GSB | Chicago: Venture capitalist Kathryn Gould likes the thrill of building businesses

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EX-PHYSICIST GOULD LIKES THE MOMENTUM OF BUILDING BUSINESSES

SOME EXECUTIVES are happy running stable, secure businesses. Kathryn Gould isn’t one of them. She prefers the thrills and chills of building a business from scratch.

“I really like the passion, the excitement, the fear of the unknown,” says Gould, ’78. “I like figuring out the answers and strategy. Once you know the answers, it’s just turning the crank, and there are people who enjoy that and do it better than I do.”

As a founding partner in Foundation Capital, Gould gets her fix of risk and reward daily. Foundation is an $80 million Silicon Valley venture fund that has currently invested in 14 high-tech startups. The physicist turned venture capitalist blends her technical background, marketing experience, and skill at picking leaders to size up entrepreneurs and their business plans.

“I invest in the vision and technology. At the early stage when I get involved, there aren’t any numbers to analyze,” she explains. “What I like about this end of the business is that my average investment makes 12 times its money, and a good one makes double that. At a later stage in the business, it’s really hard to get that kind of return.” She is, she admits with a laugh, motivated not only by uncertainty and challenge but by the opportunity for a big score.

Gould left Argonne National Laboratories in the mid-1970s to put her physics degree to work at Bell & Howell’s optical labs. Soon, she recalls, “I realized product managers were having more fun, so I became a product manager.” She enrolled in the GSB to gain the business fundamentals she needed, and was delighted that the Evening Program allowed her to work and study–“to have my cake and eat it too.”

She acquired her taste for start-ups at one of the wildest and most successful–Oracle Corporation. She joined the fledgling computer firm in 1982 as its first vice president of marketing. “At Oracle, we moved so fast. I was 10 times as productive as I had been, and was working with people who were like-minded. It was obvious that entrepreneurial companies have something that big companies don’t.”

Oracle taught her that she likes to build companies, not run them; when the company was stable and growing, Gould left, well before the initial public offering that made many millionaires. She holds no regrets. “I wouldn’t fit in at a big company. At Oracle, I wasn’t motivated by adrenaline anymore.”

While she debated her next career move, she started Venture Management, her own executive search firm, in 1984. While fitting people into leadership positions, she met a lot of venture capitalists. In 1989, she became one, joining Merrill, Pickard, Anderson & Eyre, which ultimately managed $300 million and backed 49 IPOs. She and two Merrill partners spun off Foundation Capital in 1995.

Gould often evaluates ventures so early that “it’s just three guys and an idea. The potential is not obvious, so I have to do a lot of thinking and homework.” What she is looking for when gauging proposals is smart, hard-working people, strong technology, and, most of all, a great market opportunity.

Success depends on keeping the right people in the right roles as the business evolves. “Some entrepreneurs think they should be CEOs when they really should be something else. There are CEOs who, like me, are better at building a business than running it,” she says. “Sometimes it’s time for the startup CEO to leave. Different skills are needed along the life cycle of the business, and one of my jobs is to predict that. It’s a hard thing to do.”

An often hectic schedule made Gould give up flying, but she flexes her schedule to make time for her two passions: her son Alex, 9, and the violin. And while she no longer takes to the air, it’s clear that professionally, she’s flying high and having fun.

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PLEASE USE THE LINKS BELOW TO BROWSE FALL CLASS NOTES BY YEAR... 1930-39 \| 1940-49 \| 1950-59 \| 1960-69 \| 1970-79 \| 1980-89 \| 1990-93 \| 1994-97 \| XP/IXP



		EX-PHYSICIST GOULD LIKES THE MOMENTUM OF BUILDING BUSINESSES SOME EXECUTIVES are happy running stable, secure businesses. Kathryn Gould isn’t one of them. She prefers the thrills and chills of building a business from scratch. “I really like the passion, the excitement, the fear of the unknown,” says Gould, ’78. “I like figuring out the answers and strategy. Once you know the answers, it’s just turning the crank, and there are people who enjoy that and do it better than I do.” As a founding partner in Foundation Capital, Gould gets her fix of risk and reward daily. Foundation is an $80 million Silicon Valley venture fund that has currently invested in 14 high-tech startups. The physicist turned venture capitalist blends her technical background, marketing experience, and skill at picking leaders to size up entrepreneurs and their business plans. “I invest in the vision and technology. At the early stage when I get involved, there aren’t any numbers to analyze,” she explains. “What I like about this end of the business is that my average investment makes 12 times its money, and a good one makes double that. At a later stage in the business, it’s really hard to get that kind of return.” She is, she admits with a laugh, motivated not only by uncertainty and challenge but by the opportunity for a big score. Gould left Argonne National Laboratories in the mid-1970s to put her physics degree to work at Bell & Howell’s optical labs. Soon, she recalls, “I realized product managers were having more fun, so I became a product manager.” She enrolled in the GSB to gain the business fundamentals she needed, and was delighted that the Evening Program allowed her to work and study–“to have my cake and eat it too.” She acquired her taste for start-ups at one of the wildest and most successful–Oracle Corporation. She joined the fledgling computer firm in 1982 as its first vice president of marketing. “At Oracle, we moved so fast. I was 10 times as productive as I had been, and was working with people who were like-minded. It was obvious that entrepreneurial companies have something that big companies don’t.” Oracle taught her that she likes to build companies, not run them; when the company was stable and growing, Gould left, well before the initial public offering that made many millionaires. She holds no regrets. “I wouldn’t fit in at a big company. At Oracle, I wasn’t motivated by adrenaline anymore.” While she debated her next career move, she started Venture Management, her own executive search firm, in 1984. While fitting people into leadership positions, she met a lot of venture capitalists. In 1989, she became one, joining Merrill, Pickard, Anderson & Eyre, which ultimately managed $300 million and backed 49 IPOs. She and two Merrill partners spun off Foundation Capital in 1995. Gould often evaluates ventures so early that “it’s just three guys and an idea. The potential is not obvious, so I have to do a lot of thinking and homework.” What she is looking for when gauging proposals is smart, hard-working people, strong technology, and, most of all, a great market opportunity. Success depends on keeping the right people in the right roles as the business evolves. “Some entrepreneurs think they should be CEOs when they really should be something else. There are CEOs who, like me, are better at building a business than running it,” she says. “Sometimes it’s time for the startup CEO to leave. Different skills are needed along the life cycle of the business, and one of my jobs is to predict that. It’s a hard thing to do.” An often hectic schedule made Gould give up flying, but she flexes her schedule to make time for her two passions: her son Alex, 9, and the violin. And while she no longer takes to the air, it’s clear that professionally, she’s flying high and having fun.
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