Saturday, 8th November, 1997

The Start Up Experience

Rajeev Madhavan
CEO, Magma Design Automation
Fred Greguras
Fenwick & West
Constantin Delivanis
Angel Investor

Our thanks to Ravi Mistry for compiling the minutes of this meeting.

The SIPA November meeting was held on Saturday, November 8, 1997 at the Sheraton Hotel in Milpitas. There were 100+ participants at the meeting. Topic of the meeting was "The Start-Up Experience" - a panel discussion. The panel consisted of: Rajeev Madhavan, CEO, Magma Design Automation, representing the entrepreneur; Fred Greguras of Fenwick & West,   representing legal aspects of starting up a new venture; and Constantin Delivanis, an angel investor. Following is a brief summary of what each had to present as well as a summary of the Q&A session.

Rajeev Madhavan, CEO, Magma Design Automation:

Mr Madhavan covered the entire spectrum of a start-up experience starting
from why do a start-up to whether he would do it again. An entrepreneur
has lots of ideas and passion to fulfill them; start-up provides the
freedom to do just that. In addition, there is the financial aspect of
starting and growing a new venture which, if and when successful, can
bring life-time financial security. One must also look at the fact that
all ventures are not successful. Are you ready to give away the
comforts of corporate life to enter into a situation which can at best
be described as risky? In terms of ideas, Mr Madhavan stressed the fact that
you may not be able to pursue all ideas at the same time. There needs
to be a clear focus and understanding of the market you are pursuing.
Mr Madhavan strongly recommended spending some time with potential customers as he did when he spent a month at the customer site without pay, just to understand their needs. It is a long process that many a time results in rejection of an idea, either by the customer or by the investor, and leads to lot of frustrations. But you must have an absolute faith in your talent and ideas to ride the roller coaster of emotions and frustrations.

Mr Madhavan suggested that start-ups need proper counsel and recommended to
select a top law firm. As expensive as it may sound, it pays off in the
long run because they can protect your ideas, and your interests as well
as those of the company. They can help negotiating with the sharks, and
provide useful contacts in terms of investors as well as a good
management team. They can also help with intellectual property rights.

Financing your firm is the most difficult aspect of starting your new
venture. Do you want to consult, save money and start? Mr Madhavan said
that is not a very good option as it defocuses you from pursuing your
ideas. Do you go to a venture capitalist (VC) or an angel investor?
VCs would generally take a larger chunk of the equity, while angel
investors do not. Also, there are a number of angel investors in
Silicon Valley. They are hard to find, but proper networking can lead
to the right investor for your venture. the caution here is - watch
out, there are good angels and there are sharks! It is important that
you qualify them just the way they qualify you. To attract the
investment, one must make sure that you have a good business plan and
good communication skills to present it. Whenever possible, use the law
firm or friends to negotiate the proper valuation of the company, and
hence, the amount of financing and share of equity.

On the organzaitional aspects, Mr Madhavan talked about building a winning
team through building company culture, but having realistic expectations
that you may not always get the best people to work. However, he would
make sure that non-performers were gotten rid of right away. Another
important aspect of team building is your board of directors (BoD).
First, keep the board lean and mean. Board members do add tremendous
value to the organization through their business/technical savvy, ideas
and contacts. However, the entrepreneur must learn to say no to anybody
who just happens to invest a few thousand dollars to buy a seat on the
BoD, or a friend who initially helped you to set up the business.

Mr Madhavan also had a message for those who would like to join a start-up.
One must make a choice to join a start-up after evaluating the risk
involved, whether the family supports the idea (long hours and financial
pains), and how it fits in your final plans. One must also investigate
the key players, the investors, their decision-making ability, their
markets, and whether they are top-heavy.

Mr Madhavan tried to shatter some myths about start-ups: 1) They are risky -
what is not?; 2) Spend 80+ hours a week - not necessarily; 3) Venture
will run out of money - smart planning avoids this situation; 4) Say
goodbye to family - it is give and take but one must learn to balance
both; 5) My resignation will cause issues - it does not; 6) Is this an
ideal time to join a start-up? - Any time is ideal time to join.

