Don Valentine 1932 - 2019
During my early days at Cisco, I would often hear references to the turmoil shortly after the Company went public, when the Tech Founders, Sandy Lerner and Len Bosack were unceremoniously dumped from the senior management team.
The man allegedly responsible was legendary Silicon Valley venture capitalist - the late Don Valentine – not your “average” venture capitalist. Valentine was head honcho at Sequoia Capital.
Sequoia have funded multiple success stories in “the Valley” and beyond, including Cisco, Apple, Google, Oracle, YouTube, Instagram, Yahoo and WhatsApp.
Valentine admits that they have also funded their fair share of dogs. However, the wins have far outstripped the losses and they have been phenomenally successful. They have backed companies that now control over US$1.4 trillion of combined stock market value.
When asked to describe the reasons for this success, Valentine always insisted that he “did not back people”. He “backed markets”.
"Target Big Markets"
Don Valentine's strategy was to listen to people (usually young tech entrepreneurs) who had great ideas. Valentine would then assess if the idea had merit – not based on the idea itself – but on the size of the market that the idea could potentially unlock.
If there was a match, then the idea would get funded, and he would surround the founder with everything required to take the idea to market.
However, as Sandy and Len from Cisco discovered, the money did not come with undying loyalty. However, it was not all bad for them. They walked away with US$170 Million dollars in Cisco shares which they promptly dumped.
Those shares would ultimately have been worth $US90 Billion dollars – if they had held on. C’est La Vie.
I would be very interested in your view of the Don Valentine strategy to back "markets" rather than "people".
What do you think?