• Randy Glein of DFJ Growth on Today’s Crazy Late-Stage Market

    117 - imgl3791DFJ, the renowned Sand Hill Road Firm, is celebrating its 30th anniversary this year. At the same time, its low-flying, later-stage offshoot, DFJ Growth, is turning 10.

    This week, we caught up with DFJ Growth cofounder Randy Glein to understand how closely related or not the two remain, how the firm is feeling about the shaky late-stage market, and whether his team of five general partners is ready to raise their own, third, fund from investors. Our chat has been edited for length.

    Quickly, what are you looking for when you’re writing checks? How mature does a company need to be?

    We pick up where venture funds leave off. We’re invest in the scaling phase of businesses, so we’re looking for that inflection point where the company has found its product market fit and customers who are paying for its products. We come in when companies are generating low tens of millions of dollars in annual bookings, growing more than 100 percent a year, and playing in a market that’s big enough to support a large company. That can be $1 billion to $100 billion dollars, depending on the market opportunity.

    Can you invest in a company regardless of whether or not DFJ’s venture team has made an earlier investment in it?

    Many companies we’ve co-invested in with DFJ and not followed. It just depends on the stage of the business. Also, as we’ve raised bigger funds – our first fund closed with $290 million in 2007 and our second closed with $470 million in 2013 — there’s been less overlap. I’d say 25 to 30 percent of our first fund was invested in companies backed by DFJ; in the second fund, it’s less than 10 percent. Our charter is to invest in the most exciting growth-stage companies on the planet, and to go anywhere to find them.

    Do you share the same investors?

    Again, there was more overlap in first fund; with the second fund, less than half the capital is coming from [DFJ’s same investors]. Some LPs want to invest in venture. Some want to invest in growth stage companies because they have a different risk tolerance profile or need to take a different size bite. Some want both and see us as sister funds.

    Are you raising another fund in 2016?

    More here.

  • Elon Musk: People Need “Things That Are Inspiring”

    Elon MuskThis week, the Web Summit conference in Ireland managed to attract some very big names, including Tesla and SpaceX CEO Elon Musk, who was interviewed yesterday as part of the event’s closing ceremonies.

    The billionaire entrepreneur wasn’t alone on stage; venture capitalist Shervin Pishevar was among the guests. But Musk was clearly the main attraction. (As a leather-clad Musk strode to his seat, the James Bond theme resounded throughout the hall, and every smartphone in the audience shot up into the air to take pictures.) Here’s some of what Musk had to say during the panel, which was moderated by Storyful founder and CEO Mark Little:

    On whether it’s a “great time to be alive as a creator”:

    “I don’t think you could ask for a better time in history. I think people sometimes forget that. Realistically, when else would you want to be alive?”

    On why, while running two billion-dollar companies, he would bother to fly to Ireland for Web Summit:  

    “I understand there’s going to be a great party tonight,” said Musk (convincingly).

    Asked about his “lightbulb moment” as a teenager: 

    “It was more like when I was 21,” said Musk. “When I was a teenager, I didn’t really know what I was going to do. I liked playing video games and I liked writing software. So I thought maybe I’ll write [software professionally]; that seemed like a pretty fun thing. And then when I was in college, I started thinking about, ‘Well, what’s going to most affect the world?’ Actually, I thought there were five things that would most affect the world, three of which I thought would definitely be positive things to solve, two of which [were] a slight question mark. As it happens, I was able to get involved in all three of those things: the Internet, sustainable energy, and space.” [Alas, Little didn’t ask about the two other things.]

    On why Musk didn’t simply start another e-commerce company after co-founding PayPal: 

    “The thing that motivated me there was I kept expecting that there would be a manned mission to Mars. That was the continuation of the dream of Apollo. We went to the moon. Then there was supposed to be a base on the moon; there were supposed to be space hotels. There were going to be missions to Mars. And year after year, that stuff didn’t happen. At first, I thought [that] maybe people [had] lost the will to do that, and I came up with the idea of this mission to Mars to kind of get people excited about that stuff again. But I came to the conclusion that I was actually wrong about that assumption, and there’s plenty of will. But it’s really about making sure there’s a way. If people think there’s a way to do it without bankrupting the economy, I think there’s plenty of will.”

    On all the attention he receives versus SpaceX: 

    “We’ve got an awesome team at SpaceX. There’s way too much attention paid to me, and that’s not right. People want to identify with an individual, and so that’s naturally what occurs, but there’s a super-talented group at SpaceX who make it happen.”

    Musk was also asked about his vision for the future of humanity and space exploration in particular:

    “I think it would be really great to have a base on Mars, and ultimately to be making steady progress towards making it a self-sustaining civilization on Mars. I think that’s the most powerful thing we can do to ensure the long term survival of civilization. And it’s just a very exciting future, I think, if you imagine a future where we’re exploring the stars, and we’re a multi-planet species, and the scope and scale of society is that much greater.

    “I find that view of the future really exciting and inspiring, and there need to be things that are inspiring. There are lots of problems on Earth, and there always will be, but there need to be things that are inspiring, that make you want to get out of bed in the morning. Having a bright future in space is one of those things.”

    [By the way, for European readers eager to get their hands on a Model S sedan, Musk said Tesla “should have the right-hand version in production in March” and he estimated that the car will be available to purchase by “late March [or] April.”]

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