Mr Madhavan concluded by saying that he would love to do it over and over
again - seems that way, MDA is his third venture.

Fred Greguras, Fenwick & West

Mr Greguras addressed the issues of intellectual property (IP), capital
structure, and legal structure of a start-up company.

IP should be advanced as the key value that a company possesses and
would build on. However, there are problems with establishing the
ownership of IP. Prior employers can come after you. Consultants may
be another cause of concern as they may be working for your
competitors. When dealing with a technology that may have been
developed at an university, one must make sure whether or not the
licensing is exclusive. Same holds true for federal government
technology. The law firm can help you with ensuring protection under
both US and global laws. They can make formal search on trademarks and
domain names. When presenting the idea to investors, the entrepreneur
should let them know that as soon as funding is available, they are
ready to file patents. On the issue of non-disclosure agreement (NDA),
he cautioned not to get too hung up on. Make sure that you do not
reveal any confidential information in your business plan. Investors
may always be wary of signing the NDA. So one must carefully assess
risk versus opportunity. He said that there is no standard NDA.

He suggested a "peeling the onion" approach, where you can reveal more
of the details as you go along.

On the issue of capital structure, he suggested to design the capital
structure to look normal. He said that, at the outset, there is no need
for nonvoting stocks. He also talked about forward/reverse stock
splits. In the Valley, it happens quite often that the employer offers
forward stock options to attract employees; however, it can cause
problems when the employer has to do reverse stock split.

Mr Greguras mentioned that he likes Delaware corporation; however, he said
that if primary business is in California, one gets stuck with all
issues related to California corporation laws. On the Limited Liability
Corporation (LLC), he suggested that they are not very good for the
valley start-ups because of the involvement of VCs/angels. It has
liability benefits which are similar to a regular corporation; however,
it does not allow different classes of stock structure, no stock options
similar to corporation, and are expensive to start and maintain.

Constantin Delivanis, Angel Investor

Mr Delivanis is an active angel investor working with another partner. In
the beginning, he was a passive investor but did not like it. He
receives about 120 proposals but goes after only three of them in a
given year - investing is not as easy as it looks! He spends 2-3 months
to develop relationship and understand the product, then invest his own
money or bring in others to fund. Mr Delivanis also stressed that a good
board is very important, just make sure a family member is not on board
- that is a kiss of death!

He talked about two types of start-ups: The faster, cheaper, and better
concept ventures that need $8-15 million because of need for branding
and establishing proper distribution channels both of which are
expensive; The new frontier ventures that take longer time to blossom.

Mr Delivanis outlined the various financing alternatives - start with
passive angel investor who can then bring in other investors; corporate
money; and venture capitalist. The criteria to receive funding are: do
your homework and prepare a smart business plan which is simple and
clearly states the concepts/ideas; have conviction; know your
technology and markets; make sure you have a great management team; and
make a good presentation. "Nobody will read long business plans. So
distill you ideas since you get only short time to present your ideas"
he said. Further, he said, "Don't hesitate to ask investors how long it
will take for them to make a decision"

Question & Answer:

Q: Is services business a good business model that receives financing?
A: Yes; services/consulting/applications software has become big
commodity; Kleiner Perkins among the investors.

Q: How do you get info about start-ups?
A: Through networking, trade journals, conferences, VC-backed startups.
Read San Jose Mercury News which has info about ventures funded by VCs
every quarter.

Q: Who funds Internet ventures?
A: Kleiner Perkins, Sequoia, and Benchmark among others.

Q: Why did Mr Madhavan quit his first venture?
A: It was his first venture more as a technologist, lacked business
skills.

Q: Is there a standard pattern when it comes to stock options?
A: More and more equity is going to employees. At top level, it depends
on the potential of the individual - CEO @ 8 to 10%; VP/Mktg @ 1.5 to
2%; VP/Sales up to 2.5%. Caution - make it fair because once you go
public, everybody in the company knows who got how much. Can create
problems.

