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What is El Dorado Ventures’ track record? |
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| El Dorado Ventures is a top-tier early-stage venture capital firm with a two-decade track record of successful early-stage technology investing, including early investments in Cyras Systems, EarthLink, Efficient Networks, Novellus and NuSpeed Internet Systems. Numerous EDV portfolio companies have gone public or been acquired by major technology companies such as Ciena, Cisco Systems, nVidia, Siemens and Texas Instruments. El Dorado Ventures has an enviable record of successful venture capital investing and has consistently ranked in the top quartile of venture capital funds. |
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Who are some of the successful entrepreneurs EDV has backed? |
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| El Dorado has worked with many successful entrepreneurs, including Sky Dayton of EarthLink; Mark Floyd of Efficient Networks; the founding team of Cyras Systems; Bob Graham of Novellus; and Ken Gardner, co-founder of Sagent Technology and ReportSmith. |
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In which types of companies and industries does EDV invest? |
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| El Dorado specializes in making investments in technology start-ups, with a particular emphasis on semiconductors and systems, communications, software and services. |
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What's different about El Dorado Ventures? |
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El Dorado Ventures has focused exclusively on early-stage venture capital investing since 1986, with an emphasis on information technologies. The firm understands the unique nature of technology startups and has helped scores of entrepreneurs build their businesses. All of the firm’s investment professionals have extensive knowledge about the technology sectors in which the firm invests.
The firm values long-term relationships, as demonstrated by the large number of returning entrepreneurs the firm has worked with at multiple start-ups.
The firm prides itself on being an active investor, helping its companies form the right management teams, build their businesses, create strategic alliances, plan for the future and troubleshoot problems as they arise.
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At what stage does El Dorado typically invest? |
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El Dorado is an early-stage investor, meaning it makes investments in newly and recently formed companies. The firm’s initial investment is typically either a Seed or Series A financing round.
If EDV believes strongly in the founding team and its vision, the firm may provide seed funding to commercialize an idea or technology concept. As an early-stage investor, the firm often invests before there is a complete management team or a finished product.
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How much does EDV typically invest in a company? |
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| When the firm makes a Seed Round investment, it typically ranges between $250,000 and $1 million. Series A financings usually range between $2 million and $5 million. The firm continues to be a key investor in subsequent rounds and reserves capital for follow-on financing. |
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How many companies does EDV fund annually? |
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| The firm invests in approximately six new companies per year. |
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Does EDV invest outside of California? |
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| Yes, but not often. The firm believes that it is important for early investors to be located near their portfolio companies, to be able to provide timely and consistent advice and support. |
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Does EDV prefer to lead a round of venture capital investment? |
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| EDV typically acts as the lead or co-lead investor when it makes its initial investment in a company. |
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Will EDV invest in a company even if it is not the lead or co-lead investor? |
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| Yes, but entrepreneurs usually look to EDV to play the role of lead early-stage investor. |
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Will EDV make an initial investment in a later-stage company? |
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| Yes, but only in special circumstances. |
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What does EDV look for when evaluating potential investments? |
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El Dorado invests in talented, passionate and experienced entrepreneurs developing differentiated technology to meet a large untapped need in a major or emerging market.
The firm seeks entrepreneurs with the proven ability to rapidly build a successful company; a product or concept that will be first-to-market, differentiated and defensible; a potentially large, highly profitable market that currently lacks a dominant player; and a perspective on where an industry sector is headed that is compatible with the firm’s views.
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How does the investment process work at EDV? |
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The firm learns of new investment opportunities from a variety of sources, including its network of technology industry contacts, its proprietary Technology Partner Network, entrepreneurs the firm has previously funded, and other sources. Oftentimes, entrepreneurs seek out El Dorado Ventures, or are referred to the firm, because of El Dorado’s consistent record of funding and supporting successful technology entrepreneurs.
Once EDV has determined that it is interested in considering an investment in a particular company, EDV invites the company’s management or founders to attend an EDV partners meeting and make a short presentation. This gives EDV a chance to make an early evaluation of the company and to discuss the company’s prospects with the key executives.
If EDV believes strongly in the founding team and its vision, the firm may invest before a product is developed or before a complete management team is in place.
After the initial meeting, if EDV decides to continue the investment process, the firm seeks additional information from the company and conducts its own due diligence in the marketplace. EDV typically makes a decision to invest within 60 days. Because the firm concentrates on early-stage investing, its initial investment is usually either a Seed or Series A financing.
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Are there any sure-fire deal killers? |
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El Dorado has significant experience evaluating potential investments and the firm’s investment professionals have developed a keen sense of what will work and what won’t. Sure-fire deal killers include: - Pitches involving business that will operate in sectors or industries in which the firm does not invest. The firm invests in technology companies in the following sectors only: communications, semiconductors and systems, services and software.
- Me-too products or services. The firm seeks investments in new and highly differentiated technologies and rarely invests in markets where there are already established leaders.
- Geographic incompatibility. El Dorado makes most of its investments on the West Coast.
- Inappropriate business structure. As a venture capital firm, El Dorado typically invests by acquiring a large equity stake early in a company’s life cycle, with the expectation that at a later date, the company will go public or be acquired. The firm does not invest in mature companies or those with non-corporate capital structures (such as partnerships or sole proprietorships).
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After making an investment, what does EDV do to support the growth of its companies? |
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Entrepreneurs seek El Dorado Ventures as a venture capital investor because the firm has a strong and proven track record of helping its portfolio companies grow into the enterprises they are striving to become.
The nature of that assistance varies with the needs of each company. The firm often helps companies recruit and build their management teams, consults on emerging strategic issues, provides resources to resolve technological issues and assists with venture capital and other financing.
EDV’s general partners maintain a vast network of contacts in the technology sector for entrepreneurs to draw upon. In addition, the firm’s Technology Partners play a powerful and unique role in consulting with portfolio companies and leveraging their own networks on behalf of portfolio companies.
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Does an EDV partner always join a company’s Board of Directors when EDV makes an investment? |
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| Yes, in most cases. |
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What is the function of the Technology Partner Network? |
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| EDV’s Technology Partner Network consists of technology industry luminaries who have been invited to invest with El Dorado as special limited partners. EDV’s Technology Partners play an active role as strategic consultants to EDV and its portfolio companies. They often help El Dorado by recommending potential investments, helping to conduct due diligence on potential investments, and consulting with portfolio companies after the firm makes an investment. |
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Who are some of EDV’s Technology Partners? |
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| EDV’s Tech Partners include Gordon Bell creator of Digital Equipment Corp.’s VAX computers and currently with Microsoft; Vint Cerf, co-designer of the TCP/IP protocols and commonly called “The Father of the Internet”; Mark Leslie, former Chairman and CEO of Veritas Software; and Maynard Webb, COO of eBay. |
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What’s the best way to submit a business plan to EDV? |
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| The best way to submit a business plan to EDV is to approach the firm through a technology industry professional with a connection to the firm. If you do not have such a contact, you can send a business plan by email to bizplans@eldorado.com or by mail to the firm’s mailing address. Please read our Terms of Use before submitting a business plan. Unfortunately, because of the large volume of proposals received, the firm cannot respond to each one personally, but all proposals are reviewed. |
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