Mel Goldman has a central role to play in the origin of India’s now flourishing venture  industry. In the late ‘80s, as the World Bank officer in charge of the Industrial Technology Development Project, he identified four local partner institutions (who thus became venture capital firms) for loans, earmarked for the specific purpose of these institutions providing venture capital in turn to innovative Indian ‘startups’. From this initiative, the seeds of India’s now vibrant venture industry were sown. The Program ran from the late ‘80s to the mid-90s, eventually financing nine funds across six venture firms, investing in over 300 companies with returns of 18-20% [per the World Bank completion report]. Shortly after the completion of the Program, Mel Goldman resigned from the World Bank, and took to a life of teaching (visiting faculty at Cornell University) and farming – operating a vineyard, and eventually launching a winery. Now in his late ‘70s, from upstate New York, he runs the award-winning Keuka Lake Vineyards. In this oral transcript based on my zoom call with Mel Goldman, he reminisces about his journey to joining World Bank, and launching the Industrial Technology Development Project. He talks about his interactions with government functionaries as well as the operators at the enterprises he partnered with. The Program, as well as the pioneers who shaped and executed it, like Mel Goldman, are forgotten today. Through this oral transcript of our conversation, we hope to bring him and the Program into the spotlight, briefly.

Interesting trivia. Mel Goldman’s father Jack Goldman is regarded as the man who founded the famous Xerox PARC labs, from where originated a lot of the technologies as well as interfaces now commonly accepted as part of computing such as the graphical user interface, ethernet / networking, laser printing etc.

Transcript of the interview

Please find below the (edited) transcript of my conversation with Mel Goldman. This was done via a zoom call on 18th June 2024

Hereonwards, any comment in a square bracket “[ ]” is a comment by Sajith Pai, to clarify a comment or context.

Origin story

Sajith Pai: So, Mel if I may call you so, we could start with your background and how it all came to be that the Industrial Technology Development Project, which led to the birth of India’s venture industry? Would love to hear about your background and how it came to be.

Mel Goldman: It’s interesting, my background. I went to a very good university [MIT], but way beyond me. I was very young. I graduated high school in the United States. I was very young. I wasn’t even 17 yet. I was 16. And then I entered university and went to, we’ll come back to which university because that was one of the superficial reasons that I was recruited for this position in the World Bank. But then after university, the only thing I wanted to do, and I knew it right away because John Kennedy was a hero of mine, was I wanted to go into the Peace Corps and I wanted to do something beyond myself.

And I had been reading newspapers since I was a high school student, particularly the New York Times and reading other magazines like the Economist. I was interested in many, many developing countries and so when I requested, you’re asked, when you apply for the Peace Corps, where do you want to serve? And I said, India, Pakistan, or Thailand, because I knew more about India a little bit from reading than Pakistan. And my father had been sent by the US government once. He was, my father was a scientist. He was a physicist, but he was more than anything, an administrator of research. And he had been, when I had gone off in the Peace Corps, already been to Pakistan for a conference, but I was particularly interested in India. I read up about Mr. Nehru and greatly respected him and of course, Gandhi, with whom I share a birthday. But the Peace Corps came back and offered me a position to teach Math and Science in Nepal. And so I knew a very tiny bit about Nepal, almost nothing. I said, Nepal, Everest, that’s it. That’s all I knew. So I read about Nepal and accepted the offer, and I went and I taught Math and Science at a high school  in a village 32 miles from the nearest airport walking up and down over the foothills of the Himalayas. After my initial year, I moved to the Laboratory School in my second year. And that was quite interesting. And then began a program with some Nepali colleagues, primarily a professor at the College of Education, and one of my coworkers. 

We started a program called PRIME or ‘Program for Improvement of Mathematics Education’, a program for high schools, and you might say, my first entrepreneurial venture. We got support from the government. Once again, I was the only non-Nepali on the committee. They had a committee to put it together. And then I became co-director with a fellow by the name Indra Nath  Arjyal. And the program was quite successful, up to a point. We ran the program in 50 schools in the country, which in Nepal wasn’t tiny and through the School Leaving Certificate or SLC including a special math exam. And we did it gradually year by year, sixth grade, seventh grade, eighth grade, ninth grade, tenth grade. We wrote teacher handbooks and workbooks for students, trained teachers, supervised schools and revised all the materials after testing. We tested the students upon entering and worked very closely with the schools participating in the program. It was a wonderful experience and was successful until the Government decided to homogenize the entire school system in the 1970s

Once I finished the Peace Corps, and also interestingly enough, I met my wife in Nepal. She [Dorothee Goldman] was also a Peace Corps volunteer in Nepal. We met there and she was a very creative person, and she designed science equipment using local materials. She wrote a book on it and trained teachers all through the country. And then USAID hired both of us. And then after a while in USAID, myself and two other colleagues got seriously, seriously disenchanted with bureaucracy. And we set up the first private consulting company in the country – Nepal. And that consulting company was named New Era.