Q: Rate of Return for VCs/Entrepreneur?
A: VCs can get up to 40X. For entrepreneur, one can't put a value
because the stock was bought a very cheap price; therefore, relatively
very high return.

Q: How does the law firm help in raising capital?
A: Help develop a focused business plan; review the plan to ensure
credibility; ask tough questions; identify investors and get a fair
hearing from them.

Q: Working on new venture while still full-time employed. When to quit
without causing legal problems?
A: Talk to management and get their approval. Do not do it without
proper authorization.

Q: Would the law firm work on a contingency basis?
A: They will work on a combination of cash and equity. All
disbursements must be paid in cash. Patent lawyers are in great demand
and will only provide services on cash basis; corporate lawyers work on
the combination of cash and equity.

Q: How do VCs make decision on technology issues?
A: It is difficult to communicate without getting help from somebody
like a CEO or VP/marketing. Try to find an investor who understands
technology.

Q: When do you form corporation?
A: ASAP.

Q: How did Mr Madhavan, who started 3 companies from probably hundred ideas,
zero in at the right idea to start his ventures?
A: Did his due diligence, talked to customers, and made sure that the
numbers made sense.

Q: Is it a good idea to have professors and people other than investors
on board of directors?
A: Depends. There are two types of directors - those who spend time and
help, and those who are big names. Better to have advisory boards
rather than large BoD.

About the speakers:

Rajeev Madhavan, CEO, Magma Design Automation

Rajeev Madhavan is the co-founder and CEO of Magma Design Automation. Prior
to Magma, Rajeev was the founder of Ambit Design Systems, Inc. and the
co-founder of LogicVision. Rajeev founded Ambit in June 1994, built the R&D
team and raised a total of about $10M in Venture, Private and Corporate
Financing for Ambit. Rajeev served as the President and CEO of AMBIT from its
inception to Feb 1997. Prior to that Rajeev had worked at Cadence and BNR
(Canada) managing/developing analog HDL, logic synthesis and test automation
tools.

Fred Greguras, Fenwick & West

Fred M. Greguras heads the international practice group and specializes vs
chasing the management ranks in a large corporation. in representing high
technology clients in international and domestic transactions. Mr. Greguras recei
ved his B.A. and M.S. degrees in Mathematics and Computer Science as well as
his J.D. from the University of Nebraska.

Constantin Delivanis

Mr. Delivanis is the Managing Director and Founder of Sand Hill Group. His
company works with emerging growth startups in such areas as company and
product positioning, strategic alliances & partnerships, business plans and
funding. Mr. Delivanis has also been the CEO of EnaTec, which he founded, and
Measurex Automation Systems. He has an MBA from Santa Clara Univ, and M.S
from Stanford University.

Saturday, 27th September, 1997

Venture Capital for Technology Companies

Rakinder Grover
Assistant Vice President, Walden Group

Our thanks to Ritu Marwah for compiling the minutes of this meeting.

The SIPA event began with the introduction of the speaker by Rajesh Srivastava, Vice President of SIPA.

The Walden Group is based in San Francisco and is one of the oldest companies in this field. In his talk, Mr. Rakinder
Grover gave the group an overview of the following areas :-

* Venture Capital Industry
* Walden Group
* Venture capital and India

Venture Capital Industry

Venture Capitalists are professional money managers. The source of their funds are the Institutional investors, e.g. Pension funds, Foundations and Endowments, Banks & Insurance Companies, wealthy families and individuals.

The primary fiduciary responsibility of a VC firm is to its investors. They get a share in the profits. They fill the gap in "risk assessment"(where the banks don't want to come in. They also act as partners with entrepreneurs in growing the value of companies.

There are three key elements for a robust venture industry :-
* Fundraising (the capital raised for investing)
* Investments (amount invested by VC firms into
companies)
* Liquidity (IPOs, acquisition / merger).

