Monday, November 13, 2006
Interview with Beau Laskey, EDF Ventures
Beau Laskey is a General Partner at EDF Ventures (www.edfvc.com), a venture firm that just opened an office in San Diego. Michigan-based EDF has backed companies in the area including Intralase, Therox, and Zyray Wireless. We spoke with Beau about the new office, why the firm decided on Southern California, and their positive outlook on the Southern California market.
Ben Kuo: Why did you decide to open an office in Southern California?
Beau Laskey: Southern California got started for us in the 1998, 1999 timeframe. We founded a couple of companies, and had relocated them to California. Two of the companies are in Irvine, both in the medical device space, including Intralase, originally from the University of Michigan, which is now public and doing really well. The other is Therox, which was started at Wayne State, and moved to Irvine as well. We have raised lots of follow-on additional dollars, and they have done really well. As part of those investments, we got to know the So Cal markets. In the 1998, 1999, and 2000 timeframe, we invested in Zyray Wireless, and in coming out for board meetings and meeting more and more folks, we saw great opportunities here. We were here to look at university-based technology, which is the genesis of our fund. We started doing university spinouts from the top 5 or 8 research universities in the Midwest--including the University of Michigan, Carnegie Mellon University, and Purdue. A handful of those companies had relocated to the west coast, where we were attracted to investments at UC San Diego, Caltech, and other universities here. We saw there was a good infrastructure, and availability of executive and mid-level talent to make those companies successful. That was a huge positive. If you look across wireless, software, semiconductor, and other opportunities, there are lots of good strong folks here. In the venture landscape, there are resident funds which are great funds to work with, and there's a great opportunity with the folks here looking to make investments. I think it continues to be an up-and-coming market opportunity, and we wanted to have someone on the ground here to make investments. It's all about market opportunity, this area is underserved, and we wanted to get on the ground and take advantage of the leadership opportunity.
Ben Kuo: What kinds of investments are you looking to make?
Beau Laskey: Twenty to twenty-five percent of our investments are in the seed stage, fifty to sixty percent more is in Series A, as the first institutional dollars in. In both cases, we try to be the first institutional investors. However, we are happy to syndicate with angels and other venture funds. The last twenty to twenty-five percent of our investments are more opportunistic and later stage. However, those must be in our strategic areas of focus. The couple of areas we continue to look at are mobility--there's a whole chain of things you can look at in mobility, from software to semiconductors, to imaging devices--there's lots in that stack--from software for consumers, to embedded software for the phone itself. Another vertical is security, and we continue to be interested there, where we have a couple of investments. There's also the whole world of data integration and intelligence, where there is a huge opportunity. There is lots of growth in the market, with the wave of moving from PSTN telephones to IP-based communications. I've currently got one investment in that world. We are looking at early stage investments, and in terms of dollars we're willing to do several thousand dollars up to 2 to 2.5 million in a first investment. Obviously, we reserve a good chunk for followup investing. Across those verticals, it's going to be fifty percent of some form of software, twenty-five percent more focused on niche semiconductor or licensing opportunities, and twenty-five percent open to new technology, unique areas, or different technology out of a university or whatever, leaving some chunk open for opportunistic opportunities.
Ben Kuo: How big are your funds?
Beau Laskey: We have three funds, with just under $180M across all three funds. Fund three is a $60M fund, and we probably have fifteen to sixteen investments in the fund.
Ben Kuo: You mentioned earlier you relocated a couple of firms to Irvine, why there?
Beau Laskey: That was just two firms, the other three companies are in San Diego. Specifically, they were device companies, and there was talent and experience for what the companies were doing. If you look at Therox and Intralase, we recruited the management team, bought a laser fab in the 1998 and 199 timeframe, and we were able to get a turnkey management team to turn it into a company.
Ben Kuo: What are you looking for in an opportunity?
Beau Laskey: We're looking for large markets. Given where we play, we don't want to compete with the largest funds in the world. We're looking for mid-market opportunities where you can definitely make some money in a sizeable market. We don't want to chase the next $5 billion market where all the VC dollars are going. It's just like regions--there are underserved markets from product and customer perspective. You can look at mid market opportunities, and there are $100M opportunities which are not really being addresses, where the big funds believe they can't investment enough money, or are not sexy enough. That's where we spent a fair amount of time. In terms of an entrepreneur, we want someone who has some strong industry experience, and really knows the ins and outs of the bizdev side, understands customers, and customer needs. The big thing for me is someone I can work with as a partner. I know lots of people say that, but I want someone with big ears, who is willing to listen, is coach-able, and is willing to change perspectives and views as the company moves forward.
Ben Kuo: Thanks for the interview!