 This is Dave Vellante of Wikibon.org. This is SiliconANGLE TV's continuous coverage of HB Discover, and we've got a surprise guest, Charles Curran of Valhalla Partners, stopped by Charles. Welcome to theCUBE. Good to see you, boys. Good to see you again. Thank you for spending some time here. Charles, really active in venture capital. Of course, storage is your specialty. And I want to start off, tell the crowd a little bit about Valhalla. Sure, real quick, we'll have a... Yeah, so Cumula, somebody referred to as son of a... What's that? Oh, nobody helped me. Guys. Let's start again. Hey, no, you can get that through me. He'll hear you through me, but just put that on. Where do I put it? Just like that. There you go. Juice me up. All right. There you go. We'll start for him again. No, they could hear you through my mic, but... No, we're just starting. But let's repeat that, though. So let me reset. So we're here with a surprise guest. Charles Curran stopped by tech team taking a nap. That's okay, they're doing a great job here. And so tell us about Valhalla. Start there. Okay, Valhalla is a half a billion dollar venture firm. We're based in D.C., we invest all over the U.S. We're stage agnostic, we're focused on two sectors, next-gen infrastructure, which I run, with help from FARA, who hopefully will be here in a minute. And she's busy with some HP, big wigs. And we do a lot of data storage stuff, left-hand networks acquired by HP, of course. Been very successful for them. Nervonix, partner of HP, SolidFire. And Nervonix both have some left-hand alums. And Cumulom, which is founded by some of the key technical people from Icelon. Son of Icelon, right? No comment. Stealth. I would say it's founded by some people who did good things in Seattle. It's so much, but you're happy about that to you, right? We are very happy, and others are happy, and we're loving it. What's the nuance there? Can you talk about that? I mean, you guys doing series A stuff. Sure, well, I'll share the strategy. So we had a lot of success with Dave Wright at SolidFire, where he was an experienced entrepreneur, two wins by the time he was in his late 20s. He built and sold jungle discs to Rackspace. And he went bolder and has about 50 people, almost half of whom came from left-hand. Left-hand, as you probably know, pioneered scale-out sands. And they had the best technical team in the scale-out sand business. Ecologic gets them wonderful things on ease of use and channel. God bless Paula and JJ in their new project. Hat tip, JJ. And left-hand had some really great scale-out technology. So he hired a core tech team from left-hand other places and has a world-class, all-flash, service-fighter-focused, primary storage systems play. And we basically took that model that is working for us in Boulder to Seattle and are building a team with veterans from some great places. So it seems like the, I mean, I wonder if you could talk about that strategy because it seems like you got, as an entrepreneur, you don't have a ton of choices, right? You've got friends and family that are going to raise a half a million bucks. Or are going to raise, let's say, maybe a million dollars, maybe two million dollars from Super Angels. And then maybe it's, you know, eight million from Andreessen Horowitz or something like that. And those are kind of the three venture products for an entrepreneur to choose from. But you guys are sort of taking a different strategy there, right? So the big data stuff and the storage stuff that Wikibon is doing, by the way, hats off to Wikibon and your growth. You've had a fantastic year. Appreciate it. We're doing well. I think you guys are probably doing better in terms of growth. You know, these projects, Vertica, Green Plum, Left Hand, Isilon, they raise 50, 100 million dollars. So the seed business hasn't really touched them. We're somewhat, we think, pioneers in doing large-scale seed investing and infrastructure projects. Seed investing is incredibly mature in the dot com space because five kids out of Stanford can go build the new Angry Birds or Instagram. You can build an Instagram on seed funding. You might ultimately raise eight million from Andreessen Horowitz as they did and then sell for a billion to Facebook. God bless them. But that's a very robust and proven model where you can get a product to market on half a million, a million dollars. In storage, it might take 50 million to get a product to market and 100 million to get to break even. That may be coming in with Extreme I.O. we'll probably talk about. But our theory is that a $2 million seed deal at a strong price for proven teams from the big wins from yesteryear is a good kind of catalyst to bring people together to build something new. And we're seeing A-Rounds for really concept-stage companies coming in around $20 million at valuations that are. Nice. Respectful to the entrepreneur and their wonderfulness. Yes, bubble-licious. So, but now. That's not a bubble. It's fully reflecting the wonderfulness. Well, look at the Facebook IPO, right? I mean, I think there's a dose of reality in that. I think that's good. Yeah. You know, I think if it were a true bubble, you know, people would just ignore it. Oh, they want a price of $38, $40, $50, whatever, you know, and there'd