All three elements are in place for a strong growth in the VC Industry. Fundraising levels are rising; average fund size is rising and hence there is more capital under management by VCs.

There is also a significant growth in overall investment and in early stage investing, valuations are rising, especially in startups; dollars per investment is rising.

Mr. Grover mentioned that 1996 saw a record venture-backed IPO market. Pre-IPO valuations are continuing to rise. The
average pre-IPO valuation for companies is also rising. Information technology investing continues to dominate the market, especially in the San Francisco bay area.

In the future it looks like returns will most likely fall as valuations keep going up and liquidity peak eventually passes. Only quality entrepreneurship will continue to receive financing in the foreseeable future. However, the VC industry is well financed to weather a downturn. Opportunity for investments are larger than ever. Returns can still be very strong.

Walden Group

The Walden Group was founded in 1974. In the mid 1980's it had a very strong international expansion. The first Asian fund of Walden Group was established in 1987. The Walden Group now has operations in 11 countries, including USA, Israel and countries in Asia. Total capital under management is over 700 million dollars.

The mission statement of the Walden Group reads :-
"To provide superior returns for our investors by making selective investments and creating value in our portfolio companies through Walden International Investment Group's hands-on approach and international network and resources."

The Walden Group's positioning and perceived image is that it is high technology driven, it believes in selective investing, it is valuation sensitive, it has close relationships with entrepreneurs and it has a strong international network. Walden Group focuses on the semiconductor, telecommunications, computer peripherals, electronics, industrial software, health-care / biotechnology and financial services industries.

The Walden Group's investment approach in international markets is to obtain strong government support, attract strong local industrial and financial partners, recruit strong local management, make selective investments, have hands-on monitoring, provide international networking, transform manufacturing mentality to brand name marketing.

The Walden Group's investment criteria are quality management team, high growth market, product differentiation and competitive advantages, entry barriers, potential for public listing.

Venture Capital and India

The main attraction of India is that it has a democratic tradition and rule of the law, entrepreneurial capability, mature capital markets, government encouragement of the venture capital Industry, long tradition of a private sector, transparent business practices, huge untapped markets, growing middles class population (200 million), and a large supply of talent pool. India's targeted growth rates requires additional investment. Despite relatively high savings India is short of capital. A number of foreign private equity funds have entered India.

Walden Group's competitive advantage in India is it's international network in East Asia, US/Silicon Valley, etc; it's partners (Nikko) network of Japanese corporations seeking to relocate manufacturing facilities to India; a diversified team of professionals with industry and venture capital experience; a hand-on approach and value-added contribution. Walden is well positioned to take advantage of rapidly growing high technology industries within India. Walden integrates industry and international business experience with finance and local knowledge.

After the talk ended, the attendees got to ask Mr Grover quite a few questions, some of which are here :-

Q. Can you give us names of any companies that Walden has
funded in this field?
A. Premises; ISSI; Microchip; Creative Labs; H3 etc.
In the 70's and 80's the main focus of WIIG was semi
conductor industry and in the mid 80's computer
peripherals in Asia.

Q. Any software companies funded by you?
A. Nothing that has gone public as yet. We do have a
consulting company in Phillipines that has gone public.

Q. What is your rate of return?
A. It varies from fund to fund. Currently we have 12 funds.
Net rate of return would be 23-24%.

Q. What is the industry average?
A. 15-20%. Last year was a blip as the rate of return was 50%.

Q. How do I go about going to a VC? Is cold calling a good
idea? What are the features of a good business plan?
A. Cold Calling is not recommended. Try to go through a
friend who may have been financed or something. But if
you do not have a network do not be disheartened. Go
ahead anyway. The business plan is one thing that VCs look
at but it is not the main thing. Experienced management
and business skills are important. The effectiveness and
track record of the CEO is seen and the quality of the
management is also examined.

