By guest authors Irina Patterson and Candice Arnold
This is the fortieth interview in our series on financing for entrepreneurs. I am talking to Anurag (Anu) Nigam, president of Sand Hill Angels, which is an angel investing group in Silicon Valley with more than 60 members. Anu is also the founder and CEO of BuzzBox, a startup focusing on personalized news service.
Irina: Hi, Anu. Why don’t you briefly start with your background?
Anu: My dad was an immigrant who came to the U.S., and he always took risks. He came to the U.S. with $500 in his pocket, leaving his wife and two kids in India. The reason I bring this up is because risk taking has always been in our family. The willingness to strive for something more is built into my DNA.
In 1995, I graduated from Carnegie Mellon with a degree in computer and electrical engineering.
After graduating, I joined Intel. I worked at Intel for a little over a year in a graduate rotation program, and then I jumped into my first startup at age 23. I did it on a whim because somebody asked me to, and I thought it was the right thing to do at age 23. That was in the summer of 1996. The funny part is the 11-person company split into two, and I luckily picked the right half, which became a company called Cerent, and it was sold to Cisco for about $6.3 billion.
Irina: What did the company do?
Anu: It [made] networking equipment that shrunk something that was a seven-foot tall box that would sit in central offices into a box that fit on a 19-inch shelf. I was a simple chip designer engineer, but I was there early. What ended up was they hired a manager, didn’t like him, fired him, and the next thing I knew I was in charge.
I was 23, managing 10 to 15 people. I’d never done a chip in my life, never managed people, and never been in a startup. Luckily, the chip came back and worked the first time. People say a hundred factors that helped the company succeed. I was there for about a year and a half or two years, and then I left.
With a bunch of people from that company, I started a company called Siara. It was bought by Redback Networks for $4.3 billion.
Again, I was a chip designer and did everything that needed to get done. The funny part in both of those companies was the VCs owned about 80% of the company at exit, so they made a lot of money. But, you know, everyone made money, so everyone was happy.
I quit Siara during the boom, during mid-1999, but I was working part time for a year after or so, so in 2000 was when I was done, I think.
I made a bunch of money, then during the dot-com crash I proceeded to lose most of it – a lot of it. I guess that happens. You learn your lessons. I took a year or two off, traveled the world, was in a Mardi Gras float, and did a lot of fun things.
And then I came back and decided I wanted to get back into the tech world. That was around 2002. It’s funny, a couple of friends and I started an Indian dating site, but many Indian people get married through friends and family through arranged marriages. So, it had this social networking component where married people would join, single people would join, and you could see who was connected to and get an introduction in case you wanted to get married.
For us, it lowered the customer acquisition costs, and the company that was making money during the dot-com boom was Match.com because when the economy goes down, everyone goes to love.
The site was called Sona.com. It was doing OK, but it never really took off. At the same time, we saw companies like Friendster come out, when social networking came out, and we renamed it and rebranded it as a generic social networking company called Hi5.com. It did very well.
Hi5, at one time, was the third-largest social network. It was doing very well internationally, competing with Facebook and MySpace. I ended up leaving after a year and a half because I wanted to be CEO, and I was not.