Under the watchful eye of Jeff Cooper and his partners, Dick Petritz and Karl Walter, New Venture Resources is building its impressive portfolio and forging ahead with risk capital investment — undeterred by temporary technology industry contraction or setbacks. So what makes a venture capital angels like New Venture Resources take the risk? Here’s a look through one company’s eyes.
Jeff Cooper’s background includes BA and MBA degrees from CU. The first half of his career went to developing analytical and people skills as a clinician and researcher in Behavioral Medicine. Cooper was a part of the first research team behind a venture-backed, medical device start-up in Boulder, CO and says “entrepreneurial hooks were planted in me early in life”. While finishing his MBA he went to work for the Small Business Administration as a business consultant with the SBDC (Small Business Development Center) at the Colorado Springs Chamber of Commerce. It was while working at the SBDC that he developed a professional relationship with his mentor, Dick Petritz. In 1992 Cooper joined New Venture Resources, a seed capital and venture management company formed by Petritz years before. Cooper was interested in providing both capital AND management assistance to new enterprises and Petritz, having orchestrated the public offering of Simtek stock in 1991, was ready to tackle additional investments, or so he thought.
New Venture Resources was formed by Richard Petritz in the late ‘80s as a follow on to his first venture capital fund, New Business Resources of Dallas, TX. Says Cooper, “New Venture Resources (NVR) follows the same formula for successful venture investing that was established in the ‘70s at New Business Resources; seed and early-stage investments in high-technology companies where the fund and business management can leverage off each others’ strengths.” According to Petritz, “New Business Resources — founded in 1969 — was the first venture capital company in the United States to focus exclusively on early-stage investing in high-technology companies.” Unlike other professional venture capital companies, NVR utilizes its own resources to make investments and has no institutional or limited partnerships. In that regard, Cooper says he has had to wear a third hat in the company as a Family Office Executive, directing investment and tax strategy for a diversified portfolio of investments, which includes an allocation for private equity — the stock purchased in privately-owned firms. Petritz taught Cooper what he had learned through his experiences as the Director of (Semiconductor) Research and Development at Texas Instruments (in the 60′s) and as a venture capitalist: VC’s can provide money, but new companies need to leverage the assistance and relationships of their board, investors and industry contacts in order to flourish.
What Cooper and Petritz had most in common was a love for solving business problems through venture management, a term originated at New Business Resources. Taking interim management positions to stay close to a company’s development, NVR venture managers take on high-level positions in company’s they back. In exchange for accepting full accountability and operating responsibility, they accept a mix of cash and stock as payment. Sometimes all they do is provide services to entrepreneurs for just stock. It’s a strategy that has worked well, especially for Colorado Springs. Over the course of both venture firms, Cooper and Petritz have made 20 private investments and accepted venture management engagements with 8 different start-ups. Investments and engagements with 8 local companies have resulted in follow-on investments exceeding $150,000,000. Some of the those companies, most notably Mostek, Inmos and Simtek, have created well over 3,000 jobs and spawned even more local spinout companies. Others like H.I.S. Financial Services have remained tight and nimble to react quickly to the demands of the market.
Cooper learned the ropes of venture management during his tenure from 1992-1998 as a controller and a corporate/business development executive with companies like Simtek, Momentum Microsystems, and Xmetrics. Petritz has served as a CEO and CFO with Mostek, Inmos and Simtek — and stayed with those companies through their highs and lows. He retired in 1998, but still maintains a large position in Simtek Stock. “We’ve had to manage through crisis” says Cooper, “and I think that’s one of our strong points as a company. All start-ups go through a white knuckle phase and it takes a patient, hands-on approach to see where to go next.” He points out, “we understand companies from the inside out — and we are committed to their success.” Cooper, and Karl Walter, a private investor who joined the NVR team in 1998, both subscribe to the core philosophies of early-stage investing established through Petritz’s mentorship and a long, track record of experience. Says Cooper, “venture investing is a constant education. If you want to pioneer you got to be willing to take some arrows in the back”.
Cooper recently visited one of his portfolio companies in California. He met with management, reviewed the most recent business plan and had a chance to observe office activity, how the team worked together, and even check the white boards of key managers to understand what they’re working on right now. A true seed investor and entrepreneur must pay attention to every facet of a company says Cooper, or have a lot of faith in the company’s board. He notes “team functioning and management are the key to a start-up’s success. Unlike large technology companies, there are rarely second chances for companies that can’t take invention and get product to market quickly. We look to invest in companies that have solutions for large, fast growing markets. But if your design team can’t work together or don’t respect the CTO you’re most likely going to be dead in the water or washed out completely as an investor.”
As far as New Venture Resources’ plans for the future, Cooper is upbeat. “We want to support the companies we invest in and participate with management where we think we can add value” he promotes. “Early-stage private investment alongside entrepreneurs in the fields of semiconductors, communications and information technology has been our target for over 30 years. The tech meltdown is a great opportunity for those who have capital held back to invest or those companies with positive cash flow to weather the storm.”
According to colleague, Al Davis, the first endowed chair selected for the CITTI program and founder/president of Omnivista, a technology start-up, Cooper is a highly astute and ethical angel investor. “He has the highest standards and demands the best from his portfolio companies,” Davis says.