Q. Can you help in finding good management and partners?
A. Yes through our network we can.

Q. What is the minimum amount of investment you look at?
A. 1 to 2 million.

Q. What kind of equity would you expect at that level of
investment?
A. There is no set formula. anything from 20 to 50%

Q. What do you look for? The potential of the product or the
value of the company?
A. A combination of both. The value of the company depends
on what is the potential product / service it can produce.
We are interested in getting involved at the early stage.

Q. What if I have an Angel funding me? Would that discourage
you from supporting me?
A. No it doesn't matter.

Q. What do you look for in a good management team?
A. In a high tech start up obviously the engineering team is
key. What is their track record? In their past companies
did they produce difficult high tech products? What is
the track record of the management and business teams?

Q. What should a prospective employee look for when joining
a start up? Is there any written evaluations / standards
available to guide him as to which start up will succeed?
A. There are no written guides on this subject. If a VC is
funding that company then chances are it is a good company
as they would have done research on it.

Q. But if VCs are there then I will get a low share of the
stocks?
A. It is up to you to decide whether you want a small piece
of the big pie or a big piece of a small pie?

Q. What portion of the company will you control if you bring
in 1-2 million?
A. That is just the seed capital. Obviously we will bring a
lot more. A whole network, support and guidance and money
for the later stages of the product. We don't look at
percentages but at value. This is a very subjective thing.

Q. If a large company has invested in the start up, will VCs
hesitate to invest in it?
A. It depends on the contract you have with the large company,
what the intentions are of the large company and whether
they want to kill the small company eventually or let it
flourish.

Q. What are the weaknesses and strengths of the Indian start
ups / groups? Is being largely an Indian group a
disadvantage? Should we try to be a more diverse group?
A. Being an Indian is a strength. You do not have to try to
be diverse. The strength of an Indian group is that they
have the ability to attract good engineering and technical
teams. But need to beef up their management and marketing
teams. Just a good engineering team is not good enough.

Q. How will you monitor the start ups you fund in India?
A. It is a difficult task. We have a team there and will hire
more people. We will look at the accounting issues, audit
and then trust the people.

Q. Are there career opportunities with VCs?
A. This a very small group. What you could do is network with
them and then if they need any evaluations done they could
involve you. You could come in as operational managers.

Q. Do you do competition surveys before investing to see if
someone else is working on the same product?
A. That is not possible. What we do is pass on any
information we get as and when we get it and safeguard the
confidentiality of the products of the clients.

Q. How should a start up select a VC?
A. Check if the VC understands the industry. See the track
record of the VC in that industry. Check if their other
clients and partners are of any use. Check if you can make
use of their network. What valuation they give you is
important but this should be kept in perspective with the
other issues.

Saturday, 23rd August, 1997

Management Consulting Seminar
Sunnyvale Hilton, Sunnyvale, CA

Satin Mirchandani
Vishal Saluja
McKinsey & Company

Mr Pran Kurup, president of SIPA welcomed everyone and invited the speakers -- Satin Mirchandani and Vishal Saluja, both from McKinsey & Company.

Saturday, 21st June, 1997

Hi-tech Engineering Consulting Seminar
Sunnyvale Hilton, Sunnyvale, CA
Sponsored by State Bank of India, CA

Deepak Gupta
Director of Consulting Services,
Oracle Corporation

Dipender Saluja
Director Spectrum Services
Cadence Design Systems

Raj Sirohi
CEO
HCL America

Raju Judge
Legal Issues
Wilson Sonsini Goodrich & Rosati

Rajesh Srivastava
President
Balcom Systems & Technologies

Over 300 people attended today's standing room only seminar at the Sunnyvale Hilton. The event began with a brief introduction by Sandeep Singh, SIPA' co-ordinator for the event. He mentioned that SIPA's decade of service to the professional community would not have been possible without the efforts of scores of SIPA's volunteers over the years. Mr Singh then introduced Mr. Ram Chopra of State Bank of India, the sponsors of the event and invited him to say a few words. He then introduced SIPA's President, Pran Kurup who was also the moderator for the seminar and the five speakers.

