Jim Smith » General Partner, Mohr Davidow Ventures

Session: FOLLOW THE MONEY, PART IV: THE INVESTORS WEIGH IN (Presented by Forbes)

Jim Smith came to Mohr Davidow in 1999 after a successful career as a hardware designer. “A startup is like a puzzle,” Jim says. “There’s no greater reward when the pieces come together.” Jim invests in hardware, software and services startups that will provide the infrastructure for what Mohr Davidow calls “the data deluge.”

Mohr Davidow has long had an interest in “big data problems,” ways in which companies can make better use of the mountains of data collected and stored during the course of doing business. Mining for usable data in those vast repositories has been called the Holy Grail of computing. The Internet has only exacerbated the problem and made the potential solution more tantalizing.

“The first five years of the Internet was all about connecting people,” Jim says. “Now everyone’s connected and offering tons of information on their likes and dislikes. Passion for technology is certainly a key to startup success, but great companies are the product of entrepreneurs who are magnets for other great people.”

Mohr Davidow resists what venture capitalists call a “drive-by” strategy of making token investments in areas deemed “hot” according to conventional wisdom. The firm prefers to take a higher-risk, but greater reward approach to investing. It prefers investing in early-stage startups offering a unique technological solution to long-standing problems. Jim often enlists potential customers to help entrepreneurs better understand their needs. “We can get large customers to talk to our companies because we have credibility with them,” he says. “These customers have seen the benefit of working closely with our companies.”

Mohr Davidow also defines its investment areas as opposed to taking a more general approach. “A lot of firms claim to have focus, but few live up to it,” Jim says. “It can be hard to stay away from me-too investments. They seem like a safer bet. Of course, the greater rewards go to those who take the greatest risks.

Received a doctorate in electrical engineering and a master’s degree in industrial management from Stanford University. He also earned a bachelor’s degree in computer systems engineering and a master’s degree in electrical engineering from Stanford.