The intention was, there were various intentions, but the intention was for it to ultimately be Nepali led. But where we started, we were three Americans. And then the first person we hired, ultimately, he was a teacher of Mathematics in our program. I identified him, he was just a few years younger than me, and he was a brilliant young man. He’s now Chairman. The company is 50 years old. It is thriving under Nepali leadership. In Nepal there are a few success stories, but that one, it’s a 52-year-old company now.

When we set it up we were idealistic. It was a not for profit, obviously you have to make a profit and be not for-profit, where the profits weren’t distributed. The idea was they’re reinvested and you build on it. And they’ve done a marvelous job. I mean, it’s been much better since it was Nepali run than at the early stages but it could never have gotten there without the initial 3 of us and an additional American that we hired who along with the first Nepali hire took the company forward. So I did that and then went back home. When we started it, after about two years, I was the president and the chairman of the board– but the 3 founders were equals. And the reason I was chosen as chairman was that I was the fluent speaker of Nepali and the more outgoing personality. The other two guys who were, it was very interesting. One of them was a bachelor’s and master’s degree in electrical engineering from a Podunk University called Stanford. And the other one did his bachelor’s degree, in biology I think? I can’t remember right now. But at Caltech. And I had studied at MIT. So, we had all these technical backgrounds, although particularly the Caltech guy and I, we were not very great students in technology. They were very demanding programs. And I went ultimately in a different direction. But the guy from Stanford, Doug Hall, was brilliant. He was the detailed day-to-day…he was the treasurer and secretary. So, he put together, he learned accounting by himself, put together the accounts. He just made sure that we followed all the rules. I was the guy going after contracts and giving speeches and all the crap, the BS guy.

But the three of us complimented each other and it really worked out. And we hired these couple of people who ultimately led the organisation. So, I left after about two years of getting going and then ran the operation briefly in the US, because we were set up initially as a US company. Eventually we made it a Nepali company when they changed some of the laws that made it conducive. And I went back to grad school in economic development. And I finally shined in studies at the university level.

And again, I went to Princeton to what was then called the Woodrow Wilson School. And then it was one of the feeding grounds for the World Bank. I was at the tail end of when they would recruit American males. So, I was fortunate that, so much in life is luck and coincidence, and my key interviewer was a Norwegian who happened to have been McNamara’s assistant and who was just setting up the rural development department. And I had done a three month stint in Bangladesh designing a rural development strategy for USAID and analysing everything that was going on there. This was in 1974 before you were born.

I loved Bangladesh actually. It was very beautiful, I had a good time. I travelled in different Thanas they called them and learned a few words of Bengali, but not much. But I had strong ideas of what didn’t work. And that included a lot of what the World Bank had been doing. And this guy who was just appointed head of rural development, Leif Christofferson was his name. He clearly liked what he saw, he was stunned because I was direct. I was saying, here’s what kinds of things that you have to think about and here’s what you’re doing wrong.

Anyway, so we started, and then there were multiple interviews and what not. So, I worked in the World Bank and they had me, oh, the World Bank is a funny outfit in many ways. It’s got a lot of talent, but it’s a very ambitious place where everybody thinks they’re God’s gift to mankind. And I spoke fluent Nepali, I had a lot of experience in Nepal, and yet I never worked on Nepal in my 20 years or so at the World Bank. I didn’t intend on staying so long, but I got a very interesting job working on and in Colombia. And that was quite educational and then I ultimately became the head of their, what’s called the resident representative. I became the head of the office in Columbia for three and a half years, but I spent four years there. And that was a very good experience. And when I was coming back from that, this was during the time when there was the Latin American debt crisis, but Colombia was the exception; they did not have to restructure their debt. They were very well run. They had some very talented people in government and in key positions and a lot of talent in the private sector too.

And the banks would come and visit me, and they would actually try to recruit me. And I said, I’m not a banker, but there was a finance section in the Latin America region of the World Bank. And they came out and gave me a nice offer and recruited me to serve to help them to work on Latin America. And I stupidly, being patted on the back, kind of accepted it. And then all of a sudden I got a call from Washington DC, Mel, we’d like you to come to DC. We’re starting this new effort in Industrial Technology Development, and we looked at your background, maybe you can be of some help to us. And I was enticed, and they described it a little bit. It wasn’t thoroughly developed, but there was a guy, what was his name? Anupam Khanna was one of them. And then there was a guy, Richard Stern was the division chief, and there were a couple of others.

