The Exchanges

Q What do you think the future of VC, corporate VC, sorry, looks like? Does it also look like a much greater piece of the pie than 25%, or do you think the growth in their sector will remain as it is?

A Now, I don't have a crystal ball, but there was a recent report, actually just very topical, released, commissioned by Telstra, that came out just a couple of days back, which said that they see corporate VC going from 25% to 35%, I think, over the next five to 10 years. You know, directionally, I think I view that as, uh, as a reality. It's going to either stay or, or grow, but it won't shrink. And, and as I said, the imperatives for large corporations to find new sources of innovation and to grow beyond what their, uh, quote unquote, core business will not go away. And so if that doesn't go away, there is no reason why participation in the startup ecosystem is going to go down. So I, I sort of have the view that directionally it's headed in the direction of having more participation than less.

AI assessment note: “they see corporate VC going from 25% to 35%, I think”

Q The biggest mentor to you and how it came about?

A My biggest mentor, uh, without naming the person first is how it came about is when I, when I joined Qualcomm Ventures, you know, sort of very, very early on. And we were, we were very early and we were taking bets which were very sort of hard for many people in the company to, to sort of understand. And so, My mentor, by default, became the most senior member of my investment community, which was at that time, it was going to be the CEO of Qualcomm, Dr. Paul Jacobs, and he sort of, he basically gave me the leeway. He basically said, okay, I understand that there is, you cannot trace a direct line between the investment and Qualcomm, but I understand where you're going. You're saying if the company is successful, we'll benefit indirectly and directly. And I, while I don't completely agree with your investment, I will let you do it because I do think that you assembled a good team of folks. And so I'll let you do it. And that was sort of 2003, 2004 when corporate VCs were not well established. And so he sort of de facto became my mentor. And sort of I use that philosophy to hire my team and train my team, which is I will let you do this because I believe you're smart. And I think what you're doing is in the best interest of Qualcomm. And I think you will look out for that interest and I trust you. And so go make a few investments and I will give you that leave it. And that becam…

AI assessment note: “My mentor, by default, became... the CEO of Qualcomm, Dr. Paul Jacobs”

Q The biggest mentor to you and how it came about?

A My biggest mentor, uh, without naming the person first is how it came about is when I, when I joined Qualcomm Ventures, you know, sort of very, very early on. And we were, we were very early and we were taking bets which were very sort of hard for many people in the company to, to sort of understand. And so, My mentor, by default, became the most senior member of my investment community, which was at that time, it was going to be the CEO of Qualcomm, Dr. Paul Jacobs, and he sort of, he basically gave me the leeway. He basically said, okay, I understand that there is, you cannot trace a direct line between the investment and Qualcomm, but I understand where you're going. You're saying if the company is successful, we'll benefit indirectly and directly. And I, while I don't completely agree with your investment, I will let you do it because I do think that you assembled a good team of folks. And so I'll let you do it. And that was sort of 2003, 2004 when corporate VCs were not well established. And so he sort of de facto became my mentor. And sort of I use that philosophy to hire my team and train my team, which is I will let you do this because I believe you're smart. And I think what you're doing is in the best interest of Qualcomm. And I think you will look out for that interest and I trust you. And so go make a few investments and I will give you that leave it. And that becam…

AI assessment note: “the CEO of Qualcomm, Dr. Paul Jacobs, and he sort of, he basically gave me”

Q that attracted you to venture. Um, and now obviously you're at Microsoft Ventures, and so I do want to start with a question from, from one of the partners, uh, with you at Microsoft and, and the man who introduced us, Matt. So talk to me. He wants to know, what's it like setting up a firm from scratch like you are with Microsoft now? How is that for you?

A Well, it was, uh, it was one of the primary reasons I took the job, uh, when Microsoft came calling. I mean, there's many other reasons to join Microsoft as a company, but one of the attractions was the fact that I would be employee number one in my own startup, which is, you know, the startup in this case is, is starting up a new venture firm. So it was really very exciting when I got that, you know, I did this once over, uh, 12 years back and the chance, you rarely get a chance to do very similar thing again, because you have a lot of lessons learned. So I said, everything I've learned in the last 12 years, I'll take that. I'll jump into it. I'll try to make sure I don't make the same mistakes and do it hopefully much better the second time around. So it was, uh, it's very exciting to start it. It obviously means that you to build, um, everything again, starting with the biggest component of the arm, which is the people. And so from my perspective, I spent the first six months almost just basically recruiting. And when I say recruiting, it doesn't mean that, you know, I got people to come up to my office and, uh, and just had an interview. It meant that I was taking them out for I was meeting where they were. I wanted to see them in many different settings, because ultimately, what I was trying to build was a culture that would last long, and people who would fit into that cu…

AI assessment note: “I spent the first six months almost just basically recruiting.”

