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Years ago, during a fund-raising tour of Silicon Valley VC firms for my previous company, we also pitched Intel Capital (their in-house VC arm). Their feedback

by hugs 9y ago

Years ago, during a fund-raising tour of Silicon Valley VC firms for my previous company, we also pitched Intel Capital (their in-house VC arm). Their feedback to our pitch was that our SaaS service was "too compute intensive" and therefore they passed..... Intel thought we used too many CPUs?!..... All these years later, I'm still in disbelief. I do realize that VCs often are uncomfortable giving the real reason they're passing, but "too many CPUs" was a first for me. (And my company is still around and making more than $25MM/year, thank you very much.)

wslh 9y ago
Intel Capital is another branch and not known as a leading VC firm. I don't think you can connect their achievements with Intel itself.
- hugs 9y ago
  Another possibility is that they were indeed, correct -- we did use many CPUs to perform the work, even though it is the nature of the work (running end-to-end tests on browsers, simulators, and devices).
Permit 9y ago
In a similar vein, we pitched Microsoft Ventures on a developer tool we were building. One of their chief concerns was that we were targeting C# developers. (Why not JS? Is C# even that popular?) This helped drill home the intuition that large companies are not a single entity, but an amalgamation of different groups and individuals each with a potentially different motivation.
dmichulke 9y ago
Maybe the intention of the fund was to diversify - i.e., hedge their huge exposure to the CPU market by investing into totally different things, i.e., not you!
- hugs 9y ago
  Quite possible!
- slivym 9y ago
  I knew a guy who was a technical advisor to Intel Capital (worked at Intel). They're not there to diversify, they use capital to advance their existing business strategy in key markets. They often take stakes in companies that Intel are partnering with on technical projects in order to gain some level of insight, control, and eventually to acquire the company if there's a strategic argument for it. For example, a company might be developing some cool new IP that Intel is considering licensing or is licensing. Intel Capital will take a stake in the company, and then eventually might consider acquiring the company if they want to corner the technology or think it's cheaper than a long term licensing agreement.
mseebach 9y ago
> Intel thought we used too many CPUs?!..... Before your firm can buy a ton of Intel CPUs and make money for Intel, it needs to be profitable. It doesn't make sense for their VC arm to give you money to buy CPUs, then fail to sell your product and go bankrupt.

by hugs 9y ago

wslh 9y ago

Intel Capital is another branch and not known as a leading VC firm. I don't think you can connect their achievements with Intel itself.

hugs 9y ago
Another possibility is that they were indeed, correct -- we did use many CPUs to perform the work, even though it is the nature of the work (running end-to-end tests on browsers, simulators, and devices).

Permit 9y ago

In a similar vein, we pitched Microsoft Ventures on a developer tool we were building. One of their chief concerns was that we were targeting C# developers. (Why not JS? Is C# even that popular?) This helped drill home the intuition that large companies are not a single entity, but an amalgamation of different groups and individuals each with a potentially different motivation.

dmichulke 9y ago

Maybe the intention of the fund was to diversify - i.e., hedge their huge exposure to the CPU market by investing into totally different things, i.e., not you!

hugs 9y ago
Quite possible!
slivym 9y ago
I knew a guy who was a technical advisor to Intel Capital (worked at Intel). They're not there to diversify, they use capital to advance their existing business strategy in key markets. They often take stakes in companies that Intel are partnering with on technical projects in order to gain some level of insight, control, and eventually to acquire the company if there's a strategic argument for it. For example, a company might be developing some cool new IP that Intel is considering licensing or is licensing. Intel Capital will take a stake in the company, and then eventually might consider acquiring the company if they want to corner the technology or think it's cheaper than a long term licensing agreement.

mseebach 9y ago

> Intel thought we used too many CPUs?!..... Before your firm can buy a ton of Intel CPUs and make money for Intel, it needs to be profitable. It doesn't make sense for their VC arm to give you money to buy CPUs, then fail to sell your product and go bankrupt.