And somehow, I had to go in and bow down and apologise to the wonderful people in the Latin American section of the Bank which had offered me a job in the Latin American section in DC, but I accepted the job on industrial technology development because it was fun. It was interesting. And I had a connection, my father [Jack Goldman], he didn’t work in developing countries so much, but he said to himself, ‘I never was going to be a fantastic researcher, but I knew good people when I see them. I knew who was a good researcher and I knew how to administer research’. So he became the head of physics and then the head of applied and basic research at Ford and developed their laboratory, and then ultimately at Xerox, where he was really the father, conceiver of PARC of Palo Alto Research Centre. So he was the actual conceiver of PARC, even though he didn’t work there. But if you Google his name, Jack Goldman, J E Goldman, he was the VP of Xerox. I have the memo in my file that he wrote to the board proposing the idea that was initially rejected, but it wasn’t initially going to be at Palo Alto.

And it was really at the urging of the guy he hired to head it up. A guy named [George] Pake, I think it is, who said he rejected the offer from my father a couple of times. He said, ‘well, if you move it to Palo Alto, I will consider’, and my father said, that makes sense, because in his mind, you either did it in the Boston area in those days or in the Bay Area. And so they set it up there. But anyway, he was involved in that kind of thing. And so even though I tried to get as far away as possible from what my father did, I was enticed by it because I heard stories about it. And so I decided to take this job at the World Bank, and my first job was to do a completion report for the Industrial Technology Development Project that the World Bank did in Spain before it graduated from the World Bank. And so I wrote a completion report on that, and then a couple of very good friends were asked to run a very interesting project to develop rural technology in China. And they asked me to come along to develop a financial component that was very interesting. Those two endeavors were my introduction to developing and financing industrial technology development in more advanced developing countries.

India and the Industrial Technology Development Project

Mel Goldman: And then finally they approached me and said, look, could you go out to India? This was 1987. I came back from Colombia in ‘85, and this was 1987. They said, could you go out to India and just investigate and they said,  here are some ideas that are worth exploring for a Technology Development Project. And they included, there were some… ICICI was developing the forerunner of venture capital. Then there were some rules…there were all sorts of rules and regulations in the pre, I mean, I don’t know how much of the history you’ve studied of reform in India, but before the 1991 reforms, I mean, you couldn’t even import technology easily. You had to go, I can’t remember the name of the outfit, but it was horrendous. You couldn’t import a simple technology as a company without the approval from this agency of the government, whose name I can’t remember right now.

Sajith: Was it the Reserve Bank of India?

Mel Goldman: No, no. It had nothing to do with the Reserve Bank of India. It was in the Ministry of Industry that there was a department responsible for approving all technology imports, and it thought it was guarding because it wanted as much as possible to be developed locally. Not that, I mean, yes, it’s important to develop things locally. You have to be strategic and you want to try to develop as much as possible, but why hold up companies from importing some of the latest technologies and try to improve upon that technology. So I went out on that trip and met with…it was quite an education, and I explored it. It was so interesting. I had just been working on China and I remember describing to people the contrast. I said, oh, it was like night and day. Getting the Chinese counterparts to talk up and express opinions in those days was difficult, but in India, you’d meet somebody in his office and you’d have 25 opinions for 10 questions. It was exciting. I had previously visited India a few times when living in Nepal, but only as a tourist. I met many people on that trip, I also met with a person named Bhojwani at, what was his first name? I can’t remember his first name [H. R. ‘Hiro’ Bhojwani], but he was in the Ministry of Science and Technology, and he was in charge of the CSIR from an intellectual, bureaucratic viewpoint. And so the idea was how can we get some of the institutions of the CSIR to be more productive for the economy? He was positive and cautious and had wonderful ideas.

So that was one of the areas that I was looking into. We had a very nice, actually a good friend who was the industry person in the Delhi office, a German fellow by the name of John Peter Wogart [?], who also helped me in arranging interviews and all kinds of things. And then I went out and began to explore other possible organisations that might be able to do something like venture capital. I can’t remember the sequence exactly, the timeline exactly, but the idea was, and I asked the question, I remember my discussion with [Narayanan] Vaghul, and I think it was at the end of this first trip, my second or third meeting with him, that I said, “Mr. Vaghul, we’d very much be interested in working with you if you would like to work with us.  You’re doing a lot of the work yourself, already, but we’d like to be of some assistance if we can. He said, by all means. And I said, would you also mind if we created the competition, that we work to develop some other venture capital firms? And he smiled and laughed and looked back at me and he said, Mel, he called me Mel, ‘Mel, we can, this is India. There’s room for many venture capital firms’. 

