Israeli VC on Sand Hill road

It's cocktail season, so what do you do?

May.  The weather is beautiful (finally!) and kids are still in school, what a great time for cocktail season to begin.  Tuesday is Israeli Independence Day, which means there are many events that cater to the Israeli-related community here in Silicon Valley, in addition to the regular pace of the industry networking events.  For many, this is the season to fear!

What do you do when you enter a room full of people holding chardonnay, and nobody looks famliar?  Or, when you finally talk to somebody , and after a few minutes of chit chat, you really don't want to talk to them anymore, or somebody that you're talking to, doesn't want to talk to you anymore ?

I thought it might be useful to give a few useful tips.  Since I really don't know much about the subject, I did a quick Blog Search to discover at least 2 links that give more structured information that I will:

• http://www.mlmtalk.com/wp/make-the-most-of-networking-events/
• http://easyselfimprovement.com/255/how-to-make-the-most-out-of-a-business-networking-event-2/

My advice - learn to approach people you don't know and just introduce yourself.  Worst case, they just stare at you as if you've fallen from outerspace, but that usually doesn't happen.

Bottom line - we all need to attend these types of functions.  Some are better than others, some have better wine ;-)  but if you set a small goal of leaving with at least 2 new people that you've met, you're doing great.

Oh, and drink white wine... because in a crowded room, if somebody bumps into you, while you have that nice cab in hand, there goes your white shirt.

Israeli's are not Americans with funny accents

Israeli's are Israeli's. We speak pretty good English, dress in western clothes, embrace western culture (movies, music, Nike, etc.) but.... we are still Israeli.

Why is this important to the broader subject of this blog?  I spend a lot of time thinking about how to bridge some of the cultural gaps between Israel and the US.  One of the instances in which it becomes apparent goes back to working with US VC's.

Yesterday, I spoke with one of my colleagues on Sandhill about a portfolio company of Gemini.  The company is still very young, all ~8 employees in Israel currently.  Now, for a top tier US VC to invest, it's really a good idea to have the CEO and other Sr. decision makers close by, meaning in Silicon Valley.  That's a pretty well known fact, and makes a lot of sense.   In the seed phase of these companies, there is typically nothing in the US, but there could be if there needed to be.

That's the key point.  From my conversation, my colleague said that "he is very mindful that it’s their company, and they have a plan for how to make it succeed.  Has no aspiration to ask them to accommodate him". I truly respect that position.  However, is this not an example of yet another cultural divide?

With typical Israeli flexibility and adaptiveness, they would have no issue putting their Sr. Execs in Silicon Valley, to have an opportunity to work with such a great partner.  However, they didn't say that explicitly.  So - here's a pointer:

For the US VC: Israeli's are very accomodating, able to adjust and adapt their plans.  Don't hesitate to raise the point - they will never take offense.

Israeli's: Remember that it's not a given that you easily move from Plan A to Plan B.  It's just who we are and how we operate.

Networking- how to build and maintain yours

In the business world, we spend much of our time collecting OPC's (Other People's Business Cards).  Typically, they pile up on one's desk.  Most of us, find a way of putting at least the important ones into Outlook.  So, instead of piling up on your desk, they just digitally stack up there.

The problem that I'm looking to solve is how to best utilize this contact database?  How do you remember who you know, and how do you know who to approach when the right opportunity presents itself.  There must be solutions to this - it can't be I'm the only one trying to figure it out.

Theoretically, I realize that if I include additional information for every business card, there would simply be more information to search from.  But that requires a serious change in the way most people work.  LinkedIn seems to try and address this, but really, who has time to ask other people for intro's to their contacts.  And even that often finds its way into the anti-spam filters, so never reaches it's destination.

So, this blog entry, is actually a question back to those in the blogosphere.... any ideas? 

So, what next?

This afternoon, I met with an entrepreneur that just recently had a hugely successful exit.  Of course, he's already thinking about what to do next, and it doesn't include learning to fly, improving his swing, nor learning Mandarin.  He has all sorts of ideas, ranging from Communications to Internet, and even Medical Devices.

