Author Archives: Hervé Lebret

Covid-19 Startups : BioNTech and Moderna

Yesterday I posted about Airbnb IPO filing here and in a few weeks or months I will update my 600-startup cap. tables to 700. A major upgrade. In the mean time, even if I am not a specialist at all of biotechnology I study some startups of the field from time to time. You can check the tag #biotech for example or a post about Crispr startups. It would have been difficult not to notice recently two other startups which went public recently, Moderna in 2018 and BioNTech in 2019, because of Covid19. Look at their recent stock history when they annouced a vaccine against the virus:

Maybe have a quick look at their cap. table below but first some comments: Moderna had been founded in the Boston area in 2009 and BioNTech in Germany in 2008. Their revenues (and losses) were large at time of filing. A lot of venture capital (which owns 60% of both startups), many employees. Not young founders (46 and 60 at Moderna, 41, 43 and 64 at BioNTech). You can add any comment you want, if any…

In reality, these figures are not that different from those of the giants of the digital world in yesterday’s post, except one maybe, the founders’ age.

Airbnb files to go public – the last giant?

Airbnb just filed to go public. Finally! It maybe the last IPO of the recent giants (and not the latest only), these giants which emerged in the 21st century, such as

and of course is the cap.table, not that far from what I had tried to guess in 2017 in www.startup-book.com/2017/03/13/what-is-the-equity-structure-of-uber-and-airbnb/

Apple and its first investors : hilarious!

This morning, I was participating to a workshop about startups and one question came about the relationships with investors entrepeneurs are trying to attract and invest in their company. I told them it could be frustrating for many reasons, often because VCs never say no but decline too often to invest too. The best illustration comes from Something Ventured, a documentary movie I never stop celebrating. The Apple case is close to being hilarious. You find the extract beginning around minute 51 in the video:


and here is the text: [Narrator] In 1976, the computer was about to get personal. […] For venture capitalists, this represented the opportunity of a lifetime.

[Perkins Chuckles] We turned down Apple Computer. We didn’t – We didn’t even turn it down. We didn’t agree to meet with Jobs and Wozniak.
[Reid Dennis] Oh, that would have been a fabulous investment if we had made it, but we didn’t. We said, “Oh, no, we’re not really in that business.”

[Pitch Johnson] “How can you use a computer at home? You’re gonna put recipes on it?”

[Bill Draper] I sent my partner down to look at Apple. He came back and he said “Guy kept me waiting for an hour, and he’s very arrogant.” And, of course, that’s Steve Jobs! I said, “Well, let’s let it go.” That was a big mistake.

[Narrator] In 1976, the only people who believed in the personal computer… were the geeks and nerds who gathered at Homebrew Computer Clubs.

[Bushnell, founder & CEO of Atari] They needed an investment, and, uh, they offered me a third of Apple Computer for $50,000… and I said, “Gee, I don’t think so.” I could have owned a third of Apple Computer for $50’000. [Sighs] A big mistake. But I said, “Call Don Valentine.”

[Valentine] So we had our meeting. I went to Steve’s house. And we talked, and I was convinced it was a big market… just embryonically beginning. Steve was in his Fu Manchu look, and his question for me- “Tell me what I have to do to have you finance me.” I said, “We have to have someone in the company… who has some sense of management and marketing and channels of distribution.” He said, “Fine. Send me three people.” I sent him three candidates. One he didn’t like. One didn’t like him. And the third one was Mike Markkula. Mike Markkula worked for me at Fairchild before he went to Intel.

[Markkula] I said, “Okay.” ‘Cause that’s what I did on Mondays. I was retired. [Chuckles] I think I was 32 when I retired from Intel. But one day a week, I would help people start companies and write business plans. I did it for free, just for the interaction with bright, uh, people… So I went over and talked to the boys. [Laughs] The two of them did not make a good impression on people. They were bearded. They didn’t smell good. They dressed funny. Young, naive. But Woz had designed a really wonderful, wonderful computer. […] And I came to the conclusion that we could build a Fortune 500 company in less than five years. I said I’d put up the money that was needed.

[Narrator] Mike Markkula came out of retirement, becoming the president and C.E.O. of Apple. And the first call he made was to Arthur Rock. Arthur would have missed Apple if it weren’t for Mike Markkula.

