If you want VC funding, show 'fire in the eyes'

Juniper Networks founder sets up a $50M fund to back new companies

Juniper Networks Inc. this year created a venture capital fund to encourage development on its Junos platform, which provides a common language across the networking company's routing, switching and security devices. Other companies and government agencies, including the CIA, have established venture capital funds. But the person who started this fund, Pradeep Sindhu, is the chief technology officer and founder of Juniper, who began his company with VC backing in 1996.

In an interview with Computerworld, Sindhu outlined the reasons he believes in the venture capital approach and what he looks for in a funding proposal. The project, called the Junos Fund, is designed to spur innovation on Juniper's platform. The following are excerpts from the interview, including Sindhu's views on venture capital funding, the state of cellular networks and other topics.

Why not just take the $50 million and apply it as extra money to your own R&D effort? It would be like doing the development internally. We have only 7,800 employees, maybe 50% of them are developers, and the number of developers available outside is much larger. And what the Junos Fund does is it gives us a multiplier effect, which is far bigger than applying the same number of dollars internally.

What has been the response? We have gotten a lot of interest from potential start-ups and venture firms wanting to work with us.

How do you determine success? Success in this space is measured always, at the end of the day, as whether the rate of innovation has actually increased over and above what it used to be. We will measure that by productivity increases. We will not measure this by new and interesting applications. We will measure this by the fundamental problems of service providers and enterprises getting solved -- those are the ways that we determine success.

What's the time frame for seeing results? This is a medium- to long-term endeavor. If you just look at the time that it takes for a company to get funded, to develop its products and then to go and test it in the marketplace, you are talking about a three-to-four-year minimum, so for an effort like this to see fruit, you have to look over at least a five-year period.

What are some of the most important qualities in a VC funding proposal? The quality of the people is one of the most important factors. If you talk to a venture capitalist, they will tell you that one of the most important things to look for is the people.

And what constitutes quality? Fire in the eyes, the quality of the idea, how disruptive potentially it can be. It's hard to pin down what constitutes innovation, but it's advancing the agenda of the industry, really, at the most rapid rate possible and doing things in a new and unforeseen way.

Is that something that you can easily recognize? Not always. There is no formula that I know of that you can cause to have innovation happen. But what I do know is that when the economic incentives are aligned properly, that you can have innovation happening at a very rapid rate, and the best way that I know of is the venture community, which is why we have taken this approach.

Have you started making awards yet? We have a few, but the level of interest is very high. We are just being careful and methodical at this point.

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