Of course, everybody seems to think that if you have domain expertise that has been developed over the past years, you now qualify as a bigger, more experienced expert in the field... you are "the" perfect entrepreneur in the eyes of the VC's.

But.... he doesn't want to do another semiconductor company.  Enough is enough.  You spend so many years of your life doing one thing, time to branch out, experience new things, "see the world".

There are some famous examples of people that have failed miserably moving from one domain to the next (e.g. John Sculley at Apple Computer), but at the same time, there are great success stories too.  Former Gemini entrepreneur, Nahum Sharfman, who was the co-founder of Commtouch ran National Semiconductor's design facility in Israel before starting Commtouch (-- and after he founded Shopping.com). Nahum holds a Ph.D. from Carnegie Mellon University in High Energy Nuclear Physics. I would bet, that his next gig, will be yet something entirely different.

So, what's the conclusion?  None really... as entrepreneurs always do, follow your heart.  We'll will be there to support you in whatever decision you make.  At the end, It's all about believing in the people.

What the xxxx is a bevel?

A few weeks ago, I arrived at the disturbing conclusion that there is no choice, I must learn Photoshop.  Having been a late adopter of digital photography (it's still not quite like film!), and after 2 years of experimenting with my DSLR, it just hit me.  Ansel Adams spent many cycles working on his negatives and prints in the dark room, so why should we expect to skip this phase with these new technologies?  The process hasn't disappeared - it's simply morphed.

So, how does one get started?  Simple - Adobe offers a 30 days free trial of their software.  Downloading software is a process I understand well.  However, I wasn't quite prepared for this one.  Download and install was very smooth, only, once installed, I could do nothing. I felt totally illiterate.  After getting some basic help from Jonathan, I strolled over to the nearest bookstore and bought a book on the subject.  I refused the "Photoshop for Dummies" variety (-- illiterate yes, dummy, not really) and opted for "The Missing Manual".  Let me tell you - there's a whole other world out there!

This post-processing task is still very new to me, and I currently estimate that it will take at least 12 months for me to get reasonable comfortable with it (and in the process, I will certainly need a better screen, more RAM and more CPU power than what my laptop currently has...), but it's just one of those things you "gotta do".

So, what is a bevel? It's a "style" that gives objects a more 3D look by making them appear raised from the page of embossed into it.

The Passover dilema

Passover.  One of the most important holidays in Israel; a week of eating matzah, visiting with family and friends, and for many, a nice long vacation (-- kids are off from school for ~3 weeks) - right?  Well.... for most people yes, however, not for the Israeli entrepreneur.

It's bad enough that here in the PST, we live 10 time zones away and that our work week doesn't overlap much. But, come holiday time, nobody really cares that it's a major holiday week in Israel.  A customer requires service, a design partner attention, and a strategic partner - well, anything that they need, I suppose they get pronto.

So, what can be done?  If kids aren't part of the equation, just take holidays whenever the customer markets take vacation (e.g. 2 weeks in December, 4th of July, Labor Day, etc.).  If they are, well, depending on their ages, they'll have plenty of time to "make up" the school work before entering college..... Otherwise, make sure you take your OGO or Blackberry, stay within cellphone reach and apologize in advance to your spouse and kids.  So is life.

Hag Sameach!

"How to"....

Last night, at 10PM PST, I joined a conference call for one of my portfolio companies.  On the line, we had 6 people, calling from 4 different locations: California (me), Belgium, Israel (the company) and India. We all dialed-in to a bridge, and used gotomeeting for the company's presentation. Everything worked beautifully, and hopefully, my company will have successfully secured a top rated design partner!

So, I thought that it might be worthwhile to put some "how to's" in this blog.  I am a firm believer in conferencing.  It's not the same as face-to-face, however, given the overhead in travel it's a very good alternative. In fact, many companies even use these technologies for sales calls within the same time zone.  Until video conferencing becomes mainstream (which I'm not quite sure it every will be), try these products.  BTW - a useful tool in figuring out the hours for these multi-timezone conferences http://www.timeanddate.com/.