This was in 1987. He said ‘by all means, go ahead, that would be great’. And I had to go back to him two or three times. We were looking for how some of the other components could be administered. You read that report that you sent me? Did you read that President’s report? The President’s report is a summary for the board so that they get it, but there are three main components, one of which was the venture capital component. The second one was the technology institution component, and that one involved two sub components, one of which was reforming technological institutions. And that was what we did; we challenged technological institutions to say, you write up a five-year plan on how you are going to reform yourself without additional money from the government, how you can also benefit Indian industry, and not just yourselves doing good work, good research, but also benefit industry. And so that was the challenge. And one of the places that took up the challenge best was [R A] Mashelkar’s National Chemical Laboratory down in Pune. And he loved it, whereas his counterpart in a chemical engineering research institute, I believe in Hyderabad, and I can’t remember whose name I can’t remember, brilliant guy, a lovely man too, but he said, Nope, I don’t believe in that. We do what we want to do.  

The four funds

Mel Goldman: But anyway, so we started with four institutes. We ended up, I can’t remember, did you get the completion report?

Sajith: I’ll have to see what I have. You mentioned three reports, appraisal, then there’s a report to the board…

Mel Goldman: The President’s report is what you sent me. That’s less important. This one is called the implementation completion report. It was June 30th, 1998. Okay. And I’ll give you the report number). I think you can get it. It’s report number 1 8 1 0 5. And it was written largely by Sanjaya Lall, who was a professor at Oxford. And probably if I looked at this more carefully, I think there was something like we ended up with 33, I don’t remember how many, a huge number of institutes that ended up making use of the funds and actually doing something. It was highly successful. Then the other part of it was some conditional loans at nominal rates to companies when they undertook some sort of research project with an institution that could be an independent institute that was in the public or the private sector. And then the institution that was going to be the intermediary for both was ICICI. And they set up a technology group and did a wonderful job, led by Anand Kusre. I mean, that’s that second component. 98 projects were financed, while the original plan was to do 60.

And then the third component was a policy component that was a response to encourage the government to be more receptive to importing technology. And it subsidised some imports of technology that went through a fast track. I don’t remember all the details anymore. It ultimately became obsolete or not necessary, because in 1991, finally Manmohan Singh and company, reformed the whole system. And so that institution was basically done away with and technology imports became much easier. The other component was venture capital. You asked what the criteria was.  There was essentially no venture capital then in India. The only thing that looked like venture capital was ICICI’s experimentation. And this was before the establishment of TDICI. They did that, I think somewhere along the lines when we were preparing or finalising the World Bank project. ICICI’s approach was to mimic VC when share prices under IPOs were all subject to a Government body. [CCI or Controller of Capital Issues, a body that was eliminated by the 1991 reforms] 

And they had very strict rules for how they determined it. And so [Narayanan] Vaghul and company were extremely clever at how they wanted to do things and they would get around to do it without breaking any laws or rules or whatever. So, the conditional loan was such that the loan was paid back many times when it was successful and written off if it wasn’t just like what happens in venture capital, but without shares. But ultimately the whole system changed. And then these venture capital companies could buy and sell shares. As far as the criteria for working with the World bank Project, That excellent movie oversimplified some of the conversations. Do you know Sarath Naru?

Sajith: I have heard of the gentleman. He runs Ventureeast.

Mel Goldman: Yeah. He mentioned in the movie that when he came to visit me in DC, he said that I told him, we can’t invest in the private sector. It’s a little bit more nuanced than that. It’s not that we can’t, it’s that the government has…it’s that our  loan to India is guaranteed by the government. So we can’t…if we lend directly to the private sector, the government isn’t going to guarantee it. And VC is quintessentially a private sector endeavor. So what we do is that we develop a system whereby these institutions, which are largely public sector institutions, would set up independent management companies and an independent fund in which there would be various investors. And we could provide funds to that fund, that we could lend the money, because our money only came as loan. The World Bank was not a venture capital company, so we were largely restrained. So we were looking around for entrepreneurial forward-looking institutions that happen to be at least partly government financed.

