Javelin Partners on early-stage opportunities

VC partner Noah Doyle explains why JP invested in Nexenta and Sense Networks

In this segment, Bambi Francisco continued her discussion with Noah Doyle, venture partner at Javelin Venture Partners. (See Interview I: What Javelin seeks to fund).

BF: You've invested in nine companies and have raised 70 million dollars for your fund. How many companies are you expecting to invest in over the next couple of years?

ND: This fund will include at least 18 to 20 companies, and possibly more than that.

BF: You'll be investing that in the next year or several years?

ND: It's going to be in the next year and a half.

BF: You will be looking for at least nine more companies in 18 months. What is the deal flow like out there? Are companies getting better?

ND: It's phenomenal. It's a combination of fundamental, economic trends. It's easier to start a business and cheaper to start a business. In this economy, people are being laid off and not seeing the opportunities in the larger companies. More and more, they are just starting their own businesses rather than going to a tough job market.

BF: Is that a trend of the economy or is there something generational going on? Are we going to see more entrepreneurs?

ND: I think you have a remarkable community of entrepreneurs who have done it before. If you think about the early days of the Silicon Valley, Apple Computer, and several generations of entrepreneurs who have now gone through the cycle. There is such a huge community of mentors and angel investors who can support this process that every new entrepreneur can go into this with a ton of support and great advice. There is also just enormous innovation. It's so easy to innovate. Anyone with a PC and access to the Internet can build a great product.

BF: What do you see too much of?

ND: There has been a big trend toward social networking products as well as several Twitter products that are useful and clever. But there is really a danger that if you build a product that is really a feature with something larger, ultimately that larger solution, the bigger player is going to build that feature and you may be out of business.

BF: Or buy it, like Twitter did with Surmize.

ND: Yes they may purchase but it may be only one and that would leave several behind.

BF: You made a few recent investments. Explain a couple of them.

ND: We will be closing out two new investments. One of them is Nexenta which is a fabulous tool for new Web related startups because it creates a virtual pool of storage using commodity hardware to create the equivalent of network-attached storage solutions. This brings equal or better performance to the traditional venders. It's highly scalable and in many ways a high revolutionary technology. The other one is Sense Networks which is a New York-based company that is a specialist at machine learning which is an advanced form of machine learning, which is an advanced form of data analytics, which extracts information from a data set that can be a very large complex. Their initial focus is around location information and using data from GPS and cell phones to understand how people's behavior no matter where they go, can be used to better target them for advertising. It's a very large market and advanced technology. There are many early stage companies that go to market

BF: You've got it down in terms of what you want to invest in. How much does it cost to be part of your fund if I'm an accredited investor and want to be part of it?

ND: It is a standard industry of economic structure for limited partners. It is institutional and that's a 70 million dollar fund. At this point, we are not seeking new limited partners.

BF: We wish you the best of luck with your company.