[Rock] Jobs and Wozniak came up to see me, and they were very unappealing. Goatee, long hair [Muttering] Markkula said, “Well, before you make up your mind, there’s a computer show. You ought to come down and see what’s going on.” And he did. He thought somethin’ was happenin’. He wasn’t quite sure what. And there was this booth with everybody around it. I couldn’t even get next to it. And it was the Apple booth.
Then I got a call from Don Valentine. [Chuckles] “I want to put some money in that company” I said, “Okay, you gotta come on the board then.”
You know in the venture capital business, if you look at 200 deals, and you, you might do 10 of’em, and you will think they’re all great, and if one of’em is great, then you’re in the hall of fame.

Just in case, a little more about something ventured from my blog in 2012: https://www.startup-book.com/2012/02/08/something-ventured-a-great-movie/.

Finally, let me remind you of other “missed deals” in another recent post: The amazing challenge of finding great startups.

The Microchip Revolution (Appendix) – Intersil

As I mentioned in my previous post, I was a little desperate to find specific information about Intersil that would allow me to illustrate its shareholding when it went public.

You can skip this very anecdotal narrative which is probably above all an archive for me, but which also shows that you always have to persevere. Note that each country has a register of companies, more or less rich in information, sometimes for a fee, sometimes free. In the USA, the Security and Exchange Commission (SEC – www.sec.gov) provides access to all documents about public companies (i.e. listed on a stock exchange). In contrast, private companies (not listed on a stock exchange) are not obliged to publish any information, especially financial. (And I would add that Private Equity – of which venture capital is a part – only finances private companies, i.e. unlisted).

The SEC provides a service – EDGAR – free of charge for all documents published up to the mid-1990s, 1996 to be precise, I think. The SEC sold the pre-1996 documents for around $40-60 and then handed the service over to Thomson Reuters (then Refinitiv) a few years later – a privatization of “public service” and the price rose to $80 then $120-140 per document…

On October 4, I contacted Thomson Reuters asking for the IPO prospectuses of IDT, Lam Research and Intersil.

While I got the first two almost immediately, on October 7 I got a question as an answer for Intersil that asked me to choose a document from the following table:

The question was unsettling because Intersil was not Harris and I wanted a document dated 1972. There should not have been earlier documents.

Intersil was founded in 1967, went public in 1972 and was reportedly acquired in 1981 by General Electric (GE) and in 1988 by Harris (that’s it!) which combined Intersil with units from RCA and GE. In 1999, Harris made Intersil a spin-off which went public again in 2000… In 2017, Japanese company Renesas bought Intersil.

In explaining this situation to the SEC, a second research led them to offer me these documents:

Buying 2 documents at that price made me hesitant. So I needed more information. I contacted individuals:
– Christophe Lecuyer, author of Making Silicon Valley, Innovation and the Growth of High Tech, 1930-1970
– David Fullagar, formerly at Intersil,
– Michelle Lowry at Drexel University,
– Josh Lerner and Paul Gompers at Harvard University,
– Jay Ritter at University of Florida,
as well as institutions:
– The Computer History Museum in San Jose, CA (https://computerhistory.org/)
– The libraries of Stanford University, Harvard University
– The WRDS service at Wharton (Wharton Research Data Services), the business school of the university of Pennsylvania

Most answered even if they had no information. This is the American culture: people try to help, often by giving new names or leads. I must in particular thank Jay Ritter who wrote back immediately: “My records have Intersil going public on Jan 20, 1972 at $14 per share. The first market close may have been $12.00. But I have less information about this company than most IPOs from 1972.” then later “In another file I found that it had ticker ISIL, listed on Nasdaq, might have been a General Electric spinoff, but was VC-financed with Diebold Venture Capital Corp., RCA Corp., Sutter Hill Ventures, Bessemer Venture Partners, Mayfield II, Citicorp Venture Capital, and Small Business Enterprises (Bank America) as investors, Bache was the lead underwriter, and sold 360,000 shares at $14 per share (352,000 newly issued, with 8,000 from selling shareholders).”

Interestingly there are mixed information about 2 different IPOs not to say companies. But I had my date! January 20, 1972.