We thought, and probably we were partially wrong, that Canara Bank was one of them. They had a couple of good people, but they didn’t follow our rules strictly. They did invest in a couple of good investments. And so I had, on my second, third and fourth trip, I had a fantastic group of World Bank staff and consultants helping me. So, we had two trips, with 9 or 10 people. And the guy helping on venture capital was a guy named Francois Ettori, who was a Frenchman, a very smart guy. He had never done venture capital before, but he was very intelligent, so he was helping out.

But then shortly after we approved the project, he left. But I stuck with it and we had a clause in our agreement that for each new fund, the first five proposed investments had to be approved by the WB. You may not recall the cute quip in Manmohan Singh’s famous budget address in 1991 or 1992 that I attended at the Lok Sabha. He was mentioning his understanding reached with WB and he used WB a few times and there was an outcry from the left in the Lok Sabha figuring it was the World Bank. Manmohan didn’t miss a beat and went on to say that the West Bengal Government. So basically I had to approve the first five investments in each fund. And so it was simple for TDICI, they had good people and were thorough in their due diligence.. The best way of thinking about this, they were able to sort out really bad choices before they even considered sending them to us because they had good people like Kiran Nadkarni, and there’s a slew of these guys, Vijay Angadi, but they also had Vaghul, and a couple of senior guys who really had a feel for venture capital, despite the fact that he [Vaghul] was a banker. Bankers usually don’t make good venture capitalists, but obviously there are exceptions, like Vaghul. So he could say, Hey, this investment doesn’t make sense. And he could argue back and forth. So before it was sent to us, they sorted out their investments. So they were easy to approve. Of course, some of them are going to go bad, but at least they looked like excellent investments to begin with. That is the nature of VC.

In the case of Gujarat Venture Finance, they were one of the most forward and had one of the best. The Gujarat Industrial Investment Corporation had a good track record, and they had good people. And we had two people that were the leaders of it, Vishnu Varshney was the head of it. And he had a very senior deputy whose name was [J M] Trivedi, and probably Trivedi who later worked for ultimately led the British outfit – can’t recall its name.

Sajith: Actis. 

Mel Goldman: That’s right. But Trivedi was outstanding. I mean, these guys were really good and they sent us really good investments in general, even though I remember one, I can name one in particular I loved, which was a clever water purification project. I’m forgetting some of the details, it was low priced meant for being able to sell it and to lower middle class. And even to the better off in some of the slums in the cities. It was water purification. The technology worked, I can’t remember why it ultimately didn’t succeed. But they did their homework, they did a good job. And there were some other investments, that one was, solar or wind power, one that they invested in that was quite good. The principles were that these needed to be early stage, but we also had to have some technology component widely defined. I mean, it didn’t have to be high tech or anything.

It had to be something that was an innovation. That’s all. It could be that part of the innovation could be in the marketing too. It could be something with some technological aspect. So, Gujarat was also quite good. And then we had APIDC third and Canara. Canara ultimately did okay, but nothing spectacular. But APIDC VC for a long while was a disaster. APIDC, I remember my first visit, meeting Venugopal Reddy, I believe that he was the IAS officer assigned to be the head of APIDC. And he was super interested and he brought out good people to manage it, and he wanted to do the whole venture. But then of course, as occurs in these government outfits, people were moved. And so while it was accepted within a year or two, I remember getting the first couple of proposed investments and going back with 15 questions, and not getting satisfactory answers. And then this would repeat a few times. And then making a supervision visit and finding that the quality of the management of APIDC had deteriorated substantially.

And it wasn’t a very healthy situation, but my attitude was, we are not going to approve anything, but we won’t cancel the money, even though the bureaucratic process and what my bosses were saying is, you should cancel. This isn’t going to work. And I said, well just wait. And eventually what I said is, yes, sir, yes sir. And just didn’t do anything as is a good bureaucratic technique. And so eventually there was change in management and change at the level of the ministry of finance of the state in which APIDC was. I believe that at this time the AP [Andhra Pradesh] Government was led by what was his name? Is it Chandrababu Naidu? Is that the guy who’s now entering the coalition? Yeah, that’s him. That’s him, yeah. He was a good guy and he wanted to see things done. And he had two good secretaries in the finance department, one of whom was Subbarao. He wasn’t directly connected with APIDC. He was on the revenue side, I believe, but then there was a second one whose name was Pradeep Bhide – he was fantastic. And he was a go-getter. He talked a little bit like you. He was fast talking, but right on the subject and wouldn’t take crap from anybody. And he was a secretary, one of the secretaries of finance and his wife was also an IAS officer, so was Subbarao’s wife (Sheela)…but anyway, he said, don’t cancel that money. We want this thing to function and we’re going to get it going. And sure enough, they ended up employing ICICI to be the ultimate evaluator. I mean, they made the choice to privatise it. Pradeep was the brains behind the privatisation. He knew how to engineer the government mechanisms to do things that would be fair and acceptable in order to remove the APIDC VC from APIDC.

