Keith Larson, vice-president and managing director of semiconductor and data technology producer Intel’s corporate venturing subsidiary, Intel Capital, has shared the highlights of his career with Global Corporate Venturing after retiring in April.
Having spent nearly 23 years at the unit, Larson was one of five voting executives on the investment committee responsible for approving all its investments, before deciding to retire two months ago.
During that time, Larson has witnessed, and been partly responsible for the emergence of corporate venturing. He firmly believes that the Intel Capital team has led by example, laying down the foundations for the rest of the industry, especially with regard to sustainability investing.
“For any investment to have any sort of strategic impact, that company needs to survive and thrive,” Larson told GCV. “In the early days corporates were chasing the technology and not really thinking through the commercial aspect of it. They were backing companies that were not financially stable or viable.
“That is something that really sustained Intel Capital and created a model for the rest of the corporate venturing industry to follow, when you now see how other people are becoming successful in corporate investing compared to 30 years ago.”
Larson cited that focus on sustainability along with its parent’s size and strength as the reasons Intel Capital was able to create a long-term strategy. That approach has helped Intel nearly quadruple its annual revenue from about $20bn in 1996 to $70.8bn in 2018.
Prior to joining Intel, Larson had been a general partner at venture capital firm InterVen Partners for nine years up to 1994, having previously been chief financial officer and controller at First Interstate Capital.
One of the most important skills Larson developed at Intel was the ability to develop an investment thesis for a given technical and market domain prior to proposing an investment.
“Constructing an investment thesis was something we developed over time at Intel Capital and was very important to Intel Capital’s sustained financial and strategic success,” he said. “Essentially, an investor can be much more effective by using critical thinking and testing out planned investments and what drives a value chain before proposing a single investment.”
Rearding personal successes, Larson noted Research In Motion, the smartphone maker that rebranded as Blackberry and which at one time had a market capitalisation of $83bn, was his first investment at Intel, adding: “That was an interesting one and was actually tied fairly close to Intel, more than people knew at the time as it was actually the processor that was in Blackberry.”
Another personal success for Larson was Intel’s investment in US-based intelligent switch maker Berkley Networks. He said: “This investment was an early example of how Intel thought through strategic investing to create a visibility into judging whether an investment makes sense as acquisition, and was the subject of a Harvard Business School case study.”
What sets Intel Capital apart from the rest of the industry is Intel’s ecosystem and network, according to Larson, and they play an extremely important role in adding value to prospective investments. Intel is a supplier and advisor to some of the largest companies in the world, all of which are looking for new products and technologies to use in their businesses.
“In addition, Intel is an outstanding resource for working with companies to assist them in developing, trialing and driving standards for their technology,” he added. “Those are a just a couple of the many ways Intel Capital uses Intel’s network, ecosystem and resources to add value.”
Larson also highlighted the importance of syndicating with other investors as a way to achieve better results. When a new investment is being considered, Intel Capital proactively considers which co-investors provide the most value to the company and to Intel Capital itself.
“Having other smart, experienced investors around the table improves the outcome,” he said. “This is especially true when those investors are other corporate strategic investors that can add value in ways that are complementary to Intel Capital’s value creation.”
Larson describes Intel’s proposition for portfolio companies as unique, and something that traditional venture capital firms cannot provide as they do not have access to the breadth and scale of customers that Intel does.
“Similarly, a traditional VC does not have the array of technologists, salespeople and others to help companies develop or standardise technologies and products.”
Despite retiring from his position at Intel, Larson will remain on the board of directors for water systems producer Northwest Pipe Company.
Larson also plans to announce one advisory position with an artificial intelligence hardware developer in the coming months and is opening to joining two or three other boards, for public companies or select larger private businesses.