BK: What's the focus of Smart Technology Ventures III, and what kind of companies are you targeting?
DN: Our focus will be on wireless infrastructure, optical components and subsystems and broadband internet infrastructure.
BK: Do you have a geographic focus as well?
DN: Santa Barbara to San Diego; however, we will go outside this area for later stage companies.
BK: Tell me a little bit about your prior fund's investments: any companies you're particularly proud of that we might know?
DN: Prior IPO's include Vertical Net (VERT), Sequoia Software (SQSW) and Centillium (CTLM). Also, Innovent (formerly Microlink) was recently acquired by Broadcom (BRCM) for $440 million.
BK: How did you get into the VC business?
DN: The Nazarians were one of the lead investors in Omninet, the dominant provider of satellite based tracking systems for the transportation industry, which merged with Qualcomm, Inc. (www.qualcomm.com ) in 1988. This began our journey in to the VC business. In November 1997, Smart Technology Ventures I was founded, followed by Smart Technology Ventures II in March 1999. Smart Technology Ventures III (a $175 million SBIC fund) closed in April 2000.
BK: What's your style of investment? Active/passive, something in between?
DN: We are active investors, especially for those companies in which we lead or co-lead the investment. In these cases, we almost always have board representation. In many other cases, we have board observation rights.
BK: What do you think the biggest challenge is for VCs right now?
DN: Due to the tremendous amounts of capital being raised, valuations are being bid above equilibrium levels -- especially in "hot" areas.
BK: Have you found it difficult to find companies to fund in the area?
DN: No. To the contrary, our deal flow has been strong, due in large part to our background and experience in the wireless and other technology areas.
BK: Finally, if you were to decribe one thing about your fund and why a company should come to you for funding, what would it be?
DN: Our ability to roll up our sleeves and work with the entrepreneur to build a strong company. We bring both strong technical and business experience to the table.