DECIBEL: THE EXPONENTIAL POWER OF ENTREPRENEURS

Chris-Conroy-Photography-5934.jpg

The Decibel is a unit of measurement named after Alexander Graham Bell, who is commonly regarded as the father of modern communications.  Its original use was to measure the strength of sound waves sent across telephone lines. Over 100 years later, it is widely used in science and engineering to describe exponential changes in the power of sounds or signals sent through a network.

Today I am excited to announce Decibel, a new early-stage venture capital firm created in partnership with Cisco, a company widely known for its central role in building our networked world.  This is the first time a major tech company has co-founded an independent firm outside of its corporate structure in order to focus on the unique needs of today’s entrepreneurs and founders. By starting with a clean sheet of paper and pushing conventional boundaries, Decibel combines the speed, agility, and independent risk-taking traditionally found in the best VC firms, while offering differentiated access to the scale, entrepreneurial talent, and deep customer relationships found in one of the largest tech companies in the world.  This approach is an industry first and provides a unique way for entrepreneurs to get access to unparalleled resources at a time and stage when they need it most.

I started Decibel with a belief that entrepreneurs need more than just capital, they need unfair advantages and mentorship at the earliest stages.  My conviction is deeply rooted in personal experience - I started my first company in 2001. As the first internet bubble had burst, the VC industry was in decline and largely attracted only experienced founders or operators - those that had a passion for entrepreneurship in spite of the cyclical low for the tech industry.  Funds were smaller and every investment required conviction at the earliest stage before there was product-market fit or revenue traction. There was a culture within the best firms that the first couple of years ultimately set the course for a company’s long term trajectory and a belief that there was nothing more important or impactful as an investor than to be involved in those formative years.  

After successfully exiting my company, I spent 12 years as a venture capitalist and served alongside dozens of entrepreneurs at every stage. Through this time I have participated in one of the most exciting expansions of the venture industry as venture firms, private equity firms, hedge funds, and sovereign wealth funds have all expanded their reach in the venture ecosystem.  The rising tides have lifted many boats, but on the ground all entrepreneurs will tell you that the early road to success is unrelentingly steep and unpaved, competition is as fierce as ever, and founders have never felt more strongly that they need investors that are meaningfully involved and offer more than just money if they are going to build a sustainable company.

I was fortunate to find in Cisco a leadership team and company that shared the same vision.  Together, we took a clean sheet of paper and imagined what the entrepreneur of the future would want from an early stage investor, and asked ourselves how we could evolve the conventional venture capital and corporate investing models to create a unique and differentiated investment firm.  Together we’ve identified three unique ways we can have a large impact on founders.

Large “Conviction” Investments at the Earliest Stage.

Though early-stage angel investing has exploded in recent years, very few investors make conviction-based bets on founders before their companies have seen significant traction. What many great founders with promising ideas need is a meaningful investment of both resources and capital, as high as $5 M to $15 M, at the earliest stage when they need the most help hiring great people, building their product, and getting access to customers.  We want to invest alongside angels and VC partners in the ecosystem who share this same view, and want to have an impact on companies at the earliest stage.  

Experienced Founders Helping Founders.

Though there are many ways to get help as a founder, I have found that there is nothing more impactful than getting advice and wisdom from an experienced founder who’s direct, empathetic and authentic. Entrepreneurship is not like most jobs – by definition, it is a unique journey that is highly volatile and filled with unexpected challenges.  We created Decibel with the wisdom, guidance, and support of Cisco’s incredible community of recently-acquired founders (some of their stories are here). This group’s success created >$10 Billion in value on paper, but the invaluable sum of their collective experience is what we believe yields exponential returns to our future portfolio companies.  Today, there are over 40 recently-acquired founders at Cisco willing to help entrepreneurs, and as one of the most active acquirers in the tech industry, we expect this network to grow meaningfully every year.

Unique and Early Access to Innovative Customers.

Most early-stage founders invest a lot of time trying to find and engage with the right customers in order to validate their product design and secure their first paying, referenceable customers.  It is terribly time consuming for entrepreneurs, and many do the early prospecting and selling themselves. Cisco has long been known for its customer-centric culture with over 750,000 customers, and many view Cisco as a long term partner in discovering new innovation.  We want to amplify the voice of the entrepreneur through this network, and give them unrivaled access to the customers most interested in getting early access to the most innovative technologies and start-ups.

Finally, I believe strongly that working with founders requires long term relationships built on trust above all else.  We created Decibel as an independent firm to ensure that we can always serve the interests of entrepreneurs. As a well-capitalized fund, we are structured as a long term partner to provide meaningful and reliable capital expected for the 8-10 year journey required of successful start-ups.  Our independence additionally ensures that our personnel, investment, and governance decisions are made autonomously, and enables us to protect all information shared with us by the entrepreneurial community at all times. Integrity is our first priority, and we will be a trustworthy partner to entrepreneurs without condition.  When in doubt, founders come first. Period.

Starting a company requires the courage and conviction of an army to challenge conventional wisdom, and starting a new venture firm is no different.  It has taken hundreds of people at Cisco and throughout the entrepreneurial community to help create the exponential power of our network, and we know there is so much more we can do together.  Thank you to all who have partnered with us to launch Decibel - we look forward to the opportunity to share what we’ve built.

Jon Sakoda, Founding Partner

azhar hashem