Investment Thesis: Don Hutchison (Part 4 – Final)

SM: Describe your ideal entrepreneur. DH: Smart, hungry, focused, yet open
minded, capable of creative and analytical inspiration and coachable in those areas where they can use help. To use a phrase mentioned earlier, I like working with people who take the game very seriously and are driven to win, but who manage not to take themselves too seriously.

In terms of background I’d expect they have a reasonable degree of experience relative to their ambitions, which, depending on the subject area and individual talents and personalities involved can range from a few years to over twenty. I’m looking for folks who have their own skin in the deal; i.e. they’ve invested their own money, given up a job, etc. I want someone who is as driven to succeed as I am.

SM: Which VCs do you like to work with as part of a syndicate or follow-on? DH: There are many outstanding VC’s in this market, and singling out any one partnership is difficult. It is also usually the case that your relationship with any one firm revolves around personal associations with one or two partners there. That said, among the many venture firms I or my invested companies have enjoyed working with are: Sequoia, Mohr Davidow, Emergence, Doll, Charles River Ventures, Trinity, Azure, USVP, Granite, Mayfield, Morganthaler and Venrock. (SM: George Zachary and Gus Tai pointed me to Don for this series.)

SM: What is your thesis on entrepreneurial / investment opportunities given the state of the market? What markets are likely to crash? What markets are likely to open up? DH: This is a far ranging question. In brief, while there are over funded sectors, or niches, there is imo, more opportunity for creating meaningful businesses now than at any time in the
past 10 to 15 years.

While we’re all saturated by the glut of coverage associated with internet centric deals and especially the ‘web 2.0’ associations, the truth is we are poised for unparallel growth. The major caveat for me is the unknowable realities associated with politics, war and terrorism. As for technology, finance and markets, we have staggering opportunities emerging almost daily as a consequence of the most material communication innovation of the digital age. If the internet epoch were to be measured by a calendar year, I’d say we’re barely into February.

Couple the rapid advance of software functionality, driven by increasingly open applications and across the board declining prices for infrastructure and end point devices and you have the ingredients for material growth in business and consumer centric products and services that offer real value at easily affordable prices. Looking at iger order ops, you have the means to
tackle some of the most intransigent economic issues of developed and emerging populations. Improving major operating modalities in areas such as communications, energy and health care obviously represents enormous economic potential as well.

One caveat for all investors and esp. Venture stage investors in the current lack of an IPO market. To the extent your venture investing strategy is tied to a ‘home-run’ outcome floating the fund this is a scary environment. If ‘small ball’ returns–a string of singles, doubles, a few triples and a very occasional home run won’t float your boat this may be a difficult time to invest a fund.

This segment is part 4 - Final in the series : Investment Thesis: Don Hutchison
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