Tuesday, August 23, 2005

VC -->Breakfast with Warren Weiss

I met with Warren Weiss of Foundation Capital this morning at Mike's Cafe in Menlo Park. I had french toast and it was tastey. Mr. Weiss's firm emphasizes operational experience and Mr. Weiss has run several public companies. Foundation is currently working on a $595 million fund, raised in 2001. He calls venture capital a "CEO Detox Program" because the best VCs supposedly come out of management.

The firm has recently pushed into cleantech, even though most of the people investing in the sector these days seem to be untested VCs. One of the underlying currents of all the companies they have seems to be taking the idea of a network and pushing it to nontraditional applications. A word on the firm's companies and what they're doing:

Silver Spring Networks -- has partnered with GE to provide a Tivoli-like network management system and software for the utilities such as electricity delivery. It has developed a lot of IP around radio networking for these applications.

EnerNoc -- I've written about this company before. The basic idea? Regulate energy supply and demand to allow big-box stores and other power consumers to give electricity production or capacity back to the grid when it is needed somewhere else. I know this sounds a lot like Enron, but it's more about providing information to potential producers about current market demand for power. "There's plenty of power out there, you just have to find it," Mr. Weiss said. "Chips, bandwidth, storage, all gets cheaper. In fact, there's even free software out there that's not too bad." Energy, on the other hand has been getting more expensive.

Dust Networks – An RH 100 company. Mesh networking for communications between sensors in buildings. Modern buildings monitor lots of things, such as temperature, and those sensors are wired through the building to a control center. Imagine the cost of wiring a new building, or retrofitting an old one. In-Q-Tel is also in on the deal.

Novazone -- The company has figured out how to use Ozone (O3) to purify water and disinfect fruit and vegetables. The company sells not only the gas, but software to control the release and flow of Ozone for different applications. Mr. Weiss got wind of the deal via the Keiretsu Forum.

SiBeam -- Makes chips for short-distance communications between laptops and projectors, for example.

Sensicore -- Water testing and monitoring delivered via a distributed network. Again, I’ve written about it before.

Some other quick thoughts: Podcasting might make a lot of sense as a collaboration tool within enterprises. Why should patients have to put up with a mess of wires when they need to be monitored at hospitals. Foundation has not only an Entrepreneur in Residence program, but also a tech swap deal with HP Labs. Mr. Weiss has been working with Dick Lampman there.

Foundation was behind the sale of Peribit to Juniper. Juniper paid $380 million and Peribit had $40 million in 12-month trailing revenue. Mr. Weiss doesn't think Juniper paid too much, citing the fact that Peribit was doubling revenue at the time it was bought.


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