Indian American VC Anshu Agarwal all set to take start-ups to the next level

Ritu Jha–

Indian American entrepreneur-turned-venture capital executive Anshu Agarwal explains venture capital like a fifth-grade teacher instructs her students. “When you run your own company, it’s like raising your child, but when you are venture capitalist, it’s like raising grandchildren,” says the recently-minted general partner at Converge VC, a venture capital firm headquartered at Cambridge, MA. “You are removed from operating them day in and day out, but if they need your help, you will be there for them.”

Agarwal is no stranger to running companies. Armed with degrees from some of the best universities in the world — IIT in India, Rutgers and finally Kellogg Graduate School of Management — she founded and exited several VC-backed firms, but now focuses on helping others on successfully launching their entrepreneurial journey. And it’s never easy for them, she says.

“There are times when some hard decisions like job cuts need to be taken. Some large companies die with a 1000 paper cuts. You keep on cutting the workforce, then you cut again. One thing I tell everyone is if you’re going to cut, cut it all at once so that you can only see growth after that. If you’re cutting every quarter the people who are in the company are not working either, because they’re thinking that they may be in the next cut. The productivity is zero when you do this. Large companies often do this. Whereas in a startup you are in control. I’ve worked in five startups and none of them operated the way a large company operates, where you’re just deciding on what the market is and then making a decision.”

Agarwal says that in a startup, “you can pivot quickly, and alter your decisions according to the conditions.”

“We forget to grow responsibly when times are good. When startups raise too much money, they quickly burn it too. I often tell founders, ‘If you have money, make sure you’re still spending as if you have limited money’.”

Agarwal has extensive C-suite experience at startups and Fortune 500 companies in marketing and product management. Her expertise in marketing communications, new product launches, business planning, and go-to-market strategy and execution has helped her build a reputation for successfully building and leading to four successful B2B startups.

She came to the US on a student visa in 1991. “I came on scholarship, we could not afford the fees then. These days people in India can afford to send their kids to the US. At that time, most of us couldn’t. My dad is a civil engineer and he worked in the Uttar Pradesh government’s irrigation department till retirement. There was no disposable income and my parents couldn’t afford to send their children abroad for studies. Almost all of my friends came to the US on scholarship,” Agarwal said.

She said she wanted to do focused work. “I took up Artificial Intelligence (AI) when it was not known like it is today. I came on a grant which was for detecting plastic explosives in baggage and I was using neural networks to do that in 1991, at Newark Airport, which was our prototype. Work was fun, it was cutting edge, but it wasn’t practical because there was not enough data available.”

As it turned out, Agarwal was ahead of the times. Her university thesis on neural networks for speech and imaging is more relevant now than ever before. “We were doing something for which the infrastructure wasn’t ready. But cloud computing changed everything. It was exciting, but since the infra wasn’t ready, I left AI work and did my MBA from Kellogg, and decided I wanted to understand business. After I finished my MBA, I came to Silicon Valley in 1999.”

Agarwal worked with MIT when she was employed at Motorola and then joined Motorola Research in Chicago. “And that’s how I ended up in Kellogg too. But, after six years of doing that, I realized I was still not making the progress I thought I should be making. I needed a broader understanding and I joined business school.” This was at the time when her green card was in process, she was attending night school and was about give birth to her first child.

Her first job was in Novell, Inc. in Provo, Utah, whose most significant product was the multiplatform network operating system known as Novell NetWare. She worked at Novell for just a year before heading to a small startup. “Since then, I’ve been doing startups.”

Her first was Speedera, founded by an IIT Roorkie alum. Within five years that startup was bought by Akamai Technologies, a cloud computing company. “The next three startups I joined were also acquired by large companies like Juniper Networks, HP, and Citrix Systems. Then I decided that I don’t want to be acquired, I want my own startup.”

She said, “There is just so much bureaucracy and there is so little work done in larger companies. The pace of work is slowed down by buy-ins and political agendas. I wasn’t made for it. Some people thrive in that, I don’t. In large companies, is it takes so long to get anything over the hurdle that it’s disappointing at best. It’s too many cooks in the kitchen for everything.”

She credits her business school for giving her a new perspective. “I credit my business school quite a lot because it helped me understand different aspects of running a company and how to be assertive, even when you in are a minority — the only woman in class,” she said. “I never knew marketing, sales, and what is a market fit. Till then, all I had done was research. As I was doing my business school, I wanted to work in a field that would be more practical and could be taken to the world. I started enjoying the business side of work. Since I was more into technology, I came to Silicon Valley. I had decided that I was going to work in technology companies. But on the business side.”

She fulfilled her dream and took it further to become one of the few women VCs in the technology sector of the US. “I never thought that I would become a VC but the opportunity landed in my lap and made me think that I could apply the skills that I have to different companies. That was exciting to me as it increased my coverage of different technologies and opportunities to meet smart people and learn so much. And I do have an opportunity to help the companies that we fund to grow because I have experiences that they may not have. I have experience navigating downturns and growing in different international markets. I have launched companies and products with little to no budget. If a founder is interested in learning, I can provide that. And being a VC gives me that opportunity.”

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