Tough career choice

While preparing for dinner on friday with friends (BTW - both are Child Psychiatrists), a classic discussion developed between my girlfriend and myself, as she is poised with a difficult career decision.  My friend, "Ann", is moving back to Israel after having spent a couple of years at Stanford.  Ann was offered a "no-brainer" position with a hospital in Israel upon her return, only 1 problem: it's more than an hours drive away from her home, with odd hours and huge responsibility.  From a career perspective, it's a dream job.  However, with 3 boys (-- yes, she too has 3 boys, almost at the same ages as mine), it will significantly impact her ability to spend time with them.

My first reaction was a four letter word.  Why?  Because, if "she" was a "he", it wouldn't be up for discussion.  However, as "she" is a "she", we started to analyze the pro's and con's. If you take the job, it's a major step forward in your career from all aspects.  At the same time, you will suffer greatly from a life style and your kids will see much less of you than you'd like.  The outcome of that is guilt. Say "no" to this position, you feel that you've ripped yourself off of what you have earned and will always regret this choice. Your kids will see more of you, but perhaps if you're just frustrated (and it always shows), they'd be better off if without you.  Basically, no win.

Fortunately, as a Psychiatrist, I'm sure Ann will find a good one to help her with therapy post either decision she makes.  Good Luck!

Technology M&A and Israel

The CICC , in cooperation with JMP Securities and Pillsbury Winthrop, hosted a "Technology M&A and Israel" event this morning.   It's definately a hot topic.... in fact, yesterday PMC Sierra announced it's acquisition of Israeli chip company Passave for $300M.  I wanted to share some speaker comments (see bottom for list of speakers), which I found particularly interesting.

• When is the right time to start thinking about M&A? When you start your company.
• However, focus on building a business - don't think of yourself as an acquisition target. 
• Best way to attract an acquiror is via joint business success. Both companies work together, have joint customers, get to know each other... there is no better way.
• The business units of the company are the best target for acquisition.  There is little value in coming with a banker to the corp dev group asking if they want to acquire you. (-- although I'm sure the bankers have an opinion on that subject).  Form commercial relationships first.
• Companies prefer to acquire start-ups in the early stage of the adoption cycle.

Comments relating to what does an acquiror look for (other than synergy of the products):

• High levels of innovation
• Quality and cohesiveness of the team
• IP cleanliness meaning, all IP belonging to the company, no royalty payments of any form (-- e.g. universities), no "strings attached" (e.g. Israeli Law of R&D.... to be discussed in a future blog)
• Cultural fit between organizations
• Can they use Israel as a spring board to manage R&D in India? 

Deal terms to be sensitive to:

• Acceleration of options upon M&A - many companies will require all employees to waive this, even if it is part of the agreements.  A key to succesful acquisition is retention of employees, as such, acceleration must go.
• Fancy liquidation preferences.  Companies will renogotiate what is deemed as "unfair" liquidation preferences, as they want to see redistribution of the proceeds in a way that benefits the employees as well as the preferred shareholders.

Once again - CICC brought very high quality speakers who discussed what is really a very important topic in the lives of our Israeli start-ups.  Shuly and Iris - keep up the good work!

Speakers

Kevin McClelland-- Managing Director, JMP Securities
Hildy Shandell--VP of Corporate Development, Broadcom Corporation
Ned Hooper--VP Corporate Business Development, Cisco Systems
Yaniv Vakrat, Ph.D.--Director of Corporate Development, Adobe
Dan Avida--General Partner, Opus Capital
Lior Nuchi--Partner, Pillsbury Winthrop Shaw Pittman
Gil Livnah--Sheppard Mullin Richter & Hampton, CICC Board Member

Is this Seattle or Silicon Valley?

This is certainly beyond the "focus" of this blog, but I feel I have to mention it..... Here in Silicon  Valley, we're used to sunny skies, outdoor hiking and a smooth drive (usually) up to Tahoe for ski season.  Not this year!  It feels like Seattle - it just doesn't stop raining!  It does, however, make more dramatic picture taking opportunities... see dark skies in my photo of Pigeon Point Lighthouse from Saturday.