Private Equity Insider, May 12th
Fellowship Ranks Swell With Big 2006 Class
Article by Tracey Regan, Senior Writer, PEI
Several up-and-coming venture capitalists received notice this week that they have won Kauffman fellowships, coveted two-year apprenticeships served under some of the industry's most prominent professionals. The new class is the largest-ever and most geographically diverse for the Center for Venture Education program, reflecting both the expanding reach of the venture capital business and a recent burst of entrepreneurial activity around the world. "The industry is very vibrant right now," said Patrick Von Bargen, chief executive of the Shawnee Mission, Kan., not-for-profit organization that runs the Kauffman Fellows Program.
"Firms are hiring new talent because of the very real expectation there will be more and more deals, and because they need the help." Most of the 25 men and four women selected for the 2006 fellowships will work alongside mentors at traditional venture capital shops - including industry rainmakers Tom Baruch of CMEA Ventures, Andreas Stavropoulos of Draper Fisher Jurvetson and Steven Burrill of Burrill & Co. Four of the new fellows, meanwhile, were assigned to corporate venture capital programs sponsored by Sprint Nextel, Applied Materials, Novartis and Itochu. Just two such corporate entities signed up in 2004. Von Bargen attributed their heightened presence to a growing desire by many companies to take stakes in startups that are developing new technologies.
Also taking on the recruits were a state economic development program and In-Q-Tel, an outfit backed by the CIA. Just over 20 of the fellows are staying at firms where they already work, while the others will go to operations that are seeking new talent. Many of them will be stationed in venture capital hubs, such as Silicon Valley. But some will land in such far-flung locations as India and Israel - as well as in quieter U.S. locales, including Santa Fe, N.M. and Madison, Wis. For the most part, they'll pursue investments in information-technology and life-science companies.
For aspiring venture capitalists, a Kauffman fellowship represents a unique opportunity to learn from some of the most respected professionals in the business. While each firm designs its own apprenticeship, fellows often accompany their mentors to meetings, work with them on business presentations and assist with new investments. The fellows can also take on more substantial roles, accelerating their paths to prized partnerships. For example, 2005 fellow John Chen is spearheading investments in emerging technology companies for Battery Ventures' San Mateo, Calif., office. And Jeffrey Stein, also from the class of 2005, opened a San Diego office for Sofinnova Ventures. Jason Green, a member of the original Kauffman class of 1995 who now chairs the Center for Venture Education's board of directors, said expectations of the fellows' abilities have risen considerably since the program's founding. "They are now expected to hit the ground running," he said. The expectations aren't unrealistic though, as the fellows bring advanced degrees, entrepreneurial experience and already tested investment savvy to the table.
One touted fellow this year is Anton Titov, who holds a medical degree from St. Petersburg University, an MBA from Harvard and a Ph.D. from Rockefeller University. He will be investing in life-science companies with Patricia Cloherty, at Delta Private Equity in Moscow. In addition to learning more about the venture capital business, participants gain valuable access to other alumni. Greensaid it was a natural move, for instance, to seek out other Kauffman fellows for advice and investor contacts when he started Emergence Capital Partners in 2003.
Emergence is taking on a new fellow this year in Kevin Spain, who had been a director of corporate development at Microsoft. He'll be an understudy to partner Brian Jacobs, initially as a principal. This year's fellows were chosen from a field of 265 applicants. They are first screened by a team of Kauffman alumni, former mentors and other venture capitalists, and then interviewed extensively. There were 20 Kauffman fellows in last year's class, up from 14 in 2004. Of the program's 77 graduates, about 75% are general partners at their firms.
The fellows meet four times a year for educational programs, including a kick-off event in Boston in July.