Business India, January 22-February 4, 2001
A VC with a soul
“Rajvir Singh is an usual Valley VC. He still has some soul left,” an entrepreneur told us. “You must meet him before you go. I will give you his cell number and you can talk to him,” said part-time entrepreneur and full-time academic Prof Paul Raj. “Raj, as he is popularly known in the Valley, is one of the biggest. He did Cerent and sold it to Cisco for $7 billion, and Sierra and sold it to Redback for $4.3 billion,” said yet another entrepreneur. We were leaving the Valley the same day and we dialed the number given to us. “Oh, you must be looking for Raj Singh, I am Raj Parekh," said the voice on the other side. Our curiosity had been sufficiently aroused and when we found that both the Raj’s work for the same firm, Redwood Venture Partners, we decided to pray for good traffic conditions so that we didn't miss the flight, and meet them anyway before we left for San Francisco.
Needless to say, we were handsomely rewarded. Though we did not have much time together, we struck a cord instantaneously. "I am from Idrishpur village, near Meerut, and was born in an ordinary farming family," began Raj Singh. We continued in this vein for a short time and then continued the rest electronically. Raj Singh is a true wanderer. Not only in the physical sense of trekking, which he does regularly with his family ("we went to the Andes this summer," he informed us). Like a seeker of something ethereal, he keeps wandering from job to job, startup to startup, idea to idea. On the way, he also creates knowledge and wealth.
After his BE in Roorkee Engineering College in EE, Raj joined the Navy. After a couple of years working on the aircraft carrier Vikrant, Raj found the regime too rigid and so, he resigned. He then joined IIT Delhi and worked in TIFR'S mathematics department, studying computer science. To this day, he says he found the atmosphere at TIFR the most stimulating. In 1974, he joined a startup in Delhi, Alpha Electro, to make minicomputers. He was then given an assignment in Libya. Working for the Libyan Electricity Corporation, he developed a computer programme for grid planning and load dispatch. After a couple of years there, he joined the University of Minnesota at Minneapolis for an MS in computer science. From 1981 to 1995 Raj changed jobs - from CDC to National Semiconductors, to Trilogy Systems, to Cirrus Logic to Nexgen to Inter HDL.
Then he ventured onto his first startup Advancel Logic, which later split into Fiberlane and Stratum One. Fiberlane again split into Cerent and Siara and Cyras.
In 1999, Raj teamed up with old friend Raj Parekh to float a venture fund, Redwood Ventures.
Today, Raj is part of Comstellar Technologies, a combination of an incubator and a vc firm and a specialised technology holding company in a particular sector. Anil Gupta of Stanford University has called Comstellar Technologies a Metacompany and has predicted a brighter future for this model. Raj has invested in 40-50 startups. A large number of them are in the optical component space - which is why Raj is described as a fountain of optical startups. The way he has started his companies and then split them as and when required, show an extremely flexible and functional strategy, a key characteristic of the startup culture.
When Raj was facing a burnout, he found time to write a book, Digital Design and Synthesis with Verilog HDL, which has gone on to sell over 10,000 copies.
"I have learnt a lot from various industry stalwarts, I was lucky to directly work for people like Suhas Patil, Thampy Thomas, Atiq Raza, and Vinod Khosla. I also happened to work with Kamran Elahian in helping him start Momenta, and with Prakash Bhalerao, who was director on the board of Advancel. I worked with Prabhu Goel while I was writing my book on Verilog HDL. What I did was apply all that at Cerent, Startumone and Redwood Ventures. Now I am learning from my general partners Raj Parekh and Deven Verma," he says.
Raj Singh's reputation as an optical startup machine has spread far and wide. Recently, the Chinese government invited him for a visit. "They have invited me to become an advisor to their minister of information technology and also visit them again and give seminars to young graduates on how to start a company, how to develop a business plan. In return for their hospitality, I gave them free rights to translate Digital Design and Synthesis with Verilog HDL into Chinese," recalls Raj.
Raj Singh's soulfulness is evident from an anecdote regarding Tachion Networks, now being eyed for an acquisition by Alcatel for a billion dollars. One day the president of Tachion Networks called Raj and said he had run out of money and could not meet his payroll any more. Raj decided to wire him $100,000. "He called me on Thursday, and Friday was his payroll date. I called Raj Parekh to do the same and he also wired him another $100,000. None of us had met this guy before, and it was a blind date. Investing is not just making money, it is also making the entrepreneur's dream come true," says Raj. Amen.
As for equity in his startups, Raj says: "The more you give it away, more you get out of those who get it. I found it very satisfying when John Chambers of Cisco, who bought Cerent, made a statement to his staff that he was very happy to see that stocks distribution in Cerent was very even. That enables the company to hire more talent who help build a large company."
"I would like to use my new-found wealth to benefit the society that I got it from. I have a dream of creating a venture fund out of my personal capital, the returns of which would not come to me, but would rather go to benefit charity organisations, Indian social entities, and to improve education in India. My village in India still does not have a high school. And the Hindu temple in Sunnyvale still does not have a clean carpet and a clean restroom. This fund will have part of the returns invested back into the fund, will be known as a green fund, and should hopefully continue to generate sufficient money to at least become a continuous source of money supply to some extent," he adds.
This simple man from Meerut seems to be a total misfit in the Valley, but paradoxically, that is where he is thriving.