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I interviewed Robert D Pavey, Partner Morgenthaler Ventures@NVCA Venturescape. He spoke about his domain experience wireless & smartphones. They want to find waves before everybody else finds them & then find ways to help entrepreneurs build young businesses in those companies. 2 billion cell phones will be delivered in 2013. 300 million of them will be 4G phones and in much of the world this is the only computer that most people have & that means people are moving towards smartphones. These phones are needing to handle multiple frequencies, to cover multiple cellular bands and GPS and Bluetooth and this is basically changing the way that we live. Morgenthaler is focused on Information Technology in general. The firm has been going for about 45 years and has evolved into multiple firms. ”Entrepreneurs are not always the easiest people to work with but we respect them still. To survive some of them are pushy, some of them are aggressive, some of them are overly optimistic but they are very interesting and exciting “animals”. If you understand them & accept them for what they are, then you can help them!” He spoke about how he perceives the changes in the venture industry. ”In amongst all the changes that have occurred in the industry over the years, there has been 1 common denominator that nobody talks about & that is that the venture industry finances about 1k companies a year (that’s the whole industry)!” ”In the US economy there are about 700k businesses formed every year & about 10% raise angel money & about 1/700th of them raise venture money. The industry is a very small fraction of the financial market but it is very important because it creates companies like Google & Cisco who end up being the job creators & the engines of growth.” “There’s a lot of cash both upstream & downstream & our job is to find among those of the 70k that angels finance 1k that can grow to be significant businesses. If we’re lucky we can get it right 1 out of 10 times? And fortunately we get well paid most of the time by that 10% that do work out.” He sees the hurdles mainly from the government changes. Of 1k companies backed by VC each year less than 100 will go public. ”We need an occasional outsize success to make our industry work, and the challenges of being a young public company in the US these days make our job a lot harder!”