be appetite for it. And there wasn't. It's almost like the market said, wait a minute. I know there was Europe involved, but I thought that was a healthy sign. What do you think? Well, here's my advice. You guys cover a lot of the M&A deals and you cover it better than probably anybody in storage and big data. Those deals are all working. Green Plunk is working. Vertica is working. Data Domain is working. Left-hand is working. Ecologic is working. Three-part is working. Isilon is working. Most of those storage ones are a billion dollars of revenue two, three years after they got bought. So what's happening is forward pricing. So now EMC realizes that their core business is going to be displaced by flash. God bless Fusion IO. I know you just had them here. And maybe I heard a senior executive from a company that were named Nameless said to me last night that by 2015, there may be no more mechanical drives. It may be an all-flash world. 2015, an all-flash world. EMC is smart. And if Symetrix is going away and Centera is going away and if three-part is going away and left-hand, which we love, is going away because you can't build legacy storage architectures and smash, flash together with it. You need to build all-flash architectures from the ground up, like SolidFire and others. So EMC is smart. They realize that. And they bought Extreme IO, which will be the first of many IPOs or M&As in let's call it the all-flash or mostly flash space. Yeah, so we had Rich Napolitano on theCUBE at EMC World and I threw out the number, you know, 340 or whatever it was. He was like, we didn't announce the number. It was less than that or whatever it was. It was a big number, like you said, forward pricing. And that is smart, I think. It's a recognition that the traditional architecture is not what's going to take us into the next, you know, 15 years. EMC was not just smart enough to buy it, but they were also smart enough to invest in the company early and build trust and relationships that got an inside track to acquire the company. So congrats, Matt Elton, Rich. The boys, you did well with that one. So some of your, one of your companies, you know, you mentioned Left Hand. We had David Scott on theCUBE earlier, you know, 2.4 billion. You saw a huge wealth, I couldn't, I can't remember a wealth creation of that magnitude, data domain, Isilon, Compellant, 3PAR. Do you think flash will be as large? It'll be bigger and it'll be faster. You know, Equalogic was probably the fastest storage company at 100 million revenue. Data Domain made it there a year faster and Fusion I.O., just here on theCUBE, made it two years faster. And there will be others who are faster. So Extreme I.O., Solid Fire and Pure, if they, well I guess Extreme I.O. is no longer independent, they have the potential to get to 100 million revenue even faster than Fusion I.O. Because customers, OEMs, channel partners, vendors, analysts, thought leaders are realizing that some of these apps need the 10x demon speed of flash and flash is becoming mainstream. It's no longer a science project, it's being used by everybody. It's not just Facebook, it's JPMorgan, it's being used by everybody, it's market. And there's a lot of opportunities. I mean, Fusion I.O. is at one end of the spectrum and you got consumers, right? That's driving the economics and then you got, you know, you see Violin's booth out here. We had Don Bacillon and, you know, 800 million dollar valuation. He's raised what, 160 million I think? He's done well. Good job, Don, good job, Peter. Yeah, I mean, hey, that's right. Highland Capital is in that deal, right? Who's not in that deal? SAP Ventures is in that deal. Again, hats off, Don, hats off, Peter. But so I want to go back to the conversation we had earlier. A lot of entrepreneurs are afraid to take VC money at the seed level because they're afraid that if the VC doesn't do a follow on around, that sends a bad signal. But you guys have been able to successfully participate in that early run. Why is that? That's a great point. Okay, so there's two things. If you look at companies like Left Hand and our portfolio or Equalogic, Three-Par, Isilon, these are companies largely founded in the 99 to 2001 timeframe that raised A round money and their B and C rounds happened in the 2002, 2003 timeframe where founders were crushed economically or let's say heavily diluted economically and often lost power to the suits. Guys like me. And the founders don't like that. And more importantly, the teams don't like that. The hundred guys at Left Hand who helped build Chambers and Mark Hayden and John Spires builds NIQ, they don't want to work for a hired gun. They want to work for a fountain. The solid fire guys want to work for Dave Wright. The cumulow guys want to work for Pete Godman. So the extreme IO guys like working for their founders. And so the moral of the story is we have been able to build trust with some really proven management teams who've already had multiple billion dollar exits to say that both in terms of economics, the high-priced seed round and the high-priced A round, large high-priced A round, and in terms of power, we're going to be able to provide three X the ownership to founders at liquidity than the old models. And that's not because of some