On October 11, I could contact again Refinitiv and my contact answered “Please allow at least 2-3 hours for this process.” The next day, “They need to scan the microfiche for the document of Intersil. [But] it seems that they are having trouble on finding it.” And the next day, I finally had it which made possible the next table:

Remember Bauer and Wilder have dedicated their book to Jean Hoerni : “This book is dedicated to Jean Hoerni, the inventor of the planar process; without which none of this would have been possible. Hoerni became an entrepreneur and owned about a quarter of Intersil IPO. This is uncommon and huge for a founder. You my not know the investors, this was the sixties. But Arthur Rock is a legend (an investor in Intel, Apple – see my next post!) and Fred Adler is also famous, though to a lesser extent. These were the early days of startups and venture capital, but fundamentally, everything was being invented then and the rules are pretty much the same today.

The Microchip Revolution (Final Part)

I just finished reading The Microchip Revolution about which I wrote for posts here, there and there. This is a beautiful recollection of what Silicon Valley brought to the world. The revolution began with the Traitorous Eight who looked like this when young

and like that a few years later (from the New York Times Julius Blank, Who Built First Chip Maker, Dies at 86)

Fairchild Semiconductor’s founders in 1988. Victor Grinich (left), Jay Last, Jean Hoerni, Julius Blank, Eugene Kleiner, Sheldon Roberts, Robert N. Noyce (seated, left,) and Gordon E. Moore. Credit: Terrence McCarthy

I could not finish this history witout some cap. tables, the ones of companies mentioned here, that I could build: Intel, AMD, Cypress, IDT, Lam Research. I desesperately looked for data about Intersil, but neither the SEC nor Thomson Reuters could help me. Will you?





and as a postcript on Oct 13. 2020, Micron Technology, which had every unusual local investors from Idaho with a convertible loan structure:

The Microchip revolution (part III) : the maturity

You will find part I here and part II there. If the 60s were the early days which ended with the oil crisis in 73, the maturity came in the 80s with a second crisis coming from Japanese competition.

There was still a lot of uncertainty as the authors show in the chapters dedicated to Cypress, IDT, Micron. For example:

Another example about the uncertainty around which technology was superior for memory products at the time is that in 1986, when I was a founder of a semiconductor startup company with a business plan predicated on making bipolar RAM products. This was Synergy Semiconductor. We were funded by two premier Sand Hill Road venture capital firms, Sequoia Capital and Mayfield Funds. Even these supposedly smart VC partners couldn’t predict the superiority of the MOS technology in the memory chip business. Rodgers and Cypress made the correct bet on CMOS. It is also interesting that Sequoia Capital invested in Synergy with bipolar technology and Cypress with CMOS technology, thereby covering their bets. (Synergy never went public, struggled for 10 years and was eventually bought by Micrel.)

Intel didn’t believe that they needed CMOS for their memory or processor products for years. They knew that CMOS was a more complex process, and therefore more expensive, and they were not yet dealing with the high-power limitations of their process. Intel did not switch to CMOS for memory products until 1986. [Page 260]

Entrepreneurship is the ability to face these uncertainties and also to act by taking risks:

I already knew that [Rodgers] was a special guy, very smart, in great shape, from running every day and probably a risk taker, but this was nuts [diving in a dangerous place in Hawaii]. What if the timing was wrong and he gets sucked into the tube? How will I get help, it is a 15-minute walk over lava. But he did it. And then he jumped it. He did it twice! This event defines Rodgers. He is self-assured, even egotistical, but able to back up his decisions with actions and willing to take risks even if the parameters are not totally known. Shortly after the lava leaping escapade, he quit AMD and started Cypress Semiconductors. [Page 252]

While he was still at AMD, [Rodgers] got a call from a venture capitalist who was doing reference checks on an executive and inventor while at Fairchild and who also trying to raise money to start a new business. This got Rodgers thinking: “If this guy can raise money and start a new business, why can’t I do it?” And he began exploring the possibility of doing just that. [Page 253]

This reminds one of my favorite quotes ever, from Tom Perkins the famous P in KPCB (Kleiner, Perkins, Caufield and Byers): The difference is in psychology: everybody in Silicon Valley knows somebody that is doing very well in high-tech small companies, start-ups; so they say to themselves “I am smarter than Joe. If he could make millions, I can make a billion”. So they do and they think they will succeed and by thinking they can succeed, they have a good shot at succeeding. That psychology does not exist so much elsewhere.

