SDForum Quarterly Venture Breakfast with PWC
On Tuesday, June 5 2007 at Pillsbury Winthrop Shaw Pittman LLP, Palo Alto, SDForum held the second quarterly Venture Breakfast Series in partnership with PWC. A panel of corporate venture capitalists talked about how they invest, from seed funding to series C+, turning innovative technology into fast growing industries. Corporate VC investments can be a leading indicator on the viability of a sector.
Steve Bengston runs the Emerging Company Services (ECS) group at PricewaterhouseCoopers. ECS refers companies to investors and offers audit and tax services. Bengston presented PWCâ€™s Money Tree statistical report on seed funding over the past decade. Steve also presents the Money Tree data each quarter summarizing venture capital investment results and trends at www.pwc.com.
From his viewpoint, corporate in Latin means â€œdumb moneyâ€. Corporate VCs enter booming markets late and exit busting markets even later. He said the best way to get a corporate VCâ€™s attention is to have a term sheet from a competitor. Building contacts and relationships is key. In VC, you are only as good as your Rolodex.
Allison Leopold Tilley moderated the panel. She is a partner at Pillsbury Winthrop and represents technology companies in securities and venture capital transactions, including mergers and acquisitions, private placements, public offerings, venture funds and joint ventures. Leopold Tilley is co-head of the Firmâ€™s Information Technology Practice Team, Head of the Silicon Valley Business and Technology Group and co-head of the Southeast Asia Specialty Team.
Jai Das earned his BS from Brown University and MBA from University of Chicago, where he won the George Hay Brown Prize for academic excellence. He went on to work at Draper Fisher Jurvetsonâ€™s MVC Capital, Intel Capital, and Agilent Ventures investing in every part of the high technology sector. Das now leads SAP’s Ventures investment strategy in India, open source, SOA, SaaS, GroundWork Open Source, Ignite, MySQL, Selero, Sonoa, and Tealeaf. SAP will invest $50 million per year. He likes RFID companies like TC3i. He say most people want to bypass their IT departments and just subscribe to software online.
Lisa Lambert manages Intel Capitalâ€™s Computing Technology Sector, Enterprise Software Investment Groupâ€™s $253 million Intel 64 Investment Fund. Lambert handles enterprise software equity and M&A investments for some 69 portfolio companies in North America. She focuses on enterprise applications, middleware, platforms, tools, mobile software, web services, open source/Linux, vertical markets, business intelligence and 64-bit Intel Architecture investments. She personally completed five separate investments and follow-ons in 2002-03 in the following companies: Demantra, iSpheres, Feedroom, Black Pearl (Acquired by One Channel), and Intertainer.
Last year Intel invested over a billion dollars in over a hundred separate deals. They want companies that are commercially viable. Intel doesnâ€™t look for M&As, but does have very specific expectations from a company. Rather than acquire companies they want to create an ecosystem for Intel products. The next Google? It could be a breakthrough in the semantic webâ€™s idea of contextual search.
Deborah Magid earned her degrees in cognitive Psychology from the University of Pennsylvania and the University of Connecticut. She went on to work at Taligent, GE and AT&T and is now Director of Strategic Alliances in IBM’s Venture Capital Group, representing IBMâ€™s software business. Magid works with venture capitalists and entrepreneurs in emerging markets and technologies finding new business opportunities with portfolio companies. She pointed out that a company could be a customer, a partner and competitor at the same time.
Since 1999, IBM developed a partnership ecosystem to build strong relationships to innovate and invest in India, Europe and Israel. She says they operate in every country it is legal to do so. Governments around the world are seed funding new ventures to develop their economies.
Contrary to common perception, IBM can work with very small companies. The culture of a potential company is almost as important as their balance sheet. How they treat their customers and employees to build a business is important. M&As include Unicorn, iPhrase and in areas like information on demand, from storage, BI and content management to RFIDs. Internet services that address local markets and video in general are growing.
Ray Wu worked at Cisco Systems leading internal incubation, software investment and M&A, technology in North America and Asia Pacific regions. He currently leads HP’s New Business Ventures organization developing venture partnerships and transactions.
HP is very choosy about where to invest. It must be consistent with their overall strategy for IT. It has to be something that cannot be developed internally. Software and IT has been commoditized to the point that it must be standardized to work together. Worldwide, they may do 6 M&As a year like LogoWorks or something in PC games. Location based search is promising.
Also attending were Marc Burch, Zhaozhu Ge, Deborah Goslin, Charles Han, Linda Holroyd, We Haung, Nishi Kant, Roy Kim, Zoe Li, Junbou Liu, Prabhakar Manne, Anthony Nemelka, Siti Panigrahi, Lawrence Toney, Ted Tsao, and Fathy Yassa.
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