Decrease font Decrease font
Decrease font Decrease font
Enlarge font Enlarge font
Enlarge font Enlarge font

An interview with Robert Walker
Partner, Sierra Ventures
By David Kralik
(T-bird ’11)


Exclusive Interview with Robert Walker, Partner, Sierra Ventures

David Kralik ’11: While you are based in Silicon Valley, how global is your investment outlook?
Robert Walker: Extremely. Although we invest primarily in North America, about 15-20% of our investments are in China and India, and we look at companies in Europe, Korea, Taiwan, Israel, etc., as well. And a majority of our North American investments have significant portion of the revenue, markets and/or operations outside of North America.

Kralik: Do you anticipate increased deal flow from India? China? Latin America?
Walker: Yes, and yes. Regarding Latin America, we have not invested much in Latin America.

Kralik: Some of the most notable companies are launched during times of recession, are you seeing increased deal flow as a result of the economic downturn?
Walker: No. We saw reduced deal flow in 2009 due to the large number of insider rounds. 2010 is back to more “normal” levels.

Kralik: With viable exit strategies still scarce, what are you advising your portfolio companies to do in order to weather the storm?
Walker: Actually, the IPO market is showing signs of life, and the M&A environment is much improved. Exit strategies were scarce in the latter part of 2008 and much of 2009 – in which case our advice was to shift the emphasis more towards getting to cash flow break even vs. faster growth, and get further with the existing cash on the balance sheet.

Kralik: Have you considered an IPO overseas? If so, which markets are most appealing?
Walker: Yes, some. Primarily Hong Kong.

Kralik: Some people have suggested that there will be a “Shakeout” in the venture capital industry and far less players in the next five years. Is this healthy for the VC?
Walker: Yes. The venture industry is still working through the bubble of the 2000 time frame. In order for the venture industry to bring healthy returns to our investors, there needs to be enough scarcity of venture resources to drive those returns. So we think the industry is returning to the healthy model of the mid 1990s, where it should be.

Kralik: What is the outlook for 2010/2011 vintage funds?
Walker: Ask me in 5-7 years! But we are firm believers that innovation and entrepreneurship will continue to build great new companies suitable for venture investing.

Kralik: In terms of fund size, is smaller really better? What strategy is Sierra Ventures employing?
Walker: We believe that, for traditional technology-focused venture investing, smaller is better. We continue to focus on capital-efficient, early-stage venture investing.

Kralik: How concerned are you about the effect of carried interest legislation? Do you anticipate larger GP contributions due to the proposed legislation?
Walker: In general, anything that reduces incentives for deploying capital in relatively risky, early-stage, high-growth entrepreneurial ventures in the US will ultimately damage US competitiveness and industrial growth, at a time when the very same models are working extremely well in other regions of the world.

About the Interviewee/Interviewer

Robert Walker

ROBERT WALKER
Partner, Sierra Ventures

Robert Walker is a Partner at Sierra Ventures focused on solid state lighting, displays, clean technology, solar energy and semiconductors. He serves as a Board Observer at mSilica, MIOX, and Applied MicroStructures

Prior to joining Sierra in 2007, Robert was the CEO of BridgeLux, founded YEBY Associates and was a Managing Director at Vincera Capital. Prior to Vincera, he was General Manager of Pacific Rim business at Emcore. He is a 15 year veteran of the solid–state lighting industry with significant experience in Asia. He started his career as a high energy physicist, conducting research at Fermilab, SLAC, and the National Lab for High Energy Physics in Japan, and is an author of the paper announcing the discovery of the “Top” quark.

Robert holds a BS in Electrical Engineering, Math and Physics from the University of Wisconsin–Madison and a MS and Ph.D in Physics from the California Institute of Technology.

David Kralik

DAVID KRALIK
(T-bird '11)

David W. Kralik is a second trimester Thunderbird currently studying in the Czech Republic. In addition to academic studies, he also serves as Chief Marketing Officer at FreedomSpeaks, a company he helped found focusing on transforming civic engagement.