The moderator described the objective of the consulting seminar -- To get a broad perspective of the hi-tech engineering consulting business as a whole, ranging from the views of large companies which raise revenues from consulting such as Cadence and Oracle to smaller but fast growing company with an Indian resource pool such as HCL America, the legal aspects of establishing a consulting business, and finally the views of an start-up consulting company. He mentioned that Mr. Safi Quereshy, Founder of AST Research had mentioned in his keynote address at the recent TieCon 97 that he had started off as a consulting company.

The first speaker Mr. Dipinder Saluja of Cadence Design Systems, spoke about the rapid growth of Cadence Spectrum Services business: 115 million revenues in 1996, 500 employees in 95, double in 96 to 1000 employees. He stressed that the "time to market" pressures were driving the changes in the business model being adopted by EDA companies and their customers in working with them. "System on a chip","Intellectual Property", "VSI" are challenges for the semiconductor industry. Services is a key to realizing these challenges.

Mr. Deepak Gupta of Oracle said that Oracle was committed to enabling the information age through universal access in an open systems environment. He then described how services complement technology -- 8000 consultants in over 45 countries, three areas of consulting -- business consulting, new technologies and organizational change. The biggest challenge is "hiring to meet the demand" he said. To meet this challenge Oracle extensively uses the services of external consulting compnies.

Mr. Raj Sirohi of HCL America described software industry trends and HCL America's experiences. He mentioned "outsourcing, software modularization, code re-usability, shortage of qualified professionals and standardization of programming languages as key trends. He outlined the growth stages for emerging software industries --

1. Low value add body-shop operations,
2. overseas custom software development,
3. overseas packaged software development and
4. products with national competitive advantage

He mentioned how HCL has transitioned over the years, starting with hardware, then on to system software, later a to mix of system and applications software. He also touched upon the cultural issues involved in having a predominantly indian workforce at US client sites. He said that India is no longer the "low price leader" and that focus was shifting instead to quality, process management, and intellectual property development. HCL America's business comes from a mix of word of mouth references and cold calling. They are currently focusing on a small number of established customers to avoid being spread too thin.

Raju Judge of Wilson, Sonsini Goodrich and Rosati addressed the legal aspects of consulting. He addresses four main issues --

1. choosing the right entity (corporation vs sole proprietorship),
2. negotitating a consulting contract,
3. creating an IP portfolio, and
4. attracting and retaining employees.

In negotiating a consulting contract, he advised that consultants look for issues such as consequences in the event of non-delivery, the right to compete, ownership of the IP developed during consulting. He said that the "India Exodus" requires that immigration issues be appropriately addressed. Companies can try to prevent consultants from job-hopping, by granting stock options, competitive salaries and non-compete clauses.
Rajesh Srivastava of Balcom Systems and Technologies addressed issues that concern consulting start-ups -- issues such as health insurance, workers compensation, W-2 vs 1099, Incorporation, legal assistnce and payroll. "As far as possible, it is better to try and get professional help for such issues and focus on your strengths rather than try to handle them yourself".

The discussion was followed by a Q&A. Quotes from a handful of attendees -- * "I wish there was more time for questions". * "The legal issues and small company issues were most helpful" * "A very well organized event, hats off to the organizers".

The Seminar was followed by a brief vote of thanks for the speakers, the sponsors and the SIPA volunteers who put in a tremendous effort to make this event possible.

Saturday, 10th May, 1997

Career Growth in Corporations

A talk by Bipin Shah, President and CEO of inVoice Technology.

Open Forum

The meeting began with the open forum, where attendees are encouraged to make announcements which might be of general interest to the professional audience (job openings, fund raisers, upcoming events, business opportunities etc).

Two of the announcements were:

1. Child Relief and You (CRY). An organization aiming to restore to children their basic right to food, shelter, and education. For more information, you can visit their web site at http://www.cry.org.

2. TiEcon 97. The Annual Conference organized by The Indus Entrepreneurs (TiE) is scheduled for May 17 and 18. This year's theme is "Growing an Enterprise Successfully". As usual, the conference will have multi-track sessions about issues facing entrepreneurs, with special emphasis on growth related issues.