Q Why is that? Is that because the fiduciary responsibility of LPs is different to you now as a corporate with Microsoft as the LP? Is that the reason?

A Absolutely not. That is not the reason. The reason is there is a lot of flexibility in the kinds of checks corporate VCs can write, the kind of stages we can invest in, kind of sectors we can invest in. If you think of a firm that has raised, let's say, a 102 103 hundred million from LPs, you have a set formula. It's very, very hard to change their formula, which is you can do X number of investments, the check size has to be Y, you need to get 20%, and those are sort of almost very hard exceptions to break because that's how the model works. And if in that particular model, you cannot go and say, hey, go ahead and make a small investment, and let's see how it works out. You really can't. In the corporate VC environment, we don't have constraints of, we have to write a check of X million dollars. We have to get 20% ownership. We only, only can invest in a sector that the LPs gave us money for. When, when we invest on behalf of large corporations, the interests are very, very varied. It can be a hardware company one day. It could be a software company the next day. It could be a, um, Met device company the other day. So it's a very varied group of companies you can invest in. Uh, we don't have to take 20% ownership because it is not the purpose. We need to make financial return, but it is not a set fund size many times. So I would say the degree of flexibility in how the fund is…

AI assessment note: “Absolutely not. That is not the reason. The reason is there is a lot of flexibility”

Q What do you think the future of VC, corporate VC, sorry, looks like? Does it also look like a much greater piece of the pie than 25%, or do you think the growth in their sector will remain as it is?

A Now, I don't have a crystal ball, but there was a recent report, actually just very topical, released, commissioned by Telstra, that came out just a couple of days back, which said that they see corporate VC going from 25% to 35%, I think, over the next five to 10 years. You know, directionally, I think I view that as, uh, as a reality. It's going to either stay or, or grow, but it won't shrink. And, and as I said, the imperatives for large corporations to find new sources of innovation and to grow beyond what their, uh, quote unquote, core business will not go away. And so if that doesn't go away, there is no reason why participation in the startup ecosystem is going to go down. So I, I sort of have the view that directionally it's headed in the direction of having more participation than less.

AI assessment note: “they see corporate VC going from 25% to 35%... directionally, I think I view that as”

Q I'm intrigued also, again, as a newly minted VC, kind of LP relations is, is a critical part of any, um, traditional venture fund model. How does LP relations work then, then with you and Microsoft Ventures, and what's the kind of reporting structure?

A The way to think of LP relations, obviously, is a single LP, so Microsoft is the sole source of funds for, for the group, and that means that we have to report to Microsoft. Just like LPs, uh, you need, LPs would like to get reported. They want to find out what investments you've done, What the value of the investments is, you know, are they doing well, not doing well. So a whole host of financial reporting that any other LP would demand. But I think the interesting thing is in addition to that, the biggest value from a Microsoft perspective is what's really happening in the startup ecosystem. Where are the pockets of innovation? Where is the puck going next? Those are things that are above and beyond what a traditional LP relationship looks like. And I think most of the value that The parent company gets out of it is in the latter category, not just not the former, because on the former side, we assume that you hire the best people and you'll make money as any other VC should be making money. You make good investments. I've always been a believer that good financial investments lead to good strategic outcomes. Uh, and you know, if a company doesn't do well, there's no strategic benefit for anybody. There's really, we are focused on finding the best companies thrive financially, but that also lead to These good strategic outcomes for the parent company. So I think the, the LP r…

AI assessment note: “Microsoft is the sole source of funds for, for the group, and that means”

Q that attracted you to venture. Um, and now obviously you're at Microsoft Ventures, and so I do want to start with a question from, from one of the partners, uh, with you at Microsoft and, and the man who introduced us, Matt. So talk to me. He wants to know, what's it like setting up a firm from scratch like you are with Microsoft now? How is that for you?

A Well, it was, uh, it was one of the primary reasons I took the job, uh, when Microsoft came calling. I mean, there's many other reasons to join Microsoft as a company, but one of the attractions was the fact that I would be employee number one in my own startup, which is, you know, the startup in this case is, is starting up a new venture firm. So it was really very exciting when I got that, you know, I did this once over, uh, 12 years back and the chance, you rarely get a chance to do very similar thing again, because you have a lot of lessons learned. So I said, everything I've learned in the last 12 years, I'll take that. I'll jump into it. I'll try to make sure I don't make the same mistakes and do it hopefully much better the second time around. So it was, uh, it's very exciting to start it. It obviously means that you to build, um, everything again, starting with the biggest component of the arm, which is the people. And so from my perspective, I spent the first six months almost just basically recruiting. And when I say recruiting, it doesn't mean that, you know, I got people to come up to my office and, uh, and just had an interview. It meant that I was taking them out for I was meeting where they were. I wanted to see them in many different settings, because ultimately, what I was trying to build was a culture that would last long, and people who would fit into that cu…

AI assessment note: “I spent the first six months almost just basically recruiting.”

