as a result we tend to hear about things that are emerging. If we feel they have the right team and hear about an interesting emerging market, then that’s the sort of deal that we’re excited to get, to invest in.

Angel Mehta: There’s been so much talk about the opportunities in software drying up, except for SaaS. Have you personally shied away from enterprise software deals?

David Hornik: Each deal gets judged on its on merits. I’ve invested in software as service deals, and I’ve invested in enterprise application companies. In each instance I’ve thought that two things were true. One, the software was addressing a real, legitimate pain point in the industry around which it was being built. Second, the way it was being delivered in the context of that particular industry and software. So, does it make sense to deliver software for a small business as an ASP? Yes. Does it make sense to deliver critical applications that impact a specific internal financial supply chain as a service? No, not really. Those companies would much rather maintain all of their financial data behind the firewall and they’re not interested in the software as a service approach.

Angel Mehta: Back to the topic of picking deals to do. If you don’t have a market-specific approach, do you at least have a checklist that you go through in determining whether you want to back an entrepreneur? What are the evaluation criteria?

David Hornik: No, I don’t have a checklist. There is a certain set of skills that are meaningful for any entrepreneur who’s building an early-stage business. If you’re serious about potentially investing in a company, you spend a lot of time with the team that will be building that particular company and try and get an overall sense of the degree to which they have all of the things covered. I don’t have some comprehensive list of those things. However, the degree to which they can understand and appreciate the markets, the selling into that market and building the product is extremely important. It’s of the utmost importance that they attract quality employees and hire well and are good spokespersons for the particular technology they’re building because they’re going to need to go raise more money. They’re going to need go sell it and they’re going to need to be evangelistic. So, as you look at each company, they will need to have all those set of skills covered. But those items can be covered by the team as well – it’s not necessary that the entrepreneur have it all.

Angel Mehta: Would you back an entrepreneur that did not have a track record that you could use as a proxy for those skills?

Dave Hornik: Sure. We absolutely would and I think historically we have done just that. Dave Marquardt, who founded August, funded Bill Gates when he didn’t have a track record. He funded Scott McNeely and the founding team of Sun when they were in their twenties and didn’t have a track record. I funded SixApart that was founded by a husband and wife team in their twenties who are extraordinarily smart and savvy and built wonderful software and now are building a team to grow the company. So I think that we invest in people who are smart and driven and appreciate the market in which they’re competing and we believe can go win in that marketplace. Track record is just one factor.

Angel Mehta: Is it your preference that after a company hits a certain level to always bring in a professional CEO? How long do you wish the entrepreneur to stay involved?

Dave Hornik: It just depends on the entrepreneur and depends on the circumstances. If you look at the Bill Gates or Scott McNealy examples, then it has been wildly valuable to have the entrepreneur stay involved over a long period of time. So I think, as general matter, we try and invest behind people who we think will be able to build a company to a point at which it gets interesting for us as investors.

I know many entrepreneurs who actually have no interest in the part of business-building that requires you to go from 100 to 10 000 staff. That’s just not what wakes them up in the morning. They are the ones who are inclined to remove themselves from the company when it gets to that stage. Then there are other entrepreneurs whose primary interest is in building a big business within which they remain involved from beginning to end. “It just depends on the person”, is the best answer I can give. We’re not going to remove an entrepreneur who’s doing a great job as CEO.

I think we, in the investment community, are best served by finding people who will stay involved and engaged and add the most possible value as long as they deem it appropriate and then making sure that you build the company around and with those people so that you can maximize the likelihood of the company’s success. Whether that involves the founding CEO, or staying CEO, or taking on some other role in the company, is really an evolutionary question that has to be addressed over the period of time you’re building the company.