May 11, 2002 Upshot: Entrepreneur-Friendly VCs Patty Enrado It's no accident that Foundation Capital's seven partners have many more years of operating experience as engineers or physicists than as venture capitalists. In fact, it's one of the reasons Adam Grosser joined Foundation as a general partner after successful runs as president of Excite@Home's subscriber networks division and founder, president and CEO of Catapult Entertainment. Foundation, which was spun off from Merrill, Pickard, Anderson and Eyre in 1995, focuses on three major categories: data networking and telecom, semiconductors, and enterprise software. The firm also focuses heavily on the entrepreneur. "We don't ever talk about deals or putting money to work, because we've all been on the other side of the table," Grosser says. "For us, it really is falling in love with both the project and the business prospect for the project." Approximately 75 percent of the projects funded by Foundation are in some way started by the partners, either through and "entrepreneur in residence" program, or by working with entrepreneurs on a repeat basis. "We have very personal relationships," Grosser says. "Foundation is a very familial organization, and I think our companies benefit from that." Because of the focus on entrepreneurs, about 70 percent of the firm's deals have been made at the seed and first-round levels. Foundation's fourth sits at $600 million, with a total of $1.4 billion under management. Grosser describes Foundation as "very, very, West Coast-centric." Out of the 50-plus companies currently in the firm's portfolio, only onÑin ChicagoÑis outside of the area ranging from Seattle to San Diego. The reasons are simple: Partners have a more hands-on approach with local companies, and a network is already established. The firm invests in two projects per partner per year, allowing for a schedule that's more reasonable and favorable to both Foundation and its clients. Says Grosser of his role as a VC and mentor: "My bias has always been to look at the companies, to really work hard, and to work hard with my eyes open to try to find ways to make things work. I really have such a love of technology and respect for people who are willing to put their lives through what it takes to be a good entrepreneur. My bias is always to say, ÔI'm going to walk through a wall with these guys to try to find a way to make this work."