Q Why is that? Is that because the fiduciary responsibility of LPs is different to you now as a corporate with Microsoft as the LP? Is that the reason?

A Absolutely not. That is not the reason. The reason is there is a lot of flexibility in the kinds of checks corporate VCs can write, the kind of stages we can invest in, kind of sectors we can invest in. If you think of a firm that has raised, let's say, a 102 103 hundred million from LPs, you have a set formula. It's very, very hard to change their formula, which is you can do X number of investments, the check size has to be Y, you need to get 20%, and those are sort of almost very hard exceptions to break because that's how the model works. And if in that particular model, you cannot go and say, hey, go ahead and make a small investment, and let's see how it works out. You really can't. In the corporate VC environment, we don't have constraints of, we have to write a check of X million dollars. We have to get 20% ownership. We only, only can invest in a sector that the LPs gave us money for. When, when we invest on behalf of large corporations, the interests are very, very varied. It can be a hardware company one day. It could be a software company the next day. It could be a, um, Met device company the other day. So it's a very varied group of companies you can invest in. Uh, we don't have to take 20% ownership because it is not the purpose. We need to make financial return, but it is not a set fund size many times. So I would say the degree of flexibility in how the fund is…

AI assessment note: “Absolutely not. That is not the reason. The reason is there is a lot”

Q interest to me now, again, just joining the world of VC is How much of a role does mentorship play for you? Often VC firms are personnel light, and so the managing partners and partners are very time constrained, and don't always have the time for the onboarding of new employees. How much of a role do you think kind of mentoring and time allowance plays in, in onboarding successfully?

A I think mentoring is, is critical. I mean, mentoring is critical, but I think, as I said, uh, mentoring alone is not enough, because at some point, The young VC or the VC who's coming into the, into the profession has to spread out on their own, and mentoring alone won't do it. What you have to do is, after a period of mentoring, you have to allow them to be able to make decisions, and I think, ultimately, as I said, you never learn from books. VC is not a science. You can learn. It's very much an art, and unless you go through a couple of investments and figure out what works and what doesn't work, ultimately, that's what trains you. So you have to start with mentoring. You obviously have to spend a lot of time trying to just At least impart what you've learned, which, you know, again, everybody has learned something in their lives, and there's some value to imparting them to new, um, newly minted professionals, but then ultimately, they will make their own decisions and learn from their journey, and you add that up with the mentorship you provided, and that should lead to a good, successful career.

AI assessment note: “I think mentoring is, is critical. I mean, mentoring is critical, but”

Q I'm intrigued also, again, as a newly minted VC, kind of LP relations is, is a critical part of any, um, traditional venture fund model. How does LP relations work then, then with you and Microsoft Ventures, and what's the kind of reporting structure?

A The way to think of LP relations, obviously, is a single LP, so Microsoft is the sole source of funds for, for the group, and that means that we have to report to Microsoft. Just like LPs, uh, you need, LPs would like to get reported. They want to find out what investments you've done, What the value of the investments is, you know, are they doing well, not doing well. So a whole host of financial reporting that any other LP would demand. But I think the interesting thing is in addition to that, the biggest value from a Microsoft perspective is what's really happening in the startup ecosystem. Where are the pockets of innovation? Where is the puck going next? Those are things that are above and beyond what a traditional LP relationship looks like. And I think most of the value that The parent company gets out of it is in the latter category, not just not the former, because on the former side, we assume that you hire the best people and you'll make money as any other VC should be making money. You make good investments. I've always been a believer that good financial investments lead to good strategic outcomes. Uh, and you know, if a company doesn't do well, there's no strategic benefit for anybody. There's really, we are focused on finding the best companies thrive financially, but that also lead to These good strategic outcomes for the parent company. So I think the, the LP r…

AI assessment note: “Microsoft is the sole source of funds... so a whole host of financial reporting”

Q Well, how can I not pick up on one element there? As a developing VC myself now, you said about a strict methodology in terms of training. I'd love to hear more about that, how that process looks for you. Is it kind of instant ownership? Is it Very much a backseat in the IC and watch and learn style. How does that process look for you?

