5 questions with Diaz Nesamoney

The conventional wisdom among many investors is that serial entrepreneurs are more backable than fledgling company founders. if so, then you’ll want to hear what Diaz Nesamoney has to say.

Nesamoney is founder of San Mateo, Calif.-based Jivox Corp., a provider of online video advertising services. Nesamoney already has two successful ventures under his belt. In 1993, he founded Informatica Corp., which raised $18 million in VC funding before it launched a $44 million IPO in 1999. In 2002, he founded Celequest Corp., which raised more than $20 million in venture funding and was acquired by Cognos in 2007 for an undisclosed price.

Two years ago, Nesamoney founded Jivox, which has raised about $13.5 million in two rounds of funding from Opus Capital and Helion Venture Partners. Nesamoney recently answered some questions for PE Week Managing Editor Alastair Goldfisher about what it takes to succeed.

Q: What are the changes you’ve seen as an entrepreneur since your first startup?A: It feels like we’ve come full circle.

When Informatica was founded, we were pre-bubble and capital was a bit harder to come by, much as it is today. After Informatica went public in middle of the Internet bubble, there was a lot of capital available. Companies could get funded with an idea and a short business plan.

Now, we’re back to where we were, with more intense scrutiny and a deep evaluation of basic principles.

Q: What is the key to achieving a successful exit?A: Identifying a real market need, not just a perceived one, and then working at it to validate the assumptions. Often what you think is the market isn’t really the market. Or it turns out there isn’t actually a great way to make money doing what you set out to do.

Q: What do you look for in a VC firm?A: The first is the VC’s experience in the area. It’s important that your VC partners can help validate and provide input on the business model.

I also look for VCs whose partners have strong operational experience, especially in this environment where execution is often more important than ideas.

And, I look at their track record of funding companies and sticking with them in good and bad times and providing value beyond money, such as being able to make the right intros to customers and strategic partners.

Q: With Jivox’s backers in the U.S. and India, is it difficult to work across continents?A: The reason we picked an investor in India is that we see substantial opportunity in India, and we’ve been selling there since day one. We wanted an investor with local knowledge and connections who could provide the local view and input into the business.

Board meetings and communications have been fairly straightforward, and I think most businesses are learning how to work across continents more effectively.

It does mean more travel, but this also means I get more face time with our investors as I travel to meet with customers, partners and the team in India.

Q: Are you planning to raise another round soon for Jivox?A: We have plenty of cash in the bank, and we’re not actively looking to raise money right now, but if the opportunity presents itself with the right investor we would look at it.

Otherwise, we expect to raise money within the next year. How soon depends on our growth and the market conditions for financing.