Work and Play Make for a Productive
Partnership at Entrepreneur Retreat
Entrepreneur. The word suggests glamour. An idea, a little hard work, and riches and fame will be yours. A 23-year-old college dropout builds a company with a billion dollar valuation. An aspiring entrepreneur leaves a large firm to start a rival across the street. The reward: planes, mansions and ever-climbing stock options.
The reality, of course, is very different. It takes a bit of luck and years - not months - of grueling work to achieve a modicum of success. Often, the entrepreneur’s life is contained to the four walls of an office. Friends are neglected and family ties become frayed.
After nearly four decades of standing by technology entrepreneurs as investor and trusted advisor, the Mayfield Fund understands the unique challenges of the entrepreneurial life. Many of the firm’s partners were once entrepreneurs themselves and today they share in the frustrations and victories, large and small, of their portfolio companies.
Mayfield’s annual Impact gathering was conceived as a respite from the daily grind, a place for entrepreneurs to meet other entrepreneurs, to trade ideas or to simply commiserate. It is a chance to talk with Mayfield partners in an informal setting where conversations are not limited by the clock or the reliability of a mobile phone connection. As important, it is a chance to have fun, an often-scarce commodity in the life of an overworked entrepreneur.
Nearly 75 Mayfield partners and entrepreneurs gathered in June at Quail Lodge in scenic Carmel Valley for Mayfield Impact 2007. With fun in mind, the firm kicked off Impact with the first Mayfield Challenge, a competition in which teams of three and four commandeered customized Land Rovers through an off-road obstacle course with honors going to those who navigated with the most speed and accuracy.
Venture capitalists and entrepreneurs share a thirst for competition. A hotly contested first place went to Team 5 led by Sonny Wu, managing director of GSR Ventures, Mayfield’s investment partner in China, Mayfield venture partner John Stockton, and Ubicom chief executive Cathal Phelan. The most “extreme” driver award went to Van Van Auken, a Mayfield partner emeritus whose license plate reads, ‘For Himself.’
On Day Two, Mayfield Managing Director and Impact host Janice Roberts welcomed the crowd and introduced a day of speakers and workshops. “We are excited that today we are able create value in our companies in more ways than we have seen in a long, long time.”
Mayfield Managing Director Robin Vasan delivered an overview of market conditions and Mayfield highlights. The venture industry has diversified by sector and stage, he said: “There are a whole new bunch of investors: angels, hedge funds, buyout firms, and private equity firms.”
The market for initial public offerings has rebounded, a critical component for technological advancement. “In 2006, there were 56 initial public offerings; the quality of these IPOs was beyond compare. The multiples are very aggressive. We’ve seen companies valued at 30, 40, even 80 times forward earnings,” he said. The infusion of capital has fed research and development budgets starved since the dot-com bust.
Paul Chamberlain, managing director for investment banking giant Morgan Stanley, said now is “the perfect time to be an entrepreneur.” “There is a perfect storm of liquidity options in terms of IPOs, mergers and acquisitions, private equity and hedge funds.” While 60 percent of the money raised went to U.S. based startups, today the reverse is true, Chamberlain said. Of the 10 largest IPOs in 2006, eight were non-U.S. firms.
Much of the spotlight was focused on Mayfield’s ventures in India and China. Vasan and Managing Director Navin Chaddha, named one of Forbes Magazine’s top dealmakers in 2007, lead Mayfield India. Mayfield India was established in recognition of the growing opportunities for direct investment in Indian-run companies.
“It used to be popular to say that venture firms only invest in companies they can drive to,” Vasan said. “But we can no longer afford to build all of these companies in Silicon Valley. It’s become too expensive.” Mayfield hired two investment veterans for its office in Bombay. “We were uncomfortable playing tourist VC,” said Chaddha who, along with Vasan is based in Menlo Park. To date, Mayfield’s largest Indian investment is Tejas Networks, a promising optical networking technology firm.
Mayfield took the similar approach in China creating and partnering with GSR Ventures in Beijing. Last fall, Mayfield raised GSR II, a $200 million investment fund. Managing Partner Kevin Fong in Menlo Park and GSR in Beijing lead Mayfield China. Among the startups that have been funded is a dating site for Chinese singles that boasts 8 million members. “You get the sense in India and China that people truly believe if you have a good idea and work hard anything is possible,” Fong said. The CEOs also enjoyed smaller birds-of-a-feather gatherings by sector where they candidly discussed best practices in recruiting, customer acquisition and globalization.
A highlight of the event was an inspirational talk by South African sailor Neal Peterson who won an around the world sailing contest at the age of 32. Peterson, who is black, overcame racial prejudice, physical disability, at-sea accidents and inclement weather in his quest to raise money to build a boat and compete on the high seas. “We are entrepreneurs. We wake up smiling because every day represents a new possibility to change the world,” Peterson said. “In your game you play with your investors’ money,” he said. “In my game we play with our lives.”
