ILM East 2012: VCs — Follow the Local Money Part 2

BIA/Kelsey‘s chief strategy officer and ILM program director, Matt Booth, led a discussion with David Hornik, principal, August Capital, at ILM East.

Hornik has had an eclectic career ranging from computer music to intellectual property attorney, entrepreneur, and now venture capitalist and lecturer at Stanford’s business school.

From his vantage point and varied background, Hornik tries to find “the category leader before there’s a category.” Getting there is not easy, starting with screening 1,000 companies to get down to perhaps two that he’ll put money into.

One of the things Hornik looks for in a team is a willingness on the part of the entrepreneur to commit to a serious level of risk to pursue an idea.

He cited the case of two Stanford professors, experts in radio frequency wireless communications. They pitch him on the value of “sending data over the air without any cables — don’t you hate cables?” Hornik agreed. He was drawn to their passion and the notion that two tenured professors would leave their safe, comfortable positions to start a company based on their ideas.

Their solution for wireless data communications is something ubiquitous today, Wi-Fi.

On other topics, he shared his belief that it’s a “no brainer for Facebook to develop a global payments system.” With Facebook’s upcoming IPO, this is a logical place for them to grow.

“Big data” is gaining popularity and can be a hidden gem for companies willing to mine their data. Hornik noted that when Microsoft and Yahoo were in merger talks, one of the key assets they had — data — was not highlighted. But there’s tremendous value locked up in their data. Hornik declared that such a merger would instantly have been the world’s largest social network.

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