A For me, it's, uh, when I say strict methodology, I mean, uh, things that have worked, and it is really about ownership, and what I mean by that is, the lessons I've learned which have worked well is, you hire what you think are the best, smartest people, you give them responsibility very early on, and you give them responsibility by letting them essentially write small checks, make small investments, and, What that process brings about is, it brings about these lifelong lessons for the person who's making those investments. Many times, you almost allow them to make mistakes, and when I say mistakes, I mean, as a VC, it's a lot about patent matching, so you've seen things happen, which you don't want to repeat. If a newly minted VC wants to write a small check, and you think that's a mistake, many times you'll say, why don't you go ahead and do it? And what happens is, If it turns out it didn't work out, they will never again do it again. They will just learn from that. The best people are self-aware. They realize they made a mistake, and at the time when they have to write the bigger checks, they're much better positioned to make the right decisions. So the methodology we used then is all about empowering. It's you empower the people to make the, make the decisions. Once they make the decisions, it's a pride of ownership issue, and they not only have money on the line, but they…

AI assessment note: “give them responsibility very early on, and you give them responsibility by letting them”

Q Well, how can I not pick up on one element there? As a developing VC myself now, you said about a strict methodology in terms of training. I'd love to hear more about that, how that process looks for you. Is it kind of instant ownership? Is it Very much a backseat in the IC and watch and learn style. How does that process look for you?

A For me, it's, uh, when I say strict methodology, I mean, uh, things that have worked, and it is really about ownership, and what I mean by that is, the lessons I've learned which have worked well is, you hire what you think are the best, smartest people, you give them responsibility very early on, and you give them responsibility by letting them essentially write small checks, make small investments, and, What that process brings about is, it brings about these lifelong lessons for the person who's making those investments. Many times, you almost allow them to make mistakes, and when I say mistakes, I mean, as a VC, it's a lot about patent matching, so you've seen things happen, which you don't want to repeat. If a newly minted VC wants to write a small check, and you think that's a mistake, many times you'll say, why don't you go ahead and do it? And what happens is, If it turns out it didn't work out, they will never again do it again. They will just learn from that. The best people are self-aware. They realize they made a mistake, and at the time when they have to write the bigger checks, they're much better positioned to make the right decisions. So the methodology we used then is all about empowering. It's you empower the people to make the, make the decisions. Once they make the decisions, it's a pride of ownership issue, and they not only have money on the line, but they…

AI assessment note: “it is really about ownership, and what I mean by that is... give them responsibility”

Q We discussed the kind of future of corporate VC as a, as a model there. I do want to discuss the future of diversity in VC. It's often something that's much discussed in VC. I'm intrigued to hear your take on, on diversity within the sector. And how prominent it's been for you in terms of what you've witnessed?

A It's very well known that our overall sector suffers from a lack of diversity, and I think, again, I come back to how VCs get their start. I mean, getting a start in a VC firm is just, is very, very hard. I mean, there's the, I would say, not the easy route, but the most obvious route is you become an entrepreneur, you sell your company, and then, you know, you join a VC. That's, that's one route. The other route takes you from whether it's Engineering or, or, or liberal arts to, to sort of getting some work, uh, work, getting an MBA, and then sort of finding your way into an associate role, and then you sort of rise up the ranks, but not every associate becomes a GP or managing director, and so there's some attrition there, but historically, it's been very, very hard to see how there's sort of just a fundamental lack of diversity in the way it is, and I, I sort of trace it back to a little bit of the inflexibility with the VC model, and the financial VC model, and why I think corporate VCs, there's a lot more diversity. And because, as I said, come back to, we can train, we can take chances on, on folks. We hire the best people. You don't, not rigid in terms of number of partners who can write checks. And so I think corporate VC lends itself a lot more to diversity. And for me, it's not just about numbers. It really, it's about who the end customers are. The end customers are …

AI assessment note: “our overall sector suffers from a lack of diversity, and I think, again, I come back to”

Q interest to me now, again, just joining the world of VC is How much of a role does mentorship play for you? Often VC firms are personnel light, and so the managing partners and partners are very time constrained, and don't always have the time for the onboarding of new employees. How much of a role do you think kind of mentoring and time allowance plays in, in onboarding successfully?

A I think mentoring is, is critical. I mean, mentoring is critical, but I think, as I said, uh, mentoring alone is not enough, because at some point, The young VC or the VC who's coming into the, into the profession has to spread out on their own, and mentoring alone won't do it. What you have to do is, after a period of mentoring, you have to allow them to be able to make decisions, and I think, ultimately, as I said, you never learn from books. VC is not a science. You can learn. It's very much an art, and unless you go through a couple of investments and figure out what works and what doesn't work, ultimately, that's what trains you. So you have to start with mentoring. You obviously have to spend a lot of time trying to just At least impart what you've learned, which, you know, again, everybody has learned something in their lives, and there's some value to imparting them to new, um, newly minted professionals, but then ultimately, they will make their own decisions and learn from their journey, and you add that up with the mentorship you provided, and that should lead to a good, successful career.