There was a well-organized competition to find an investor and manager. And there were something like 40 applications. This was essentially a privatisation. And that’s when Ventureeast, out of all these guys, there was like Mahindra and other larger concerns, I can’t remember. There were some big outfits that wanted to get into venture capital that bid for it, but they ultimately selected this small group, largely NRIs, who were returning to take on, and they knew what the heck they were doing and made a superb presentation – I am guessing since I wasn’t present–  and they won it completely, legitimately. And then they ultimately took over. We were able to approve some of their first investments and they’ve done a very good job since. Before that, I should go back to the early stages. 

The supporters

Mel Goldman: I think you asked a question about some of the people. There were three that I can remember. They probably were in the Ministry of Finance. We got very, very lucky. It is like getting lucky to have Venugopal Reddy and then have the better management at APIDC. We had in the Ministry of Finance, junior level people responsible for overseeing our project and approving it, sending it on to the higher ops and all that. There were three guys, one guy’s name was Modi, I can’t remember his first name. No relation to your current prime minister. Kind of an open-minded guy.

And then the second one was a guy named (Syed) Gulrez Hoda, and he was fantastic too, very supportive. He would get on the phone and solve problems. He would cut through the bureaucracy to help institutions. If one of the venture capital companies would call, he would get on the phone. He was very good. He ultimately joined, I think the private sector of the World Bank, IFC. And then the third one was a guy named Subbarao, who ultimately became a very good friend and just a fantastic, brilliant guy, but also a fantastic human being. And he too was, the thing about it was usually you don’t think of bureaucrats getting excited about things like this. They got excited by the project, so they would cut corners, find ways of getting things through. So we had that extra fortune of having people like that in the government that were supportive of this effort.

In the World Bank too we had some, and that’s interesting as well. There were some people like that head of the India division, a couple of others. Michael Gould was one person’s name, and then a couple of others that were really supportive and making sure everything was done. But then there were lots of people saying, why’s the World Bank getting involved? And there were people that tried to kill it. They went to the members of the board of directors of the bank. At least that’s what we were told, and tried to get them to ask nasty questions. Then I had to present the project to the board, and fortunately we had one really good supporter, and his name was Moeen Qureshi. Do you know the name Moeen Qureshi? He was a Pakistani, but he was the head of the IFC. And the story goes that when he was younger, tried to do something not too dissimilar to this in India when he was working for the World Bank or the IFC, I don’t know. He tried to do something with venture capital in India and I believe that the IFC and the people in India couldn’t reach an agreement and so the project never went through. And he saw this project and he was stunned. He said, this is great. We got to do this. He was the number two in the World Bank at the time, and he happened to be the person who led the board meeting that day. It wasn’t, that was not [Robert] McNamara. I don’t remember who the president was, but the president wasn’t at that meeting. [Sajith: The then-President was Barber Conable]. 

So what I’m trying to say is that a lot of coincidence, a lot of help from different quarters made the difference and I am obviously missing many others. I remember we wrote the key document that he had to approve before we could go ahead and appraise the project. And he [Moeen Qureishi] wrote back, this is the best thing I’ve seen, coming out of the Indian department, blah, blah, etc. and sent it back. And all of a sudden people who were criticising were standing back and supporting. Probably forgetting a whole bunch of things. But I don’t know whether this is helpful to you or if I’m just relating internal political nonsense because you did ask those questions.

Learning the ropes

Sajith: This is interesting. It’s very interesting. It’s always good to know the background. A lot of it is just not known to a lot of people. I get the feeling that we may want, we may need one more slot from you, but not now. Perhaps 20 more minutes if that’s fine. Now, from the four funds, did you have to train the people? Do you recall who the people running it were? Did you have to get them to interact with each other? Did you send them to the Valley or Boston? Just a little bit about that.

