There’s old money, and there’s big money, and then there’s Oak Investment Partners. Founded in Connecticut in 1978, the firm has poured $9 billion into hundreds of companies around the world, including 2Wire, Demand Media, Kayak and the Huffington Post. Oh, and it also raised one of the largest investment funds in the history of venture capital.
Ren Riley has been along for the ride since 1999, focusing on Internet and consumer startups from the firm’s Menlo Park offices. In this week’s edition of Elevator Pitch, we ask the former investment banker why the firm, despite its pedigree and deep pockets, doesn’t draw much notice in Silicon Valley — and whether that’s a good thing.
Q: HOW’D YOU GET INTO THIS RACKET?
A: I was working in corporate finance at Robertson Stephens in some of the same sectors that Oak was active in, particularly digital media and enterprise software. A recruiter introduced me to managing partners Fred Harman and Bandel Carano, and they thought I could lend a hand. I’ve always been interested in new experiences, so I was open to the opportunity. I joined Oak as an associate in 1999; in hindsight, getting out of banking seemed prescient.
Q: WHAT DO YOU LIKE ABOUT VC?
A: It’s simple: I enjoy working closely with entrepreneurs, embracing their creativity and passion, and helping them navigate the opportunities and challenges they face. We all make mistakes, but it’s rewarding to identify issues and solve problems together. In the case of Oak, we are typically the largest investor in a company and take an active role on the board, and it feels like we’re part of the management team.
Q: WHAT KINDS OF PITCHES ARE YOU LOOKING FOR NOW?
A: Oak is receptive to a wide variety of pitches and has always been that way. We look for proven entrepreneurs who are delivering on capital-efficient opportunities.
Oak is somewhat unique in our focus and experience in content-driven businesses, and today we’re particularly focused on how companies are capitalizing on mobile trends. Whether it be an Internet, new media or enterprise software company, mobile has to be a core part of the strategy.
Q: WHAT’S THE BIGGEST MISTAKE ENTREPRENEURS MAKE?
A: I often see entrepreneurs who are trying to do too much. I recommend that you focus on what you do best and nail it. Don’t try to be everything to everyone; leave that to the big companies. Grow and establish yourself, then step and repeat.
Q: WHAT’S THE NEXT BIG THING GOING TO BE?
A: I think we’re only in the third inning for mobile, including search, advertising and payments. Mobile search is a tremendous opportunity, where you can use location and data to create better context, targeting and personal experiences — which leads to more actionable events, primarily e-commerce.
Mobile advertising is still in early days, too. Everyone is trying to determine how to monetize this valuable content, but the current approaches aren’t particularly effective. And everyone is talking about mobile payments as a global phenomenon. We see continued opportunity to capitalize on the convenience mobile payments offer and the potential use of purchasing data for advanced targeting and promotions.
Q: YOU’RE ACTIVELY INVOLVED IN OAK’S CHINA PORTFOLIO. TWO YEARS AGO, SILICON VALLEY VCS WERE FLOODING INTO CHINA, BUT MANY HAVE PULLED OUT OVER CONCERNS ABOUT IP, REGULATION AND THE IPO MARKET. HOW DO YOU ASSESS OPPORTUNITIES THERE?
A: We have a venture partner, Allan Kwan, who is based in China and has a local team that works closely with him. Allan and I are in constant contact, and I travel to China 8 to 10 times a year.
We vet a number of opportunities each year, but we have been patient over the past decade. The exit environment seems to be improving a bit, though we’re still cautious. In the long term, we continue to see tremendous potential in China across all sectors, particularly companies that focus on the Chinese consumer. First and foremost, we see strong domestic demand in China for clean tech and environmentally critical technologies, and we are capitalizing on this with a few strategically important companies in our portfolio.
Additionally, we believe there is a significant opportunity to scale global companies with highly disruptive, proven technologies in China.
Q: OAK IS ONE OF THE BIGGEST VENTURE CAPITAL FIRMS IN THE BUSINESS, IN TERMS OF FUNDS UNDER MANAGEMENT. BUT — MAYBE BECAUSE YOU WEREN’T FOUNDED HERE — YOU TEND TO FLY BELOW THE RADAR A BIT COMPARED TO SOME SILICON VALLEY NAMES LIKE KLEINER PERKINS OR SEQUOIA CAPITAL. IS THERE AN ADVANTAGE TO BE ABLE TO OPERATE A BIT OUTSIDE OF THE SPOTLIGHT?
A: Oak was founded in Connecticut, but I don’t think that’s the real reason for our lower profile. We really prefer it that way – we like to see our portfolio companies in the spotlight. We spend all of our time with management teams in the pursuit of building enduring companies, and their success will obviously drive Oak’s success.
Photo courtesy of Oak Investment Partners.