Gaule: Introduce yourself and New Venture Partners (NVP). Socolof: I am one of the managing partners of NVP, a venture capital frm focusing on corporate spin-outs. I am a founder, a member of the investment committee, and I lead deals in a broad range of areas from semiconductors to networking technologies to consumer products and medical devices. We were a venture incubator for Bell Labs within Lucent Technologies from 1996-2001. In 2001, with the challenges facing the telecoms industry, we spun ourselves out of Lucent to form an independent venture frm. We focused on investing in technology-based opportunities developed inside corporations that decide the opportunity is better pursued as an independent venture. Gaule: Give us a brief overview of the people in the team and the organisations you work with. Socolof: Our original team is still based in New Jersey, just across the street from the Alcatel-Lucent North American headquarters (Lucent merged with Alcatel in 2006). In 2003, we concluded a transaction in which we took over the activities of Brightstar, a corporate incubator for BT Labs. Two of the leaders of that organisation joined our team and became our partners. Subsequently, we added a venture partner in the Netherlands, and a couple of partners in the US. Gaule: Why would organisations focus on your approach to spin-outs? Socolof: There are three basic reasons corporations do spin-outs. The frst is strategic. For example, they have developed a component or technology or software that they want to use as part of a solution for their customers, but they recognise it as an enabling rather than strategic technology and realise it would scale more competitively as an independent venture with other investors and customers. Second, visionary managers understand that nurturing the innovative health of their labs or their businesses may result in the development of interesting opportunities that fall outside the focused business interests of the parent. Rather than force the opportunity on to the shelf, they allow the team to take it outside and develop it separately. Third, the corporation may just be interested in the fnancial return from a business opportunity that does not fit their current priorities. Gaule: What is your view of current market conditions for starting a new venture or creating spin-outs? Socolof: On the supportive side, we seem to have reached an infection point in the technology that supports personal and business networking and its adoption by users. As a result, there has been a tremendous…
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Gaule’s Question Time: Stephen Socolof, NVP
Sep 13, 2012 • Andrew Gaule
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