Give Him a Break, He’s Earned It and How –

If it’s June, Les Vadasz is sleeping in.

Vadasz retired on the 1st of the month as president of Intel Capital and executive vice president of Intel Corp. His grandiose plan for the first day of his retirement? “Oh, I was hoping you don’t ask that!” he says with his trademark Hungarian accent. “The first thing I’m going to do is sleep in.” Till noon or more like 9 a.m.? “About 9. At least 8:30.” His infectious laugh punctuates the sentence.

For a guy who spent more than half his life helping to build Intel into the largest semiconductor maker in the world and had a major impact on the venture capital industry, Vadasz isn’t overly emotional about his farewell. “It comes bit by bit. It wasn’t sudden,” he explains. “That’s one of the things we’ve done at Intel quite a bit is transitions. You learn to condition yourself, so by the time May 6 comes about and there are only 20-something days left, you’re looking forward to the last day. Not because you are running from something. It’s time.”

After 35 years, it’s time.

Back in 1968, a 31-year-old Vadasz left Fairchild Semiconductor with two members of the “Traitorous Eight,” Gordon Moore and Robert Noyce, to start something new-Intel. Like Moore and Noyce, his role in the company was instrumental. He led both of the engineering teams that introduced Intel’s first successful product, a DRAM, and the world’s first commercially viable microprocessor.

An EE by training, Vadasz moved up quickly through the management ranks and was ultimately named to Intel’s board of directors in 1988, a position he held until last year. For the venture capital community, Vadasz will most likely be remembered for founding Intel Capital in 1991 and turning it into one of, if not the most prolific venture capital investors in the world.

For an institutional venture firm, there may be no bigger stamp of approval for a portfolio company than a co-investment by Intel Capital. With its massive size and influence, Intel has the ability to speed the adoption of technology. It was an early proponent of Wi-Fi, for example, a technology that is quickly gaining ground. Vadasz remains one of Wi-Fi’s biggest champions. Under his stewardship, Intel Capital invested in about a dozen Wi-Fi companies, from chipmakers to service providers.

Overall, the venture unit has invested in more than 1,000 tech companies scattered across 30 countries. Last year alone it pumped $200 million into 100 companies it believes will have strategic importance to Intel’s hardware, software and services businesses.

As much as he loves venture capital, Vadasz says he has no plans to join an institutional venture firm or make investments, except for some incidental angel deals. Instead, he plans to “mentor some bright young companies. This profession has been very good to me and I look forward to giving back some now.”

Before he said goodbye to his friends and colleagues, Vadasz made time to speak to Venture Capital Journal about a variety of topics, from what’s wrong with VC today to what newly minted VCs should know to his legacy at Intel Capital.

VCJ: Why did you decide to retire, because you reached mandatory retirement age?

Vadasz: My mandatory retirement was a year ago. I wanted to retire at a time when I could still remember my name [laugh] … and other people’s names. And I feel very current and wanted to do it when I felt this way. I’ve been working on a transition plan for quite a while. The major event occurred last September when we combined our internal and external investment activities and John Miner joined me in leading Intel Capital.

What will you miss most about Intel Capital?

Well, I know it may sound trite, but Intel is a unique company. They have been able to do things that virtually no one else has ever succeeded on, time after time after time after time. And I think that takes hard-hitting interaction between some very good people. That part won’t be replaced with anything. It’s just going to be a cherished memory. … It’s not Intel Capital, per se. It’s Intel, because Intel Capital works in a very integrated manner with the rest of Intel.

What won’t you miss about your job?

Getting up at 6 o’clock in the morning or maybe 5 for an early morning meeting. Traveling, hitting eight cities in 12 days.

You said you have no plans to do VC after you retire. Why, are you tired of it?

No, not at all. I love technology. I spent 40-some years of my career at this intersection of new technology and new business. It’s a very interesting subject for me, but I think that my involvement with some young people who want to create something like that [at a startup] or working in a board capacity will be more interesting than some of the overhead associated with being a VC. The notion that I would want to go out and do fund-raising, I find absolutely abhorrent [laugh].

Especially in this market.

In any market [laugh]. If I invest any money it will be my own. I have zero interest in worrying about other people’s money.

Will you do some angel investing?

I might, but don’t make a headline out of it. If I do it, it will probably be incidental.

What’s your advice to those who remain in the venture business at a difficult time like this?

A couple of things. Look at the fundamentals. The best example of that is our communications business. It’s a disaster, but at the same time when you look at the fundamentals you know that the communications infrastructure around the world will have to be rebuilt. That’s a huge opportunity. The other thing is to look at building something of value rather than how long it takes to IPO. If there’s a third one, it’s that corporate venture capital has evolved to be a significant element of the total, and I think that institutional venture firms benefit quite a bit from having the right relationships with corporations Those relationships can, at a minimum, reduce the risk [for a startup], and, at best, really help propel a company forward.

What’s your advice to young or new VCs?

Get an operational job. Learn what it takes to create a business, then worry about becoming a VC. I really believe that if you want to be a VC, you have to bring that kind of value or experience to the party. It’s more than money. The only way to get that experience is to go through it. You don’t learn it in school. You learn some wonderful fundamentals in school.

What’s your biggest concern about the venture business and where it’s going?

I think the venture business is shy, not taking enough risk right now, focusing too much on past investments and not focusing enough on the new. And I’m worried about that. The positive thing that I’ve learned about venture capital is that it can really impact taking new technology to the marketplace. And when you withdraw that [source of funding], you delay those new technologies making an impact on the marketplace. If you look at the overall numbers being invested they’re continuing to go down, and it’s a very disconcerting situation.

Will VC pick up when economy picks up?

It will probably pick up, but it’s kind of insanity right now. You are supposed to invest ahead of the market. You don’t invest at the peak. It takes years for these companies to become something. Technology will not stop. So, three or four years from now, whether the market is off right now is not very significant.

You were on Intel’s board, but John Miner isn’t. Does that handicap Intel Capital at all?

I don’t think so. Over the years, Intel boards have been very supportive of this effort and continue to be. I don’t expect that to be any different in the future. It is an activity that is institutionalized, and that’s one of the things I should be proud of. It’s good machinery. It’s not depending on one person. We have some wonderful people who guide the various activities-international under Claude Leglise, communications under Mark Christenson, computing under Scott Darling. It’s an organization.

You made yourself replaceable.

That’s right. That was part of the job. You wanted to get a transition structure in place so that the machine continues to go on, and the principles of the operation are established and institutionalized, not stuck in the head of one person.

The local paper reported that you sold some stock. Are you planning on making a big purchase for retirement?

No, no, no. The problem is that you get stock options that expire at a certain time and you have to exercise them. And because of insider trading rules, you have to do it in a very narrow window. So as soon as the window opened, I exercised my things and I’m done.

So you’re not planning to buy an island?

For $7 million, it’s a very small island [laugh]. I wouldn’t be very satisfied with the small island that the money would buy.