Mel Goldman: That’s very good that you asked that. There was a wonderful program. We were very fortunate we designed it. In fact, there’s some good stories related to that. There was a program that was funded by the Japanese Government. This was a program with the World Bank. It was a Japanese grant fund that we used for different purposes at the World Bank to support different kinds of projects. So with one of the components of our Japanese grant, we did a few things, one of which was to send, I think it was up to 20 people from the VC industry to do an internship for, I think it was four months in a venture capital company in the United States or UK, largely. We had not formulated exactly what we  needed to do, but we wanted to organize some sort of apprenticeship in venture capital firms in the US/UK to familiarize the relatively new Indian Venture Capitalists with experienced VC people. Yeah, it had to be in an English speaking country for India. And so to find, I started out, I spent days, and I don’t know how many it was in the days. You’re talking about 1989, or it was 1988. I was calling, because you didn’t have internet, nothing like that. So I was calling one venture capitalist after another. I was told ‘we don’t wander more than two hours from our office. We only invest right in this location’. Same thing was true in Silicon Valley. Finally, one guy said, you ought to talk to this guy named Michael Ashall, who was a Brit. He’s putting together a fund of funds. This was VenCap International. He’s since done exceedingly well. He has made a lot of money. He was investing in funds mostly in the United States, but all over, he has invested ultimately also in India, and, I think he has some interest in India. And it turned out, as I learned later, his grandfather or somebody was buried, was in the British Foreign Service, or God knows what, he was buried in the Punjab or something. I don’t remember anymore exactly, but Michael Ashall was this real character. He worked, his office then was in Oxford, and it turned out he was just getting going, but he was extremely interested and he ultimately, we signed a contract with him and he administered and found the funds, but one of his stipulations was he had to approve every one of the interns that went.

Now we had to approve too. He wanted to approve because he said, look, I have a relationship with these outfits. I want to make sure that the guys that are going in, it was largely guys. I think there were a couple gals that ultimately went, but the guys that were going are going to be people that we can be proud of, because this is my name too, he said. Anyway, Kiran Nadkarni was one of them and there were, I know Vijay Angadi and a few others. In fact, in the case of Vijay, I can say specifically that he went to Colorado to some venture capital fund. And so the guys came to DC and we had lunch together in Washington, Vijay, the managing partner of the VC and myself. And the managing partner said, oh, it’s been a fantastic experience, I’ll tell you the truth. If it weren’t unethical, I would’ve hired this guy permanently.

By and large, I mean, there were a couple of exceptions, but there were probably a handful from TDICI, but there were some from each and some from subsequent venture capital enterprises as well, and they represented India exceedingly well, and they learned a hell of a lot. And so the idea was that they should have, the principle was they should have at least a year’s experience before they went so that they knew what they’re looking for, knew what they wanted to find out and learn from the experience in the United States, even though the experience is going to be different. It was mostly the United States. I think there were two in Britain, and that was it. 

Sajith: Do you recall some of the other names you mentioned about the women? Two women. Do you remember anything at all?

Mel Goldman: I don’t remember. I can remember [J M] Trivedi was one of them that went, I remember Vishnu Varshney, who unfortunately died a few years ago. He was a character, but a wonderful man and yeah, okay. There are many. I mean, you could probably, if you talk to Vijay Angadi, you talk to one of the TDICI people, they could probably name half. You could talk to Sarath Naru or J M Trivedi would know. I think there were one or two others from Gujarat that went in addition to Trivedi and Varshney. So anyway, that was a very good program, and in the end, it was a grant, but it opened up people’s eyes. It was the people that went, they were all talented to begin with, but this kind of experience really opens your eyes up, your experience up. So that’s what it was for, and there was no venture capital in India at the time.

Sajith: So maybe the last question for this session, hopefully we will do another one. So how involved were you with the investing process, I know you had to approve the first five investments. Was there a lot of going back and forth between India for you, or was this all done remotely? At what point did it  become less hands on?

Mel Goldman: Remotely was not the same in those days. There was no such thing as Zoom. No, I probably went back on average a total of two months, say three times a year maybe to India. We got this approved in ‘89, so probably ‘90 through ‘96. I probably went back, even when I took a sabbatical. I was a visiting fellow at SPRU, the Science Policy Research Unit at University of Sussex for a year. A wonderful experience, but I still went to India. Visited India a couple of times, supervised the project a couple of times. I mean, my main role was at Sussex and doing a little research in Europe. But yeah, I did that too. So I went back regularly and in fact, the completion report does suggest that makes a difference. You see, fortunately, my ambition was not to become a senior bureaucrat or a Vice President at the World Bank. That didn’t interest me. I was always interested in projects and doing things, not in playing politics. So, I wanted to see this project work, so I stuck with it, and they tried to, actually, there were a couple of people who said, why don’t you transfer? We got to get, I said, I’m still trying. I did try to put together a project in the Philippines, and I wasn’t as successful in a couple of other ones, and I did help with some other projects, but this didn’t take my entire time. This took I would guess three months. Out of maybe three, if you add it up, two to three months of the year on this project, two months maybe. Let’s just say it was probably two and a half months, which is a lot of time in supervision.