For more information call 408-567-0700 or email [email protected] or visit http://www.tie.org.

Career Growth in Corporations

Mr Bipin Shah began his talk by questioning whether he was even eligible to give this talk. He then went on to briefly describe his career - the conventional BS in India, MS in the US, struggled for first two years, moved to silicon valley, eleven years at Fairchild, the Altera for thirteen years and currently CEO of start-up inVoice Technology.

In order to describe what he thought it takes to rise the corporate ladder Mr Shah attempted to draw from his personal experience. He suggested that one should begin by making a list of ones strengths, weaknesses and skills. Then outline a plan to address one's deficiencies, and most importantly pursue them.

Focusing on what he believed to be most common deficiencies in Indian professionals - he pointed out communication skills, ability to conduct meetings, temperament, people skills, and cultural and social blending among others. He also stressed setting goals and directions as far as career is concerned - namely, technical, marketing, sales etc. For this, he also said that one must assess the corporation - size and growth rate, management style, values and culture and see if there is a match between oneself and the corporation. He highly recommended Toastmasters (http://www.toastmasters.org) as a means to improve one's communication skills.

He encouraged the audience to seek mentors at the same time adding that not everyone needs a mentor. As regards on the job activities he said - "Establish your credibility; Have regular one-on-ones with your supervisors; Ask for what you want; Do not make assumptions". He stressed the need for being well-read. "Personally, I don't read fiction. I read mostly magazines, business books and self-improvement books" he said.

On discrimination, he said, "Don't think about it and don't make it an issue. Show your strengths and abilities and you will not have to worry about this".

The talk was followed by a Q&A where Mr. Shah was bombarded with seemingly endless series of queries. Here are a few:

On MBA:
"If you want to be in hi-tech, personally, I think MBA is a waste of time. However, if you are contemplating a change of line, to say, finance, investment banking etc, it should certainly help.

On part-time MBA, he said, "Instead of doing a part-time MBA, one is better off spending the same hours at work, one should see better results"

A woman behind every successful man:
Mr Shah said," Its important to strike a balance. If both partners are ambitious and career oriented, there could be room for conflict. For us, it wasn't the case. Our kids got top priority"

On Office Politics:
Avoid it! If you are not political by nature, chances are, you can never be. Besides he said, "It won't take you very far. It is likely to hurt you in the long run!" So avoid it.

Saturday, 8th March, 1997

TIBCO: The Making of a Networking Software Company

A talk by Vivek Ranadive, President and CEO of TIBCO, Inc.

[ Thanks to Sukumar Ramanathan for writing the minutes. ]

Rajesh Srivastava (Vice President of SIPA) introduced the main speaker, Vivek Ranadive, the president and CEO of TIBCO. Mr. Ranadive is one of the most successful entrepreneurs in Silicon Valley, having created the division of Teknekron Software that eventually gestated into TIBCO.

Mr. Ranadive spoke for almost an hour, a candid, informative, and a very entertaining hour that took the audience from his early years in Bombay through his student years at MIT and Harvard, a disastrous first foray into the computer industry at Fortune Systems, an epic consulting assignment as a twenty-seven year old at Goldman Sachs, and the genesis of the idea that led to one of the most successful information product companies of our time.

TIBCO's products are core to the functioning of over four hundred major world banks and trillions of dollars of financial transactions occur over it every year.

In the early nineties, based on his idea of an framework for programs similar to a chassis for cars, his company produced a software framework called The Information Bus. This concept took the industry by storm and has now been incorporated into the products of companies as diverse as Oracle and Cisco.

By the mid-1990s, Mr. Ranadive's company had its software running on 40,000 traders stations and was in partnership discussions with Bloomberg. Reuters stepped in and negotiated to purchase his company last year. With stock appreciation rights, the valuation was $300M. Mr. Ranadive remains CEO of the subsidiary company, and has recently begun to evangelize a publish-and-subscribe model for the Web that shows great promise.

