Sandell talks about what he learned about business from rowing, becoming a venture capitalist, and investing in the innovation economy from life sciences, biotechnology and medical devices to IT, including everything from semiconductors to consumer internet.
We see a pretty wide swath of what’s happening. And what’s clearly the case is that there is more positive innovation cycles now than at any time in my 20 years in venture capital or even my 30 years in the technology industry overall. It’s a very, very exciting time.
I think there are some fundamental technology changes which are benefiting lots and lots of different kinds of businesses–obviously, in the information technology side with the ability to process information and to compute things more and more cheaply all the time. Moore’s law is alive and well and has been since the ‘60s.
Sandell’s former rowing coach at Dartmouth writes a book about the team after their 25-year reunion. Working In Sync features a separate chapter on each of the team’s athletes and how rowing helped them achieve professional success. Sandell:
I think it’s the ultimate team sport. If somebody leans out of the boat two inches in the wrong direction, it tips the boat over or upsets the balance enough that it can create a boat-stopping event. There’s not very much room for the oars to move above the water, and the boat has to be perfectly balanced to create enough space for everyone to get their oar out of the water, and then move it to the position from the finish back to the catch. So it’s the ultimate team sport.
Applied Micro Circuits Corp. agrees to buy 3Ware for $150 million cash, to expand its storage-system product line.
NEA adds more funds in the second round. Sandell:
As one of the early investors in 3ware, we’ve witnessed first-hand the exponential growth and demand for the company’s fundamentally new storage solution. The most compelling advantage of 3ware’s next-generation product is that it leverages a company’s existing Ethernet infrastructure
Sandell is profiled for the LA Times, which sends a staff writer to follow him to meetings with internet CEOs, investment bankers, engineers, and other people looking to get in on deals. His day starts at 8 a.m. at the NEA office on Sand Hill Rd., followed by meetings in Italian restaurants, the NEA boardroom, and assessing an internal pitch by an NEA staffer looking for funding for his own venture, finally ending at 11 p.m. He describes the job:
Sometimes it’s overwhelming. But it never fails to be interesting
Sandell makes a $5 million early-stage investment in NetIQ for NEA. By mid-2000, it is reported to be worth $116 million.
In order to keep my job, I figured I had to turn $10 million into $40 million.
Sandell makes an investment in the seed funding round.
Sandell passes on Vignette after he and the CEO take turns missing meetings. The publishing workflow software provider gets $3.5 million from Austin Ventures, Sigma Partners and CNET in the seed round, $10 million from Adobe Ventures L.P., Attractor Investment Management, and Charles River Ventures in the second round, and $14.3 million in the third round from Goldman Sachs private investment funds, Hambrecht & Quist, and Amerindo.
Sandell joins the venture capital firm after he prepares a business plan for a company that wants venture funding.
I ended up at NEA in January of 1995 just as things were getting started in terms of the internet revolution.
Sandell leaves the company:
I then went back to Microsoft for a while after graduating, but, ultimately, came back to the valley since my wife, then girlfriend and former Stanford classmate, got her dream job in Menlo Park. So I came back. We got married.
Sandell joins Microsoft full-time as product manager, and continues to work on Windows 95.
Sandell enters the MBA program at Stanford’s Graduate School of Business.
Sandell joins the Palo Alto startup and is sent to London to open the sales office there. It eventually covers eight European countries and the company goes public on NASDAQ.
I had sold fertilizer for the boy scouts, if that’s what you mean. I was selling software for currency interest rate swap traders in international banks. I didn’t know anything about currency interest rates swap trading. I’d never sold anything professionally. And I’d never been in a start-up and it had no venture capital… So if I didn’t sell something, people didn’t get paid. It was a high-stakes job to say the least. I was living in a foreign country on the first day that I took the job, which had its own set of challenges. But it was a great adventure
Sandell works for the management consulting firm after graduating Dartmouth.
I wanted to be in business somewhere, somehow, and I just didn’t know what business I wanted to be in. One of my professors recommended that I try management consulting as a way to learn about the industry or businesses I might want to choose. I went to the Boston Consulting Group in Boston and was there for about two-and-a-half years.
Sandell attends Dartmouth, where he studies for a Bachelor of Arts in Engineering Sciences. He is involved with the school’s rowing team, and says the lessons he learned help him in later life:
Due to an injury, I ended up being a coach as well, which I think was probably my first glimmer into what it’s like to be a venture capitalist. Because I view us as coaches of entrepreneurs and partners of entrepreneurs, and that’s what coaches are for athletes.
Sandell works a ‘summer job’ at Microsoft between years at Stanford.
I ended up in the Windows group just as Windows was taking off. My summer job was to write what’s called the MRD, which is the Market Requirements Document, which is what you do when you’re first setting out to create a new product. I wrote the MRD for what became Windows 95 as my summer job.