Transcript No Slide Title

Building Companies in
A Global Economy
Promod Haque, Managing Partner,
NVP
[email protected]
NVP - Actively Partnering with Entrepreneurs
to Build Significant Businesses
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44 year heritage
Managing >$1.8 billion in venture capital
Funded over 350 companies
Focused on early stage and select later stage IT
investments:
– Systems (Communications, Enterprise)
– Services (Communications, Infrastructure)
– Software (Infrastructure, Applications)
– Semiconductors & Components
– Consumer/Internet Technologies
NVP Investment Strategy
• Early-stage projects with world-class
technologies and entrepreneurs
• Later-stage companies with existing
customers, strong sales and top tier
management and
co-investors
• “Special situations” with definable, unusual
opportunities
Selected NVP Success Stories
NVP Value Proposition
Intl. Business
Development
Value Added Services:
PR, Research, Forums
Later Stage Follow-On
Financing Support
Large VC Firm with History
Through Down Cycles
Experienced VCs with
Operating Experience
Network of Portfolio Companies
Money
The VC Business Model Has Changed
• Exit Valuations Have Dropped and Are
Trending Towards Those of the Early ’90’s
• Requires Prudent Use of Capital
– $15-20 million to build enterprise software
company
– $30-35 million to build a hardware/systems
company
– $30-40 million to build a semiconductor company
• Focus on Capital Efficiency
• Capital efficient business models are still
possible
Hybrid Investments &
Micro-Multinational Companies
• U.S cannot afford to focus on a U.S.-centric market
alone
• Venture capitalists are leveraging their expertise in
other countries to help develop partnerships and
channels these companies need to prosper in the
global marketplace
• NVP is definitely seeing more cross-border or “hybrid”
investments from day one
• NVP rarely looks at investing in new private
companies unless they have some form of operations
overseas
• Early-stage private companies must take an overall
NVP Hybrid Investments
• 30% of NVP portfolio
companies have operations
overseas, and that figure is
rising
• Six of the most recent
companies in which NVP
has invested (in the past 18
months) are considered to
be "hybrid" or "crossborder" investments
• Many of these companies
are focusing heavily on
India as a strategic market
or have operations in India
Acquired
by
Acquired
by
What NVP Looks For in Companies
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Breakthrough projects with world-class
technologies
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Passion and vision of entrepreneurs
– Proven track record?
– Prior NVP interaction?
– High domain expertise
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Marketplace opportunity
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Unique value proposition to the customer
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Customer validation and traction
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Capital efficiency
Key Attributes of Disruptive Technology
Companies
1. Founding/management teams that shape
opportunities, execute deals and achieve
revenue.
2. Innovative core development teams that
have developed distinctive technologies
based on customer needs
3. Technology discontinuity/value proposition
aligned, solving a significant problem
distinctively
4. Secure blue chip customers
5. Understand how to develop and leverage
strategic alliances
Characteristics of a Successful
Founding Team
• Skill sets of the founders are balanced and
complimentary
• Ability to articulate their vision to investors,
employees and customers
• Understand their limitations and are willing to
be accountable to a board of directors
• Focused, tenacious, persistent and patient in
their execution
• Willing to enlarge the “inner circle” as the
company grows over time
What We Look For In Entrepreneurs
“Conventional wisdom paints the entrepreneur as a
driven, undisciplined romantic, operating in a frenzy of
energy. With a little luck, he achieves his goal just
before he goes under.
On the contrary, the typical successful entrepreneur is
a mature and careful person who fearfully recognizes
that there’s much more he doesn’t know about his
new business than he’d like. He’s thirsty for help from
any sensible and credible source. He’s in a hurry, but
only because time is precious. And he knows that
cash flow is king.”
James
McManus
What’s Hot
• IP Managed Services
– Revenues from IP VPN services in the US will rise from $2.9 billion
in 2004 to $8.1 billion in 2009
• End-to-End Custom ASIC Solutions
– Predictable, reliable and cost-effective alternatives to traditional chip
design and supply chain models enable more companies to use an
ASIC approach for their mainstream designs
• VoIP Infrastructure
– The global market for VoIP will reach $82 billion in 2005 and $196.5
billion by 2007
• IPTV
– Rapid advances in broadband access and compression
technologies will drive down delivery costs exponentially
• Service Oriented Architecture
– Industry analyst IDC forecasts SOA software market to hit $1.2
billion in 2005 and reach $10.9 billion by 2008
Source: In-Stat; Gartner; Insight Research
Questions?
Thank You!
www.nvp.com
Contact Information
• Promod Haque, Managing Partner
– +1 650 321-8000
– [email protected]
• Norwest Venture Partners
525 University Avenue, Suite 800
Palo Alto, California USA 94301
www.nvp.com