TIBCO's WWW home page is at http://www.tibco.com

Saturday, 8th February, 1997

Hi-Tech Investments: Strategies and Trends

A talk by Shubie Gulati, Associate VP, Dean Witter, Discover & Co.

[Thanks to Dhaval Shah for writing the minutes.]

The meeting started with Mr. Pran Kurup, the President of SIPA welcoming everyone and inviting Ms. Gulati, Vice President at Dean Witter, Discover & Co. He then called upon members of SIPA who wanted to make announcements about job opportunities.

After this was over, he called upon Mr. Rajesh Srivastava, Vice President, SIPA. Mr. Srivastava started by mentioning that SIPA is planning a new focus group on Web technology. The email regarding the focus group will be mailed soon. He then introduced Mr. Ram Chopra, Manager of the new State Bank of India Branch scheduled to open in San Jose(675 North First Street) on February 26th, 1997. Mr. Chopra complimented the efforts of SIPA in responding to survey by SBI one year ago and added that the Branch will provide all the regular services and also services for NRI deposits. Then, Mr. Srivastava introduced Ms. Shubie Gulati and turned over the stage to her.

Ms. Shubie Gulati has been with the San Francisco branch of Dean Witter, Discover & Co. since 1989. She is a specialist in Retirement Plans and Rule 144 governing restricted stock held by insiders of publically traded companies. Her background encompasses the domestic and international stock and bond markets. Prior to Dean Witter, Ms. Gulati had worked for Lehman Brothers.

Ms. Gulati is registered with NYSE, NASD, American Stock Echange, Chicago Board of Options and all major exchanges throughout the world. Ms. Gulati has a B.S. in International Business and is currently enrolled in the MBA Finance program at San Francisco State University.]

Ms. Gulati started on an optimistic note, stressing that the market is good for high-tech investors, and went on to discuss building and managing a stock portfolio. She identified three essential steps in building a portfolio: 1) Establish a plan by identifying goals and allocating assets, 2) Select stocks, and 3) Manage over time. She cautioned that doing this is not a one time thing and is an ongoing process.

Ms. Gulati then went ahead and discussed goal setting and asset allocation in further detail. The goals that are identified in the process of establishing a plan should be specific, quantified, and prioritized. Assets should be allocated among stocks, bonds, and cash. She offered a simple formula to determine sample asset allocation in regards to stocks and bonds (i.e. 100 - your age = % of assets invested in stocks).

She continued the discussion by describing in detail as to how one could approach investing in the stock market. The key focus of this portion of her talk was on stock selection. She highlighted three considerations: 1) Risk and diversification, 2) Fundamentals, and 3) Quality. She encouraged investors to diversify by industry sector, dollar weighting (allocating equal amounts of money to each stock, rather than allocating equal number of shares), and global investments. To judge the fundamentals of a company, she recommended investors to pay attention to the earnings growth of the company, products of the company, experience of management, strength of competition, strength of the industry sector, financials of the company, and its valuation.

Other points that Ms. Gulati made were how to monitor stock performance and know when to sell. She mentioned that performance of a comparable benchmark is a tool that can be utilized in monitoring stock performance. Blue-chip stocks should be benchmarked against the Dow Jones Insdustrial Average(DJIA), higher yielding stocks should be benchmarked against Dow Jones Utilities, and smaller stocks should be benchmarked against the Russel 2000.

In regards to when to sell, Ms. Gulati suggested that investors may want to sell if the stock has reached their target price, the company fundamentals have been compromised, or the industry or economic conditions have changed to an unfavorable position.

She wrapped up the talk by re-iterating the following points:

Set specific and quantified goals.
Let your asset allocation reflect time horizon and risk.
Use equity research to select stocks.
Monitor the asset allocation and stock performance.

The talk by Ms. Gulati was followed by a Q&A session. Finally, Mr. Srivastava gave a vote of thanks.

Dean Witter's home page on the WWW is at http://www.deanwitterdiscover.com.

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