AI assessment note: “I think mentoring is, is critical. I mean, mentoring is critical”

Q And I'm super interested. You said there about 12 years ago, obviously you did it before. What were those really big lessons that you took with you then to establishing your second startup in Microsoft Ventures? Were there any that stand out?

A I think the, the, some of the good lessons I took, which I sort of, I'm doing it again, uh, Basically, what I learned was you can absolutely take young professionals who are smart, who are just pure smart, who have never done VC, and you can train them. And I have a specific methodology for training, but, you know, I knew that I trained folks who had not done VC or not written, quote unquote, their first check, and, uh, and help them get into the VC world, but also thrive in it. So I think that was the biggest lesson I said was I was successful in doing that at Qualcomm, and I felt that I could absolutely do that in my And that's sort of primarily how I've done it. I've obviously hired folks who have done VC before, but I've also heard folks who have sort of not written checks or not been allowed to write checks and sort of said, look, you can do that now because I fundamentally believe in you. So I think that's sort of the lesson I learned. It took me, I would say, the best way to think about it is it took 12 years to build Qualcomm Ventures the way it is. I'm compressing that time frame because I'm taking a lot of the lessons. It took me a while to understand how to hire And what kind of people to bring in, and I feel that I have, uh, hopefully the formula right, and now I can accelerate it, and that's what I've done, I think, in, in less than 12 months, uh, built, I think, a…

AI assessment note: “Basically, what I learned was you can absolutely take young professionals who are smart”

Q And I'm super interested. You said there about 12 years ago, obviously you did it before. What were those really big lessons that you took with you then to establishing your second startup in Microsoft Ventures? Were there any that stand out?

A I think the, the, some of the good lessons I took, which I sort of, I'm doing it again, uh, Basically, what I learned was you can absolutely take young professionals who are smart, who are just pure smart, who have never done VC, and you can train them. And I have a specific methodology for training, but, you know, I knew that I trained folks who had not done VC or not written, quote unquote, their first check, and, uh, and help them get into the VC world, but also thrive in it. So I think that was the biggest lesson I said was I was successful in doing that at Qualcomm, and I felt that I could absolutely do that in my And that's sort of primarily how I've done it. I've obviously hired folks who have done VC before, but I've also heard folks who have sort of not written checks or not been allowed to write checks and sort of said, look, you can do that now because I fundamentally believe in you. So I think that's sort of the lesson I learned. It took me, I would say, the best way to think about it is it took 12 years to build Qualcomm Ventures the way it is. I'm compressing that time frame because I'm taking a lot of the lessons. It took me a while to understand how to hire And what kind of people to bring in, and I feel that I have, uh, hopefully the formula right, and now I can accelerate it, and that's what I've done, I think, in, in less than 12 months, uh, built, I think, a…

AI assessment note: “Basically, what I learned was you can absolutely take young professionals who are smart”

Q We discussed the kind of future of corporate VC as a, as a model there. I do want to discuss the future of diversity in VC. It's often something that's much discussed in VC. I'm intrigued to hear your take on, on diversity within the sector. And how prominent it's been for you in terms of what you've witnessed?

A It's very well known that our overall sector suffers from a lack of diversity, and I think, again, I come back to how VCs get their start. I mean, getting a start in a VC firm is just, is very, very hard. I mean, there's the, I would say, not the easy route, but the most obvious route is you become an entrepreneur, you sell your company, and then, you know, you join a VC. That's, that's one route. The other route takes you from whether it's Engineering or, or, or liberal arts to, to sort of getting some work, uh, work, getting an MBA, and then sort of finding your way into an associate role, and then you sort of rise up the ranks, but not every associate becomes a GP or managing director, and so there's some attrition there, but historically, it's been very, very hard to see how there's sort of just a fundamental lack of diversity in the way it is, and I, I sort of trace it back to a little bit of the inflexibility with the VC model, and the financial VC model, and why I think corporate VCs, there's a lot more diversity. And because, as I said, come back to, we can train, we can take chances on, on folks. We hire the best people. You don't, not rigid in terms of number of partners who can write checks. And so I think corporate VC lends itself a lot more to diversity. And for me, it's not just about numbers. It really, it's about who the end customers are. The end customers are …

AI assessment note: “I think corporate VCs, there's a lot more diversity.”