Out to Shed Light on Venture Capital’s Dark Side, Former VC Nijhawan Starts New Role at BU
Two-hundred-odd deals sourced. One deal done. Something wrong? Vinit Nijhawan thinks so, and the well-known local entrepreneur, angel investor, venture capitalist (make that former VC), chairman of TiE-Boston, and Xconomist, is on a mission to figure out what. After taking off his venture hat last August and evaluating many options for what to do next, he surfaced last week at Boston University, where he will teach and conduct his own research into what’s wrong (and what’s right) with the venture capital model.
On Wednesday night, Nijhawan launched his first class, a graduate course on entrepreneurship and venture capital called Starting New Ventures. I spoke to him yesterday about how it went, what he plans to do at BU and beyond, and his thoughts on the current state of venture capital. He also agreed to post his own article, A Walk on the Dark Side, in our Xconomist Forum. What’s the dark side? “The dark side is the venture side,” he told me.
Nijhawan, who in August left Key Venture Partners in Waltham, MA, where he had spent the previous two years, says he has been working on the BU move for a while. His official title there is Lecturer and Executive-in-Residence at BU’s School of Management, a post he holds within the school’s Institute for Technology Entrepreneurship and Commercialization. Nijhawan is going to teach the one graduate course, mostly for MBA students, and also begin his own research into the venture business. “I’m approaching it slightly differently than, say, the folks over at Harvard are doing,” he says. “My goal is really to identify what the best practices are of good general partners and then teach those best practices to students who want to be venture capitalists.” Of course, he’ll have some advice for would-be entrepreneurs as well, about “how to develop a business plan and present it—and also from the venture capital side of it, what they’re looking for.”
Nijhawan makes no bones about his belief that the venture capital business has some real issues to confront. At Key, he sourced some 220 deals, but only made one investment. He clearly thinks that speaks to some deep structural problems—not with Key, but with venture in general. As you’ll read in his Xconomist Forum post, these include the failure to take a long-term view toward many investments, and the shortage of the high-quality, sustained relationships between VCs and entrepreneurs that result in multiple partnerships and help to create a richer culture of entrepreneurship and innovation. “I want to use the academic platform to fix it,” Nijhawan says, referring to the venture model. He plans to start by conducting fundamental research to “take some of the premises I have and prove them right or wrong.”
His first class, meanwhile, sounded like a hoot. Nijhawan asked his students to come prepared to share a couple of their concepts for starting a business. “It was pretty interesting. We had all the way from technology-oriented concepts to people with this really good consumer-oriented stuff,” he relates. “One person had an interesting idea around combining microfinance, growing bamboo, and reducing carbon. Another person had an idea for a chain of dental clinics.” Yet another concept involved a website that provides detailed information and support for recently diagnosed cancer victims and their families.
His role at BU is only part-time, and with the rest of his time Nijhawan is revving up his more entrepreneurial and business-advisory pursuits. He’s helping SkyWay Systems, a Colorado-based telematics firm, raise new financing and develop their product plans. He’s also involved in spinning a data-center thermal management business out of Degree Controls (better known as DegreeC), of Milford, NH. Data centers, he explains, consume 1.6 percent of the nation’s electricity, and that figure is doubling every five years—in large part because handling the massive amount of heat they generate means cranking up air conditioning. This new business, formed around a patented cooling solution, will be focused on more efficient alternatives.
And, last but not least, Nijhawan says he’s now actively looking to become the CEO of an interesting company. No strong leads just yet. But, I’m guessing, he sees it as a walk on the bright side.