Kanwal Rekhi on Excelan, Silicon Valley Quad, and How One IIT Engineer Rewrote the Rules for Indian Founders in America
The first Indian-American founder to take a venture-backed company public on NASDAQ on contrarian bets, value pricing, and why India needs 10 million entrepreneurs by 2047.
On a freezing Michigan night in 1967, a 22-year-old IIT Bombay engineer stepped off a plane with exactly eight dollars in his pocket, the legal maximum the foreign-exchange-starved Indian government would let him carry. India was still recovering from the 1966 famine, surviving on American wheat sold in rupees under Public Law 480. Its global brand, in his own words, was “land of snake charmers and land of beggars.” Six decades later, Fortune magazine would call Kanwal Rekhi the Godfather of Silicon Valley’s Indian Mafia.
Check out the video of the conversation here, or read on for insights.
The Excelan pricing playbook
Kanwal’s first decade in America was three job losses in 24 months and a move west to what was not yet called Silicon Valley. He rose to senior staff engineer, but when he asked for a management track, the answer was blunt.
I asked my bosses about management. They said, ‘No, you guys are not managers. Who would work for you Indians?’
A subordinate he had trained, David Jackson, left to start Altos Computers. In 1982, Kanwal decided to do the same.
That year, IBM was shipping PCs at roughly $2,000, down from the $50,000 mini-computers and half-million-dollar mainframes that preceded them. Kanwal saw the obvious thing the market had not processed: desktops were useless alone. They had to talk to the mini-computers and mainframes where corporate data actually lived.
He co-founded Excelan with two partners, each putting in $10,000. VCs said no a hundred times before John Bosch wrote a $2 million cheque for 50 percent of the company. Bosch later made more than 100x his money.
The product bet was contrarian. Intel, Xerox and Digital had announced Ethernet as the future standard, with chips promised in three to five years. Kanwal built a board-level Ethernet implementation immediately, using off-the-shelf components. Then he bundled the Department of Defense’s TCP/IP protocol onto it, a move the industry considered a category error.
The conventional wisdom was that TCP/IP was ill-suited for Ethernet. It was built for a slow, error-prone military network. My logic was: if there are no errors, there are no retransmissions. TCP/IP has no inherent limit on speed. I was the only person who bet on it.
The product worked. The company did not, at first. The CEO went hands-off, the board fired him, and Kanwal stepped in with a pricing turnaround. He replaced à la carte pricing (a $2,000 board, $60 software, transceivers bought elsewhere) with a single bundled solution at $14,995, exactly half of Digital’s $30,000 equivalent. Hardware cost of goods was roughly $300 per unit. Gross margins moved to 80 to 90 percent.
In 1987, Excelan became the first Indian-American-founded, venture-backed company to IPO on NASDAQ. Revenue was $22 million, profit was $3 million, valuation was around $125 million, and the stock popped 50 percent on opening. One detail worth preserving: weeks before the IPO, the board temporarily replaced Kanwal with a white CEO because “there was a fear an Indian CEO may not play well on Wall Street.” The replacement was fired six months later.
In 1989, Excelan merged with Novell in an all-stock deal worth roughly $210 million. Novell’s stock 10xed within a year, eventually reaching a $12 billion market cap, making it the world’s second-largest software company after Microsoft. Kanwal effectively ran Novell by his late 40s, bought Unix from AT&T, and was passed over for CEO when Ray Noorda retired in 1995. On his way out, he made Unix open source, a decision that seeded Linux and the modern cloud.
TiE, and the arithmetic of angel investing
In December 1992, eight Indian-American executives were waiting at the Santa Clara Marriott for a bureaucrat who had missed his flight. While they waited, they started talking.
We realised we all had similar journeys. Nobody believed in us. Someone suggested we form a dinner club, not to invest, but to encourage our youngsters to become entrepreneurs instead of job seekers.
That dinner club became TiE, The Indus Entrepreneurs. The first workshop in March 1993 expected 100 attendees. 500 showed up. Today TiE operates 61 chapters across 14 countries with roughly 15,000 members, including 3,000-plus charter-member mentors. TiE also lobbied Delhi in 1999-2000 to create the Foreign Venture Capital Investor asset class, the legal plumbing for modern Indian VC.
Kanwal became an investor because the first generation of Indian founders needed capital the Valley would not write. An early angel cheque into Exodus Communications peaked at 1,000x during the dotcom bubble. He sold on the way down and settled for 86x.
I felt like an idiot, because at one point it had been a thousand times. Later I realised 86x isn’t bad. But it’s not a thousand.
In 2007 he co-founded Inventus Capital Partners, which has raised about $208 million across three funds, seeded nearly 90 teams, and produced seven unicorns including Headspin and Cohesity, alongside exits like Poshmark (NASDAQ IPO, 2021), redBus (acquired by Naspers for $138 million), Nutanix, PolicyBazaar, and Sierra Atlantic. His current vehicle, Silicon Valley Quad, is a four-partner syndicate writing $2 to $3 million seed cheques for 25 to 30 percent of the cap table, with a deliberately harsh assumption: 75 percent will fail, so the winners must return 40 to 50x.
His founder-picking framework is built on elimination, not prediction.
I bet on the person, not on the TAM. Technology changes every day, competition emerges every day. The only constant is the person. I can never tell you who will win. But I can tell you, with 90 percent confidence, who is not going to.
The screen: intellectual honesty (owns failures), humility (arrogance is an auto-no), fairness in equity allocation, willingness to hire people smarter than yourself, and revenue-per-employee literacy for software founders.
10 million founders by 2047
Kanwal turned 80 in August 2025. His memoir The Groundbreaker was published by Diversion Books in February 2026, with a foreword by Congressman Ro Khanna. He has donated $5 million to Michigan Tech and $3 million to IIT Bombay, which named the Kanwal Rekhi School of Information Technology after him.
His stated goal is to live to 102, to see India’s 100th anniversary of independence. His current institutional bet is KREST, a Rural Entrepreneurship Center in Nizamabad. India, he argues, will not be built by 200 unicorns in a handful of metros. It will be built by 10 million entrepreneurs, many in tier 3 and tier 4 cities. One of his examples is an IIT graduate who returned to his village, redesigned primitive farming tools, doubled productivity, and now sells to 70,000 farmers with revenue around 5 crore and a line of sight to 50 crore.
Per-capita GDP in the US is roughly 30 times India’s. Kanwal’s thesis is that the gap only closes if the founders come from everywhere.
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