Welcome to The Pitch, a new weekly Q&A feature that puts top Silicon Valley tech investors under the spotlight and gets them chatting about what kinds of deals they're looking for -- and the common pitfalls that can trap entrepreneurs.
First in the lineup is Paul Santinelli of North Bridge Venture Partners, who founded enterprise systems management startup NOCpulse and sold it to Red Hat in 2002. He joined North Bridge three years later.
Q HOW'D YOU GET INTO THIS RACKET?
A I was lured to the darkside. As an entrepreneur, there was always some mystique to the venture business, how it operates, how the players became players. But once you get to this side, you start to ask yourself, "What did I do? Is Darth Vader really my father?"
Q WHAT DO YOU LIKE ABOUT VENTURE CAPITAL?
A Working with founders and building from the ground up is what I live to do. It's fun to work with sharp people and build companies that might change the world.
Q WHAT KINDS OF PITCHES ARE YOU LOOKING FOR RIGHT NOW?
A I've always been focused on infrastructure -- networking, systems, storage, etc. It's not the sexiest part of the industry, but without scale and performant infrastructure for Web applications and online gaming, we might still be playing nothing more than Space Invaders on an Atari.
Q WHAT'S THE BIGGEST MISTAKE ENTREPRENEURS MAKE?
A Having been an entrepreneur in the first bubble, I can speak from experience: Not determining if there's a real business to be built. As a founder, I was always enamored with what we were building and why it was "exactly" what the doctor ordered. Had I listened to our first VP of Sales and realized, "Hey, the market doesn't want X, they want Y and are willing to pay for it," I might have been able to move faster to a more acceptable solution.
Q WHAT'S THE NEXT BIG THING GOING TO BE?
A Good question. I've been investing on two specific themes: One, data consumption and data access are growing exponentially year over year. That means processing, storing and retrieving that data in an efficient way is going to critical.
And two, software is going to drive more of what hardware was designed to accomplish. Software is becoming the cerebral cortex of networking and systems. The days of purpose-built hardware -- routers, switches and other things that require specialty silicon -- will be put on hold until we reach a point where Intel (INTC) processors can't process instructions fast enough to do the job. So, the battle will be for more intelligent, efficient software.
Q NORTHBRIDGE RECENTLY MOVED FROM SAN MATEO, WHERE THERE ARE FEW VC FIRMS, TO PALO ALTO, WHICH IS INCREASINGLY INUNDATED. HOW COME?
A Serendipity really drove the decision. There's something to be said for walking through downtown Palo Alto and running into someone starting a project or wanting to connect on an idea. Since we moved into our new space on Hamilton Ave., our ability to connect with founders, peers and investing partners has increased tremendously.
Q YOU'RE A MUSICIAN, AND IT SEEMS A LOT OF OTHER VCS ARE TOO. WHY IS THAT?
A "Creative outlet" is probably the best answer. Some people like fast cars, elaborate vacations, sailing, painting ... and I like my guitar and a microphone. I find it interesting to create an experience that I'm sharing in, versus living an experience that's someone else's creation.
I guess that's why I like early stage and seed investing, too: You get to be a participant in the creation of something.
Read The Pitch every weekend in the Mercury News or at www.siliconbeat.com. Contact Peter Delevett at 408-271-3638. Follow him at Twitter.com/mercwiretap.