FORT MYERS, Fla. – Manny Fernandez, a managing director at SI Ventures, the venture capital affiliate of Gartner, a technology research firm, has been a venture capitalist for almost ten years, but still considers himself to be an entrepreneur at heart.
“One paramount thing to know [is that] I am not your typical VC guy,” he says. “I am one of them,” he said, referring to entrepreneurs. Early in his career, Fernandez held executive positions at Dataquest Inc., an information services company, Gavilan Computer Corp., a laptop computer manufacturer, and Zilog Inc., a semiconductor manufacturing company.
Fernandez has gone through every part of the process of building a company – creating, developing, selling, taking public – and he hopes that he is looked at by the entrepreneurs running his portfolio companies as a resource and a friend, he said. “I’ve been an entrepreneur all my life,” he says. “That’s my game.”
Fernandez looks for management teams who understand the market well and have the technology backgrounds to pull off a technology-based investment, he said. He seeks out people with open minds who can take advice and work alongside the SI Ventures investors, he says.
“As we enter the next era of VC, we are going back to the past in many ways,” he said. Companies need good business plans and need to execute them and “hiring operational experience at the partner level is necessary to help entrepreneurs reach their goals.”
The firm’s three managing directors all have more than 20 years of operational experience. Fernandez, the technologist of the group, joined Gartner as chief executive officer and president in 1991. N. Adam Rin focuses on software, while John Halligan joined the firm after 22 years of financial management at General Electric Co. and is the chief financial officer at Gartner.
The firm’s relationship with Gartner also helps to set it apart from other VC groups, Fernandez said. SI Ventures has access to Gartner analysts, who help with deal flow and provide in-depth as well as brief assessments of the market for the investors. Additionally, Gartner is an investor in SI Venture funds, he says.
Fernandez says he is away from home about 14 out of every 20 working days. He spends about 10% to 15% of his time generating deal flow, 20% to 25% conducting due diligence and the remaining time on the operational side of the business, working with portfolio companies.
Fernandez is chairman of the board of Gartner, and serves on the boards of directors of Brunswick Corp., The Black and Decker Corp., Net Numbers, Healnix, techies.com Inc., eAngler, Click Commerce Inc. and WarrantyCheck.com Inc. He also volunteers with his college alma mater serving on the University of Florida’s Foundation Board.
SI Ventures expects to start raising its latest vehicle, the $350 million to $450 million-targeted SI Ventures III in December, Fernandez says. The firm backs information technology and communications infrastructure companies that enable e-businesses, with initial investments that range between $3 million and $6 million. The firm’s previous vehicle, the $120 million SI Ventures II, which closed in June 1999, is about 50% invested in some 23 companies, he says.
The firm targets companies throughout the U.S., but tries to limit investments in Silicon Valley, Fernandez said. By not investing in the 408, 415 and 650 area codes that comprise the Silicon Valley area – San Francisco, San Jose and Palo Alto – the firm gets to see other deals, he said. Fernandez does tout the area, however, explaining that he had lived there, his friends are there and the firm has made a couple of investments in the region.
“We believe operationally, most companies we are dealing with will have to go global,” Fernandez says. With that in mind, the firm works to establish connections with international limited partners who will be able to assist when portfolio companies transition abroad, he says. CDC in France, and Aspen Investors in London, in addition to a couple of smaller investors in France, are among the firm’s international limited partners.