Tallwood Venture Capital - For Entrepreneurs




		What kinds of companies does Tallwood Venture Capital invest in? Why has Tallwood decided to focus exclusively on semiconductor companies and semiconductor-related technologies? At what stage of development does Tallwood invest? What is the typical size of Tallwood’s investments? How often does Tallwood take the lead investor role? Are all Tallwood’s investments in the U.S., or do you ever invest internationally? How does Tallwood compare with larger venture capital firms? How many of Tallwood’s portfolio companies have gone public? How many have been acquired? What is the role of Tallwood’s Executives-in-Residence (EIRs)? How do I approach Tallwood about investing in my company? What is Tallwood’s process for evaluating investments? What is Tallwood’s role after the investment is made? What kinds of companies does Tallwood Venture Capital invest in? We invest broadly in companies with semiconductor and semiconductor-related technologies, including semiconductor manufacturing equipment as well as EDA tools for designing semiconductors. We also look at new materials and processes, although the bulk of our investments are in fabless semiconductor companies. Moreover, we focus only on hard-to-do, disruptive technologies, products and ideas that have the potential to create a significant market impact. < Back to top Why has Tallwood decided to focus exclusively on semiconductor companies and semiconductor-related technologies? Our basic philosophy is simple: Invest in the industry where you have deep operating experience, including successful startup experience. For Tallwood, that industry is semiconductors. The Tallwood investment team members have had senior operating roles in semiconductor companies, giving us the rich technology and industry understanding needed to support our exclusive focus. By putting our attention exclusively on semiconductors and related investments – and carefully choosing portfolio companies that match our strengths – we ensure that there is a good match between the expertise, goals and working styles of Tallwood and the companies in which we invest. < Back to top At what stage of development does Tallwood invest? Our focus is on early stage companies, but will also invest in later stage opportunities. < Back to top What is the typical size of Tallwood’s investments? The average investment is $4 million to $6 million per round, and about $15 million total per company over the life of the investment. However, we have invested as little as $50K to help develop an idea; it is never too early to approach us. < Back to top How often does Tallwood take the lead investor role? Tallwood Venture Capital has been the lead investor in approximately 90 percent of our investments. < Back to top Are all Tallwood’s investments in the U.S., or do you ever invest internationally? Although we focus on U.S. investments, we do invest internationally. < Back to top How does Tallwood compare with larger venture capital firms? With $430 million currently under management in two funds (the $180 million Tallwood II, raised in 2002, and the recently closed $250 million Tallwood II), Tallwood’s capital management level is on par with the semiconductor segments of the largest venture capital firms in the industry. < Back to top How many of Tallwood’s portfolio companies have gone public? How many have been acquired? As of April 2006, two Tallwood portfolio companies (Marvell Technology Group [MRVL] and SiRF Technology Holdings [SIRF]) have gone public and six have been acquired. < Back to top What is the role of Tallwood’s Executives-in-Residence (EIRs)? Tallwood’s EIRs – which we call Executives-in-Residence – reflect the importance we place on operational and management excellence. At most venture capital firms, EIRs are called Entrepreneurs-in-Residence and have the dual responsibilities of helping portfolio companies and pursuing their own opportunities. In contrast, Tallwood’s EIRs are devoted 100% to helping our portfolio companies succeed, performing front-end due diligence on potential investments and then working closely with portfolio companies post-funding. < Back to top How do I approach Tallwood about investing in my company? One effective approach is to contact Tallwood through someone with whom we already have a relationship. If you cannot find a point of contact through someone we know, don’t worry. Feel free to email us, at information@tallwoodvc.com, a presentation that answers the following questions: Team What are the backgrounds and qualifications of your team members? How are the members of your team uniquely suited to solving the problem you’re addressing? Problem: The Market Opportunity What problem are you addressing? Who currently suffers from this problem, and what is the nature of their “pain”? What is the market potential for solving this problem? The Solution: Your Technology/Product What solution do you propose? What is your distinct advantage? How is your product or technology revolutionary, paradigm shifting, etc.? What is the competitive landscape you will face? How do you plan to be positioned in this market? What is your go-to-market strategy (i.e., distribution channels)? How Much Money You Need What are the financial implications of your plan? What are your financial projections 3-5 years out? How much capital will you need to develop the solution and to support the company over the long term? What volumes and margins can you reasonably expect? How do you arrive at those estimates? < Back to top What is Tallwood’s process for evaluating investments? Initial Assessment: After you provide us with a pitch outlining the investment opportunity, we make a quick, initial assessment of your plan. If the pitch interests us, we will schedule an in-person presentation from your key team members. Evaluation: During the evaluation phase, we do a preliminary assessment of the market you have described and its potential opportunity; your team and its capabilities; your technology and product ideas; and your business model. Due Diligence: If the evaluation is positive, we perform a rigorous, in depth evaluation of the technology, market, team and business opportunity. Often, we involve third-party experts to help us with due diligence. Investment Gate: If we reach a positive investment decision, we begin the legal documentation process. If at any point throughout this process we decide against the investment, we will give you honest feedback on why. How long does all this take? Although it can vary, most often a positive investment decision is reached in 8 to 12 weeks from the initial meeting. Throughout the process, we keep you informed as to what our schedule is, what we still need to answer and what we are already comfortable with. < Back to top What is Tallwood’s role after the investment is made? Tallwood takes an active role in our portfolio companies, offering our technical and operations expertise as well as connections with other resources – e.g., consultants, strategic partners, service firms – that are important for helping entrepreneurs build successful companies. For instance, we might advise on marketing and technology strategies, recruiting, forging partnerships (technology, distribution, sales, etc.), ideas for solving technical challenges and securing future financing. A portfolio company typically has one Tallwood partner on its board of directors and one or two EIRs helping the company in specific areas. However, the whole Tallwood team works together on behalf of each company. Tallwood also provides tools and pays for initial consulting to establish the business infrastructure, so the company can focus on its core competences. < Back to top