In nearly 25 years as a venture capitalist, Promod Haque of Norwest Venture Partners has invested in dozens of companies he says have produced a collective $35 billion in exits. He spent nine straight years on the Forbes Midas List of top venture capitalists -- including 2004, when he was named the best VC in the world.

But Haque isn't just resting on his dot-com hits like Extreme Networks; his portfolio company FireEye notched one of last year's hottest stock debuts. In this week's Elevator Pitch, Haque holds forth on the state of the IPO markets and what's ahead for the valley.

Q How'd you get into this racket?

A I spent several years in various operational roles at public and private companies, including Siemens International, Thorn EMI and Emergent Technologies, before entering the venture world. As CEO of a startup called Dimensional Medicine, I gained a true appreciation for the very real experiences that entrepreneurs encounter each day.

Going through the process of raising money, running out of cash, looking for additional capital, hiring people, conducting a layoff and selling products, while at the same time growing the company, was an enlightening experience and proved to be addictive.

Q What kinds of pitches are you looking for now?


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A Pitches can come from a wide range of sectors and stages. We look for great ideas -- everything from early to later stage SaaS (software as a service) and cloud infrastructure opportunities, to consumer Internet and marketplace plays, to growth equity investments that are founder-owned, bootstrapped and exhibit significant revenue and growth but have never taken institutional money.

We're long-term investors who look for big ideas. We like to work with entrepreneurs who are looking to build significant businesses.

Q What's the biggest mistake entrepreneurs make?

A Bringing their product to market before it is truly ready. There is a temptation to create buzz and get the product out the door in an effort to quickly drive up valuations. However, if the product fails, it is very difficult to recover.

Business referrals at our firm often come from customers. We maintain relationships with many chief information officers and other key technology decision-makers, and we want to speak to entrepreneurs who have at least validated their ideas with these potential customers. This type of feedback is critical, and being a patient entrepreneur and pacing a product can pay dividends in the end.

Q What's the next big thing going to be?

A There are many exciting things to look forward to in 2014. The advancements we've seen in cloud and SaaS technologies, the increased use of mobile and the continued influx of sophisticated cyber security attacks have created a lot of opportunity.

But the area I am most excited about is the rise of APIs (application programmer interfaces, bits of code that let software applications "talk" to each other). We knew early on that the API economy was going to be a fast-growing sector, and it will continue to gain momentum in 2014 as the world becomes entirely programmable.

Q What are your thoughts on the current IPO market? And do you expect mergers and acquisitions to outpace stock offerings when it comes to VC exits?

A 2013 was a very good year for NVP and the market overall, and I see this trend continuing over the next 12 months. I would expect M&A to stay on pace with IPOs -- if public market investors continue to be excited about companies growing at strong rates.

We've seen a great mix of successful IPOs and M&A activity: FireEye, RetailMeNot, NTT Communication's purchase of Virtela and 41st Parameter to Experian. These liquidity events created more than $10 billion in market value.

We also have a number of companies that are poised for growth and exit success in 2014, such as Lending Club, Lumosity, Adaptive Planning and MobileIron, and we look forward to another positive year.

Q Norwest has its roots in a big Midwestern bank, and over the decades it has backed everyone from supercomputing pioneer Cray to Dairy Queen. Today you have $3.7 billion under management and big operations in the U.S, Israel and India. How do you keep such a sprawling outfit from becoming unwieldy?

A I think what's unique about NVP is our diversification strategy. We operate out of the same fund, so whether it's an early stage venture or growth equity investment, we're quite diversified, which gives us the opportunity to partner with many different types of entrepreneurs.

We have three "axes of diversification" at NVP, investing by stage, sector and geography. We have many talented people who are a part of our global team, and investment specialists in each group who focus on specific sectors and stages. And we've carefully managed the growth of our firm so that we continue to drive results.

Contact Peter Delevett at 408-271-3638. Follow him at Twitter.com/mercwiretap.