The Microchip revolution (part II) : the very early days

If you missed Part I, it’s here. All the culture of Silicon Valley was born in these early years. Here are a few examples.

In the early days of the semiconductor, it was mainly about high-quality research: With an absentee boss, Sherman Fairchild, on the East Coast, the group could focus mainly on doing pure research, with no boss to bug them. Their main direction came from intense competition between each other. No VC or corporation would finance anything like this now! [Page 14] The authors are right. Only Google maybe is doing it with or without VC or boss approval and peer pressure is similar.

They finally make and ship their first product in 1958, 100 transistors to IBM. [Page 17]

Jack Kilby was awarded the Nobel prize in physics in 2000 for the invention of the integrated circuit. Unfortunately Bob Noyce had died 10 years earlier and Jean Hoerni passed away 3 years earlier. The Nobel prize is never awarded posthumously. The scientific community informally agreed that both Kilby and Noyce had invented the chip and that they both deserved credit. [Page 21]

Chapter 2 is about a non-startup, Hughes Research Labs, based in Los Angeles.

We did not have stock options; few of us even knew what they were. [Page 48]

Having dynamic leaders who gave free rein to ambitious young engineers and scientists meant that the engineers and researchers were stimulated by competition among themselves rather than by management layers above, which helped create an explosion of papers and patents. However, in both cases [at Fairchild and Hughes RL], the transfer of technologies from R&D to production was not easy. Although they were distinctly different organizations, both were very large corporate structures. But in the case of HRL, having R&D and production in the same physical location meant that discussions between the two groups were quite frequent.

Another difficulty was the lack of stock option program at HRL. This definitely caused significant personal turnover, especially among the non-attached young scientists who were hearing about the new utopic world, and its lucrative stock option packages, up in Silicon Valley. [Page 67]

Chapter 3: Intersil, a lost opportunity.

Another genealogy of Silicon Valley and extracted, the impact of Jean Hoerni.

Intersil was founded by Jean Hoerni, one of the eight traitors. The early days are best described as a mix of genius and chaos. The two most versatile personalities were Jean Hoerni and Don Rodgers, the VP Sales and also ex-Fairchild. Hoerni with 2 PhDs in physics was a shy genius quite the introvert but given to unpredictable mood swings. Rodgers was an extrovert. He came from the rough and tumble, hard-drinking, hard-living Fairchild sales team of the 1960s. One of the early frustrations was the ineffectiveness of the marketing department. [Page 71]

Hoerni’s contentious and rebellious personality often appealed to the young managers and engineers who were also looking for the next opportunity and also rejected conformism and authority, in part to the traumatism of the Vietnam war.

When I [Luc Bauer] started working with Hoerni, he strongly advised me not to be blindly loyal to any company, but only to my own ambition and goals. He said that if your employer doesn’t help you reach them, then you better change companies or start your own because life is too short.
[Page 74]

But Bauer talks about a missed opportunity and the reason follows: just have a look at the revenue growth of Intersil (founded in 67, IPO 72) and Intel (founded in 68, IPO 71):

Joe Rizzi, one of Intersil founders summarized his seven years at Intersil with two words: Lost opportunity. He said that all, or most of the seven product categories could have become sizeable businesses on their own, given enough care and focus to nurture their growth.
At the time, uncertainty in the market pushed to diversity of products. Intel’s narrow product focus was a risky gamble.
[Page 102]. Intersil had $572M in sales in 2014 and was acquired by Renesas in 2017. Intel is now a $71.9B business…

Guy Kawasaki – Make Meaning in Your Company

This morning I was participating to a workshop when a debate started about why making a startup. The best answer I know is from Guy kawasaki:


A presentation by Guy Kawasaki for the Stanford Technology Ventures Program Educators Corner in the School of Engineering at Stanford University. October 20, 2004.

Guy Kawasaki is among other things the author of a great book, the Art of Start

An example of his greate advice below is how to make a 10-slide great presentation of a company pitch:
Art of Start – Kawasaki