LOS ANGELES – Alcatel Ventures added Jeff Stevenson, a former senior vice president of sales at RealNames Corp., as a partner to head the firm’s new Silicon Valley office, said Steve Kim, managing partner. The move came in advance of a planned early August final close for its $150 million-targeted freshman vehicle, Alcatel Ventures.
Alcatel Ventures hired Stevenson because the firm, which is based in Los Angeles, did not want to miss any opportunities in the Silicon Valley and the San Francisco Bay Area, Kim said. “Still, the most activity is in the Bay Area and we don’t want to miss deals because we did not have someone there. We needed to have someone there to network; to be able to find opportunities for us,” he added.
The firm will primarily back seed- to early-stage technology companies, said David Fogelsong, general partner. “We are product focused…we will be looking for hardware and software opportunities in the wireless technology, computer networking, optical networking, telecom infrastructure and semi-conductor chips industries,” he said. While the firm will be opportunistic in terms of its investment strategy, it will do most of its deals on the West Coast, Kim added.
The firm’s freshman vehicle, which had raised $120 million by mid-July, will back about 50 to 60 companies, Kim said. He anticipated the fund’s average deal size would be approximately $2 million. To date, the fund had already done 22 deals for $31.6 million. The firm is named for Alcatel, the French telecommunications company, which invested $60 million in the vehicle and is its largest limited partner. “Alcatel never had a VC arm, so they want us to carry their name now because they are our biggest LP. From our side, it is a great name to carry, because there are so many VCs out there, this helps make us recognizable,” Kim added. The balance of the vehicle’s LPs are high-net-worth individuals, he said.
Alcatel knows Kim well. In March 1999, Alcatel acquired Xylan Corp., a networking company Kim co-founded in 1993. Following the acquisition Kim left the telecom giant, founding Alcatel Ventures in August 1999.
Stevenson comes to Alcatel Ventures with a wealth of experience at start-up companies. Prior to his 14-month stint at RealNames, an Internet infrastructure company, Stevenson spent 1998 as director of business development at International Network Services, a network consulting provider, which is now part of Lucent Technologies. Stevenson was also one of the first 100 employees of Netscape Communications Corp., now a subsidiary of America Online Inc., where he managed strategic relationships with Hewlett-Packard Co. and IBM Corp. Before that he held executive and senior engineering positions with NetManage Inc., a information technology systems solutions provider, from 1993 to 1995.
Stevenson’s main responsibility will be to generate deal flow for Alcatel Ventures, Kim said. “He is responsible for Silicon Valley and the Bay Area, as if he were a regional sales manager. He has to find us deals there,” he noted.
Kim said Stevenson’s background – an engineer by training and his experience with start-up companies – made him the perfect fit for the firm. “We are looking for technology companies, so we wanted someone with an engineering background and we wanted someone with start-up experience, because otherwise, how do they know what it takes to help grow a small company?”
Stevenson said he decided to jump to VC because he wanted a career change that would allow him to get back to technology. “This is a good way to see new technology and work with it. This is a good move for me to get back to my roots,” he added. “It also will provide me with the opportunity to give something back to other entrepreneurs.”
Stevenson said identifying promising deals should be a similar process to the one he employed when he was identifying what start-up he wanted to work at next. “I picked companies to work at the way VCs do; I looked for the hot new technology, barriers to entry and the potential for that company’s growth. Now I will use these same criteria to pick investments,” he said.