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Who is Don Valentine?
Don Valentine passed away in 2019.
Here is his profile:
- Founder of Sequoia Capital, founded Sequoia Capital in 1972.
- The father of Silicon Valley Capital industry.
- He has served as sales director at Fairchild Semiconductor (ticker: ON) and National Semiconductor (ticker: TXN).
- He has invested in many technology companies, including Apple (ticker: AAPL), Yahoo, Atari, C-Cube (ticker: CUBE), Cisco (ticker: CSCO), Electronic Arts (ticker: EA) ), Linear Technology (ticker: ADI), LSI Logic (ticker: LSI), Microchip (ticker: MCHP), NetApp (ticker: NTAP), Oracle ( ticker: ORCL), PMC-Sierra (ticker: PMCS), etc.
Just looking at these experience. He sould be highly respected.
Godfather of semiconductor investment
In the early 1970s, the Santa Clara Valley was home to many semiconductor companies and the early computer companies that powered their chips. In this regard, the keen Valentine made an interesting point: Semiconductors are the core. He believes that this industry is the basic business of the digital revolution. According to Valentine’s estimate in 2004, Sequoia has provided services to about 600 different companies. companies have provided financing, about 40 of which are semiconductor companies. Semiconductors have become an important factor in his investment decisions.
Valentine’s investment philosophy
Valentine has a famous saying that is regarded as a guideline by the venture capital industry: “It is better to invest in a company with huge market demand than to invest in a company that needs to create market demand.” That is to say, bet on the track, not the players in the competition.
Valentin said: “It is better to invest in a company that has a huge demand market than to invest in a company that has to create demand.” Although Valentine’s statement may seem obvious at first, he believes that large new markets are not Rather than being created organically by startups, startups ride on market waves. It is the job of venture capital firms to identify the best startups to ride this wave.
Valentine’s method can be called “Sequential Market Recognition Pattern”. In this model, Valentine leverages proprietary domain knowledge to identify the first large new market. He then uses practical logic related to the impact of the first market to identify the large markets that will subsequently develop.
In essence, Valentine systematically identifies the resulting markets whose growth will be driven by the initial market, either in the form of supply inputs required by the initial market or in the form of new demand driven by the initial market. Valentine then identifies the companies best positioned to capitalize on these shifts and invests in them first.
Application of his investment philosophy
A typical application of Valentine’s investment philosophy model is to determine the computer memory and storage market. Based on the understanding of the demand for personal computers, Valentine realized that the computer’s ability to store data is still limited, and also understood that computers need more memory. and storage space to meet user needs, so he started looking for storage companies everywhere.
“It was clear that Apple needed a different storage system,” Valentine said. “Sequoia funded Jugi Tandon to work on small 5-inch disk drives, and personal computers at the time needed a smaller drive.” Tape is a faster, more reliable, denser solution, so we funded Tandon. It’s a fantastic investment.” Subsequent developments proved his judgment correct, and Tandon became a pioneer in the personal computer disk drive industry.
Ethernet and Internet infrastructure (especially routers) are another successful application of the sequential market recognition pattern. By the late 1980s, through successful investments in the personal computer industry, Valentine discovered the potential of the Internet and the resulting need for Internet infrastructure to enable computers to communicate and exploit the full potential of the network.
Under Valentine’s leadership, Sequoia began exploring network infrastructure investments in switching, routers and Ethernet technologies. This exploration led to investments in 3Com and Cisco. 3Com was eventually acquired by Hewlett-Packard (ticker: HPQ) in 2009 for $2.7 billion. Cisco also grew into one of the most valuable technology companies in history, and today Its market value has reached approximately US$200 billion.
Recognizes a hero before anyone
He has read countless people and once said that he has only met two entrepreneurs with superhuman insights in his life–Robert Noyce of Intel and Steve Jobs of Apple.
Wilfred Corrigan, who was the CEO of LSI Logic at the time, once introduced Valentine to a young man who had worked at LSI. He said to Valentine: “I’m going to send a child to you.” There, he’s one of my best employees and I don’t know what he’s going to do, but give him the money.”
The young man who had just turned 30 was not good at marketing at the time, but in Corrigan’s favor, Valentine still invested a sum of money in him and said viciously: “If you lose my money, If you don’t, I’ll kill you.”
The young man’s name is Nvidia(ticker: NVDA)’s Jensen Huang.
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