IndiaPost.com - Promoting microfinance and ethanol

India Post News Service

The greatest passion of Vinod Khosla, the famous Indian-American venture capitalist, is being a mentor to entrepreneurs, assisting them and helping them build technology based businesses. Vinod assists or serves on the boards of a number of companies including EASIC (programmable ASIC platform), Infinera (optical communications), Kovio (printed electronics), Skyblue (internet PC), Spatial Photonics (Micromirror displays), Xsigo (datacenter switch), among others.

In 1993, he first went to India to address global poverty and felt overwhelmed by the magnitude of the problem. "It's taken only a few people to dream the dream of having an impact on half a billion people, and to follow through and start making that happen. It's tremendously exciting," he says. Khosla is a charter member of TiE, a not-for-profit global network of entrepreneurs and professionals founded in 1992 that now has more than forty chapters in nine countries.

He is also a Founding Board member of the Indian School of Business. His current passion is Social Entrepreneurship with a special emphasis on microfinance as a poverty alleviation tool. He is a supporter of many microfinance organizations in India and Africa.

He has been experimenting with global housing. What should make microfinance attractive to investors, Khosla says, is that lending organizations such as his SHARE Micro Finance Limited operate on strictly commercial terms, make a profit, and are scalable.

"For a small amount of equity, such organizations are leveraging a lot of resources, not only in India, but in Pakistan and all over the world," he says. Addressing the question of whether interest rates of 20 to 30 percent are usurious, he says: "Would you rather have no loan, or an interest rate of 25 percent? The alternative is a local money lender who charges 5 to 10 percent per day. So let's be pragmatic, let's get beyond superficial, ethical dilemmas."

Vinod is also passionate about alternative energy, petroleum independence, and the environment. Khosla's ideas seem to have caught fire with policymakers in Washington. After he gave a talk about ethanol at the Clinton Global Initiative conference in New York, Khosla was mobbed by politicians including Al Gore and former Democratic Senate leader Tom Daschle.

"I think we have a replacement for oil today. Ethanol is cheaper, cleaner, it doesn't require a change of infrastructure, and it appeals to most of the lobbies." This is what, Vinod Khosla, an Indian-American venture capitalist believes. Ethanol has been around forever, but Khosla points out that new technology is transforming its utility.

"In the past, ethanol was made from corn, which isn't that great environmentally and isn't very efficient--for every one unit of energy you get 1.5 units of fuel," he says. "Now, with bioengineering, we can make ethanol from agricultural waste--which is four to eight times as efficient."

He believes that, with the right incentives, automakers could be induced to create "flex-fuel" vehicles that run on either ethanol or gas or some blend of the two. (There are already 4.5 million such cars on the road in the United States today.) Both the farm and environmental lobbies would favor the switch, and so would consumers, because ethanol is cheaper than gas. Within five years, Khosla argues, the transformation could be largely complete.

Challenges certainly exist with ethanol, but none are insurmountable, and the convenient truth is that corn ethanol is a crucial first step toward kicking our oil addiction. I believe we can replace most of our gasoline needs in 25 years with biomass from our farmlands and municipal waste, while creating a huge economic boom cycle and a cheaper, cleaner fuel for consumers. Born in Pune, India, he is an influential personality in Silicon Valley.

He was one of the co-founders of Sun Microsystems and became a general partner of the venture capital firm Kleiner, Perkins, Caufield & Byers in 1986. Even today, his goals remain the same - work and learn from fun and knowledgeable entrepreneurs, build impactful companies through the leverage of innovation, and spend time as a partnership making a difference.

He has a passion for nascent technologies that can have a beneficial effect and economic impact on society. He feels, ""An entrepreneur is someone who dares to dream the dreams and is foolish enough to try to make those dreams come true."

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