But it was such a complicated project, and it needed that support even in some of the other components, not the venture capital component only. For e.g. TDICI didn’t need my support so much, but the problem with APIDC, and Gujarat and Canara, they needed support. And then we approved a couple of additional ones. I wasn’t very enthusiastic about RCTC [now IFCI Venture Capital], but we needed to do it. Sometimes you have to approve things, you compromise, and then, yeah, so I like to think that my involvement was important, but you’d have to ask. I think that continuity was fairly critical. And then fortunately towards the end Sanjay Kathuria was in the office. He actually did a PhD in related topics and wrote a book on, auto parts industry in India or something like that. He was a talented guy and loved this project, and so he took on more and more responsibility and took it over towards the end, especially when I was taking very early retirement from the World Bank, I was ready to leave.

Sajith: Got it. So every year, thrice visits of a month, each was roughly…

Mel Goldman: Two to three times and usually it was three weeks or two to three weeks. You add it up three times. It might be two months max. I would visit some of the VC investments, but gradually did not spend in-depth time with any investments. Once the management companies were up and running well with more experienced staff, they got the work done without my needing to get deeply involved.

Wrapping up

Sajith: 2 months, yeah. I get it. This is great. I’m going to take a pause here. I know it’s been a long conversation for you, but I’ll come back with a few more questions because if it works out, maybe we could do one more call, but I will come back with specific questions because I don’t want to burden you too much, but I do feel perhaps there’s a book here, and if not a book, a monograph, and so that’s something you should consider. Now, we’ve exceeded our time and I am conscious of the fact that it’s late for you. I just have one question, which year were you born? 

Mel Goldman: I was born in 1945. Just after the Second World War.

Sajith: Just after the second World War. October 2nd.

Mel Goldman: You got it. October 2nd 1945. Gandhi was still alive then.

Sajith: Gandhi was alive then. Yeah. No, thank you for this. I just wanted to place the timing.

Mel Goldman: Yeah, I mean, I’m old. Yes.

Sajith: That’s great. Yeah, there’s a small monograph that needs to be written by you. I encourage you to….

Mel Goldman: Well, actually one of the things I want to do is do a little bit of writing, and I’m not as good a writer as you. I enjoyed reading a couple of your articles. Thank you. I read the Merit one, but I need to somehow get out of my current business. This is a major, what I do right now is I started by planting vines, and we started in 1998, and started making wine in 2005. But we make some of the best wine in this region and we are the only vineyard that’s won four prizes in France with our wine.

Sajith: Well, may I know the name?

Mel Goldman: Keuka Lake Vineyards. And we make outstanding wines. But now it’s time for me to retire from this. I mean, I put it together. I did years of work. I felt that it was important to actually get out and do physical labour. We all come from backgrounds where the merit people, they hire other people to do those things. I wanted to do it and then began, and now I have by and large, pretty good people here and it’s time for me to find somebody else, to be the buyer, do something so that I can devote myself to a few other things. But anyway, it has been 25 years at this and it’s much longer than I anticipated, but so was the World Bank. I went there thinking three to five years and ended up being 22 years or something.

Sajith: That’s great. And I’m going to send you the transcript of this. There will be lots of names which are not captured well, I’ll highlight those. I’m going to request you to just maybe correct the spellings and if you think there’s anything that needs to be left out, we can do that. And I will perhaps be back with a few more questions. But this has been hugely useful. I learned a lot. Thank you for this.

Mel Goldman: I’m really happy that somebody like you is working in this field and I’m very pleased with what you told me about Blume. Would love to see it someday.

Sajith: No, we’d love to figure out how to make that happen. Thank you so much.

Mel Goldman: You. I’ve enjoyed talking and learning from you. Yeah, thanks. Good night.

Sajith: Good night.

***

Thank you for reading this piece. Venture history is a topic that is close to my heart. While there are lots of resources on Silicon Valley history and the pioneers of our venture industry – books such as The Power Law, and the oral histories published by Berkeley Library and Computer History Museum – unfortunately there was nothing similar to that in India. Then came this video series (first two episodes out) called Venture Adventures chronicling India’s venture and private equity industry. I was inspired by that, and the lack of any oral histories, to begin this project. I hope you find this interesting!

If you know anyone who has been an Indian venture pioneer, or are one, I would love to talk to you. You can reach me at sp@sajithpai.com (no pitches here please!)