As the new president of Intel Capital, John Miner is one of the most important venture capitalists in the world. Last year Intel Capital was the most active technology venture investor in the United States, if not the world.
As successor to Intel Capital founder Les Vadasz, Miner will oversee a portfolio of more than 475 technology plays, with an approximate value of $870 million. The group’s investments derive from two separate funds created in 1999 by Intel Capital-the $500 million Intel Communications Fund (all sourced from within Intel) and the $253 million Intel 64 Fund, which includes money from other corporate sponsors.
Miner, 48, is no newbie, however. He joined Intel in 1983 and was elected Intel corporate vice president in 1996. Over the years, he has managed Intel’s communications products, server products, and desktop motherboard and PC building blocks businesses. He was named vice president and general manager of Intel Capital last year, before his ascension to the top of the venture group.
Miner’s promotion, announced on April 17, follows a little-noticed organizational change last year, when the business group that Miner ran was combined with Intel Capital. That brought Miner’s internal-looking business development group together with Vadasz’s outward-looking investment group. Asked about further organizational changes he may make as president, Miner says: “Organizations are organic, always evolving.”
Miner says no changes are on the horizon for Intel Capital and that the group will continue to invest through its four-channel strategy in amounts from $1 million to $10 million.
But there is one significant change, away from the group’s strict adherence to co-investing with other venture firms. “There are times that we will consider leading now where we haven’t in the past,” he says. “That is, if we see a technology that
we believe is really important to our interest and we need to lead or go it alone to get it to an investable stage by others. But the goal would be as quickly as possible to get it to that stage where it is investable by others, because we see what our value-added is.”
A fine distinction, but an important one at a time when IT investing by venture firms has slowed. Also a stark contrast to a recent position taken by Claude Leglise, Intel Capital’s vice president of Worldwide Geographies. “In cases where we could not find co-investors that were willing to put in the money, we could have perhaps invested all of it ourselves, but that would get us involved too closely in the ownership and management of the companies we invested in,” Leglise said in a recent interview with InfoWorld magazine.
An Intel spokesperson says that there is no policy change implicit in Miner’s comment and that Intel Capital has made such investments in the past. But in two recent interviews, both Miner and Vadasz were clearly frustrated that early-stage VC firms are moving too slowly.
One way to interpret Miner’s comment is that Intel will be turning up the heat when its traditional VC partners do not move fast enough. That’s a bold stance, given the footnote in Intel Corp.’s most recent quarterly financial filing (April 15). It says, in part, that “gains or losses from equity investments and interest and other in the second quarter are expected to be a net loss of $20 million due to the expectation of a net loss on equity investments of approximately $60 million, primarily as a result of impairment charges on private equity investments.”
Asked if Intel Capital will continue to have the support of its parent corporation in light of the private equity losses, Miner says flatly: “Yes, we will, more so than ever. As Craig Barrett would say: The four pillars of Intel’s strategy are manufacturing, architecture, branding, and investments.’ We are an essential part of getting the whole mix complete.”
Miner does not want to leave the impression that he has lost faith in venture firms. It’s just the opposite. “We co-invest in virtually all of our deals,” he says. “We have a symbiotic relationship with the venture capital industry. We rely upon them to provide governance and operational support of the startup companies and to build their management teams. We bring a global rolodex of customer and alliance opportunities [to investments]. That is a combination of ingredients that will stay fairly steady.”
Do not expect to see any change in Intel Capital’s investment strategy. Miner says it continues to be four key areas: “ecosystems,” “market development,” “gap fillers,” and “eyes and ears.” He describes those areas, respectively, as technologies that support the final products in which Intel’s technology is used (like enterprise software); companies that help accelerate the adoption of technology in emerging markets (like Star Media Networks in Latin America); companies that sell technology that Intel needs to help market or produce its products (like semiconductor equipment companies); and emerging technologies that might be useful in three to five years.
Given Intel’s presence throughout the world, in terms of manufacturing and sales and marketing, one would expect it to have a global outlook into technology investing. True, says Miner, and that will continue to be a major thrust. “Very large growth opportunities for the corporation lie outside the domestic borders. Some 6 billion people live in the world and only 300 million live in the United States. Our vision in the long run is that they will all buy computers and use Intel processors, making emerging economies and emerging markets important. For example, China, India, Russia and Latin America are all areas where we have investment activities to align with our growth strategies.”
As for any potential changes in overall strategy or approach, Miner says his No. 1 goal is to “make sure that we bring the absolute best of external technologies innovation to bear upon [Intel’s] initiatives.” His second goal is to “make sure that we benefit from our global presence in terms of developing our perspective on trends.” In other words: Take advantage of Intel Corp.’s global outlook on technology.
Miner will continue to be based in Hillsboro, Ore., where more than half of Intel Capital management is based. He commute between Hillsboro and Intel’s corporate headquarters in Santa Clara, Calif., while he manages the 300-plus staff of Intel Capital.