I have exposure to. I can help their portfolio companies better connect with large corporate guys down here.” For starters, he points to his deep relationships with companies like Nvidia, Intel, and Hewlett-Packard.
Chizen and McAleer go back a good 15-plus years, dating back to when Chizen joined Seattle-based Aldus, where McAleer was chief financial officer. Chizen then started at Adobe, as vice president and general manager of consumer products, after the company acquired Aldus in 1994. Previously, Chizen had worked at Mattel, Microsoft, and Claris.
It is a challenging time to get into the venture business, yet this isn’t the only case we’ve seen of a local VC firm taking the opportunity to bolster its talent from the corporate world. Just last month, Seattle-based Madrona Venture Group announced it had hired Brian McAndrews, the former CEO of aQuantive and senior vice president at Microsoft, as a new managing director.
Chizen provided some extensive thoughts on where the venture industry is headed, and where Voyager fits in. “At Adobe, I had this view of the VC world, maybe it wasn’t fair,” Chizen says. “That especially in recent years, it was pretty easy, there was a lot of money, and getting investors to invest was not that difficult. There were a lot of startups who got funded. It was really a game of luck—you invest in companies and hope to get a home run.” Now, he says, things have changed a lot.
“It’s back to basics. IPOs are no longer easy. Getting large valuations, I don’t believe is going to happen for the most part,” he says. “It means putting a smaller amount of money into deals is going to be critical. It’s hard to take $30-60 million and get a return back to your investors, whereas smaller firms like Voyager, who can put $1 or $2 million to work, will be able to get the return they need through an IPO or, more likely, through a strategic acquisition. VCs will have to work harder, move downstream, and have differentiation—in Voyager’s case, its strategy around go-to-market—so there’s real value-add to the portfolio team. And getting money from investors is going to be more difficult. Going forward, they’re going to pick and choose more carefully. Hopefully, for firms like Voyager, it allows for differentiation to shine through.”
Lastly, I had to ask Chizen to compare the startup scene in the Northwest with Silicon Valley. “The number of opportunities, of individuals looking to start something new, is significantly less than the Valley,” he says. “But when you find one, it’s a group of really dedicated people who care less about getting rich, and more about the passion for what they’re doing. Many people down here [Silicon Valley], it’s about making money. While someone should be rewarded for being successful, it’s a lot more fun to work with someone who’s passionate about what they’re doing. And they tend to stick around.”
McAleer adds, “If you compare this downturn to 2001, there are better deals. The quality is better, and quantity is more. The talent level is better. Many of these people have been through at least one downturn, and that helps. This region is really well positioned. In some ways, you can argue it’s stronger than the Valley. We’re still very bullish on the Seattle area.”
