People come to venture capital from a wide range of backgrounds. Peter Solvik did it after 20 years at two of Silicon Valley's corporate powerhouses.
Solvik spent a decade at Apple (AAPL), then in 1993 joined Cisco Systems (CSCO), where he was chief information officer. In his career's third stage, Solvik has spent the past 10 years at Sigma West, specializing in enterprise software companies.
In this week's Elevator Pitch, we sound out Solvik on the future of the "cloud" and whether his former employers can regain their lofty status. We also find out why his firm is ditching VC-laden Menlo Park.
Q: How'd you get into this racket?
A: Cisco was known for being a leading-edge adopter of information technology in the '90s. As CIO, I became a go-to person for VCs evaluating enterprise IT startups. In this role, I was invited to serve on several boards as an outside director. And through that, I learned about the industry and built close contacts with a dozen venture firms in Silicon Valley.
When I decided to retire from Cisco and had hired my replacement, I met with a number of firms that were interested in talking to me about joining them.
Q: What kinds of pitches are you looking for now?
A: Pitches from great entrepreneurs. It's all about the people.
While Sigma West invests in a wide variety of tech companies, our primary focus is on finding excellent teams with distinct technologies. We're currently looking for smart entrepreneurs in the areas of cloud, software-as-a-servive, security and mobile.
Q: What's the biggest mistake entrepreneurs make?
A: Every company and entrepreneur has a unique set of factors and challenges, so keeping an eye on the ball and balancing all of them is where they may risk failing.
There are many mistakes that an entrepreneur can make that could derail their company, running the gamut from intellectual property issues to product development, focus, execution and cash flow. In addition to providing financing and guidance, I see my role as highlighting possible areas of concern before they become critical issues.
Q: What's the next big thing going to be?
A: Obviously, we're in the middle of a massive transition from on-premise and installed, customized enterprise applications and infrastructure to cloud, SaaS and software-based technologies, ranging from apps all the way to network and data center infrastructure. That transition will take place over 10-plus years, so there will be many new opportunities to take advantage of these waves.
Q: You spent 10 years at Apple. What does the company need to do to regain its mojo?
A: Apple has not lost its mojo. Wall Street is evaluating the company based primarily on market cap, and staying No. 1 is a tall order in the fast-moving, consumer info tech industry. I'm confident Apple will continue to release fantastic new products and services, both evolutionary and revolutionary, that will keep them at or near the top for some time to come.
Q: You also spent a decade at Cisco, which saw a huge run-up in its share price during the dot-com bubble and was briefly the most valuable company in the world. What did that experience teach you as an investor about how markets can get overheated -- like, say, the current enterprise software and mobile technologies that are so much in vogue?
A: Yes, Cisco had a massive run-up, but unlike many of the fad companies at the time like Webvan, Pets.com and many, many others, they had a substantive, real, growing and profitable business. And although their stock price has been fairly flat, Cisco remains a large, successful, well-regarded company.
As an investor, my focus is always on a business having a real revenue model, a path to profitability and sustainable growth over the long term. Beyond that, the markets will do what the markets do.
Q: Sigma West is about to announce that it's closed its Peninsula office and moved to San Francisco. What does that say about the city's prominence in the current startup scene?
A: We moved to San Francisco from Menlo Park because the city has the perfect ecology for innovation. In 49 square miles, it has 1,826 tech companies and over 20 incubators/accelerators. San Francisco companies raised $4.3 billion in venture capital in 2011 -- 16 percent of the total raised nationally.
We consider the city a hotbed of startup activity within the Silicon Valley region, and we want to be close to the heat.
Contact Peter Delevett at 408-271-3638. Follow him at Twitter.com/mercwiretap.