experience will better enable me to relate to the entrepreneur's perspective from multiple angles.

Also, let's not forget that as the ecosystem becomes more mature, it is also becoming more intimate as networks are becoming tighter. In my new role, for example, I am now finding myself pitching to the same folks (potential partners, investors, etc.) who were pitching to me 4-5 years ago. It is now a lot more common for entrepreneurs to be on first name terms with many India-based VCs and angels, creating easier access to fundraising discussions. This is just one small example why I think the current maturity of the ecosystem makes this an optimal time to pursue entrepreneurship, regardless of one's background.

But you are still a part of the HBS Alumni Angels. So why did you decide to quit only Kalaari?

Unlike Kalaari, our angel group is not a fund, nor do any of us have a full-time role there. In order to pursue my startup venture on a full-time basis, it was necessary to leave Kalaari.

Will you continue to be an angel investor? How many investments are you looking to make in 2013?

Yes, I will continue to act as an angel investor although I have not set a fixed number to the investments that I plan to make this year. As for HBS Alumni Angels, we are looking to close 4-5 new investments over the next few months. If we continue doing deals at this pace, we may be on track to complete approximately 10 investments by the end of 2013.

(Edited by Sanghamitra Mandal)