From 1990-1998 Tom was a general partner at Sequoia Capital, one of the leading venture capital firms in the world. Recently, we caught up about how he broke into the venture world and what he thinks makes a good investor. Below is a snippet of our Q&A.
How did you first get into venture capital?
I was on the faculty of the Pratt School of Engineering at Duke when I met Steve Blank at an aerospace conference. Steve hired me to work for Ardent Computer where he was a co-founder and VP Marketing. At Ardent, I usually ended up presenting to the Board and VC investors. I started reviewing a few business plans for the VC’s and decided I liked the work. At that time my total work experience was a PhD in fluid dynamics doing fighter jet computer simulations. I had no idea what a balance sheet was then but I started studying on my own to learn. Steve taught me a lot about the Valley and the startup business. It was a wild time back then.
How did you end up at Sequoia Capital?
I was hired into Sequoia in 1990 as an associate after a long 6 month interviewing process. They were looking for someone with communications experience and I got the job as an apprentice working for each of the partners over the first two years. All the senior guys were great teachers; helpful, demanding. The younger associates were very close and every deal was a team effort. It was a small firm then - 4 partners and 4 associates.
What skills does one need to be a good venture investor?
Don Valentine (founder of Sequoia Capital) always said you need five great skills to be a good venture investor: the ability to raise money, generate great deal flow, make smart investment decisions, build solid companies, and exit them profitably. The real beauty of the venture capital business is having all five things and doing them well in order to make money for your investors. Is it the same five today? You tell me!
Did you pass on any investment opportunities that you wish you hadn’t?
I am sure there were some we missed but there were so many good startups that we never worried about it. We did work to identify the most compelling investment themes and focus our deal flow in specific areas. Deal flow around Yahoo, Redback Networks, C-Cube, NetApp and Nvidia kept us busy.
How much (or little) do you keep up with venture today?
I still am an active angel investor and still like to help build companies. I am currently a co-founder and investor in Zeuss, which is on a pretty exciting path these days in the security space. But I have been lucky enough to have had several careers from being a scientist, to startup software guy, to VC to now philanthropist. I would not change anything in my work-life path. Each was a great challenge and there are several more great challenges in front of me.
Why did you invest in Collaborative?
I like the investment premise, the lineup, and the co-investors. Great deal flow is everything to a venture firm and Craig and the team have a track record of finding and getting in the best deals with the best co-investors. I like all the companies in the portfolio. They each are addressing huge markets, have awesome co-investors, and momentum.
What is one question (any question) you’d like to know the answer to?
There are always “what if” questions in life. My question would be what if I did not meet Steve Blank back in 1987, where would I be today?