G iven a choice, he would love to go back to teaching and sharpening young minds. But for now, Vishnu Varshney, chief executive officer of Gujarat Venture Finance Ltd (GVFL), has to be content helping entrepreneurs with their fledgling ventures.
Varshney was born in a business family in Kanpur and went to BNSD Inter College where he studied up to Class XII. Influenced by his successful relatives, who were engineers, he decided to follow in their footsteps and secured admission to IIT Kanpur.
Varshney studied under the tutelage of renowned professors like V. Rajaraman and P.N.R. Rao. He graduated in 1969 and was so sure he would set up his own venture that he did not even apply for campus placements. On the advice of a well wisher, he went to Louisiana State University (LSU) to do his masters in science.
His first job was with a ship automation company. He considers his time in the US well spent. Says he, “In America, I learnt my lessons in ethics and put my value system in place. I also found the open and flexible educational system very stimulating.”
But it was not all rosy. The Vietnam War and the subsequent recession in America made things difficult for professionals like Varshney who had to discontinue working. To avoid returning to India, Varshney enrolled for an MBA at LSU.
A family tragedy forced him back to India in 1974. He then decided to pursue his original business plans. But he changed his mind after he met Jagdish Khattar of Maruti fame, then with the government as a civil servant. Varshney joined Khattar’s team at the Uttar Pradesh Industrial Development Corporation (UPIDC).
For the US-returned Varshney, this job was the stepping stone into the area of venture finance. Says he, “We worked around the industrial areas of Ghaziabad. We learnt some procedures like the letter of intent, licensing and other government requirements.”
It was around this time that Varshney identified software company Hindustan Computers Ltd (HCL) as a rising star. HCL was in its formative years. That was the right time to back it.
Such finds were very satisfying. Soon, however, disillusionment set in with the UP Development Corporation. Varshney would have gone back to the US, if not for an offer from the Gujarat Industrial Investment Corporation (GIIC) in Ahmedabad. He worked there for 11 years overseeing various projects. In July 1990, he was selected by the World Bank and GIIC to start Gujarat Venture Finance Ltd (now known as GVFL) as an independent, autonomous organisation in Ahmedabad.
He has raised four venture capital funds with a combined asset base of Rs 125 crore and is currently in the process of raising a biotech fund.
Varshney shares some tips for start up companies that wish to attract venture capital funds. “Location plays an important role in the setting up of companies as do products. Single customers and products are extremely vulnerable,” observes he. He feels that in joint ventures, the chemistry has to be good between the private and the government sector.
Although Varshney invested in technology-oriented companies, he did not burn his fingers during the 1999-2000 dotcom bust. GVFL’s success stories include Deccanet, Scicom, Net4Nuts, e-Infochips, Parsec Technologies and Neilsoft. Varshney has also worked in successful joint ventures involving companies like the Essar Group, the Hero Group, Gujarat Instruments and Gujarat Tyres.
Varshney now has more than 30 years’ work experience in venture capital. Today, when he invests in any company, he looks at some basic things: Who is behind the company' How passionate is he'
Varshney has a message for entrepreneurs: “Do not be afraid of failure. Success is 90 per cent sweat and 10 per cent luck.”
What with his busy professional life, he has missed out on spending time with his family. He does that now. And he listens to classical music.
Despite his children’s repeated requests to come to the US on a green card, he is adamant that he will stay in India. It is his hope that India will become a powerful country in the years to come. And he ventures to back the people who will help make it one.
Based on a conversation with Aparna Harish in Calcutta