magic trick. It's because of confidence. We have done the, I think, the most expensive seed investment ever in storage. And I believe we will probably have five term sheets that will probably be the most expensive series A in the history of storage soon. No comment on the company. Absent the 99 timeframe. I don't remember what Sariva did there, Zad, and those guys. Yeah, that stuff doesn't count. It doesn't. And it makes sense. And I'll tell you why it makes sense. You asked about the venture model. The large investors in venture, the pension funds, universities, the fund of funds, they're getting literally 95% of the profits from venture investors from 1% of their investments. Twitter, Facebook, Groupon, even with the slide, LinkedIn, Zynga, a lot of them in dot coms. So even these two and a half billion exits, that's like a pebble in the ocean compared to Facebook. And so all of the focus from our bosses, the LPs who invest in venture is, find the trillion dollar hit, find the hundred billion dollar hit, find the 10 billion dollar hit. And where do you look? You look for the guys who built Isilon, the guys who built Data Domain. There's multiple companies founded by the core team from Data Domain. They're all doing great. Left hand, equal logic, others. So it makes sense. So you have to build trust. You have to demonstrate that you're going to build the company around the founders, both in terms of power and economics. And not all VCs are comfortable with that. I think that point about trust is key because remember a year, year and a half ago, you had a situation where some of the VCs were collaborating with super angels that were acting as scouts and they weren't transparent about it. That whole thing blew up. And a lot of entrepreneurs said, whoa, trust this model. That's why you got to love the Andreessen Horowitz play because you got entrepreneurs, they're friends of entrepreneurs. Now of course they made a huge move with Skype. They said, okay, we're going to, they raised 50 million, right? They said, okay, we're going to do seed money. They got to buy in Skype and then selling it for a huge amount to Microsoft, brilliant move. But that model is interesting. And I wanted to ask you about what you thought about Chris Lynch going to Atlas Venture. What's your take on that? He's an entrepreneur, entrepreneur friendly, sprinkling money around, big data companies back. He ends up at Atlas Ventures. Is that a play out of the Andreessen Horowitz playbook? It is because Chris Lynch is probably one of the few guys on the East Coast as aggressive as Peter and Ben and Mark and Frank Scott at Andreessen Horowitz. And he will do well. And his partners at Atlas, Ryan Moore and Jeff Fagan are aggressive and he will do well. And entrepreneurs trust them, right? Entrepreneurs trust him because he's an entrepreneur. He founded a copier built with his bare hands. He's had success with Cheng Wu and other founder, running sales forum at Aeropoint. He's been a successful entrepreneur and obviously Vertica. So I think that's the type of guy who brings energy. He brings recruiting. He brings CEO experience. He brings relationships with OEMs. Entrepreneurs are getting savvy and they are working us, we're getting worked hard by our bosses. They're our bosses too and they work us hard. And so we're all being judged in our value prop and that's why Andreessen is doing so well. They have delivered a clear value prop to entrepreneurs in terms of biz dev and higher valuations and 99% of VCs make fun of them for overpaying and lo and behold, they're in eight of the 10 best deals in the last five years. So how do you and Farah build that type of trust with the entrepreneurs? I mean, you're competing in a unique way and I'm really interested in that model. It takes time and that's also part of the reason we're doing seed investing is then you have a year to build it with them. So we like to spend a year or two years. I spent three and a half years with Bill Chambers before we invested in Left Hand Network. So we knew each other personally. Our wives knew each other. You know, as my kids, my name. You know, you have to build trust. If you just meet a hot B round and it's two week shotgun to term sheet, then you're just going on references. He's going to call people he trusts and say, hey, how is that guy on your board? And that might be enough and that happens. But in terms of if you're really going to be partners for seven years and build a company to last, it helps in both directions. We want to get comfortable with them too. We're going to give them a lot of money in our brand. You know, we want to get to know. So quick, real quick. So Solid Fire, we had them on at EMC. It looks like they're going through the rounds with their betas and looking all like it's on track. We're excited about those guys going to market. They're doing great. He's good there. Nirvonix. He's doing fantastic. We raised a big, we have to hat tip to Coastal Adventures, which has also been incredibly impressive. That's huge. Bringing Coastal Adventures in. David Wyden, who I went to high school with, had tipped to Lakeside High School. He and Vinod and Cherish have spent tremendous amount of time and they have a Rolodex that is among the best if not the best in Silicon Valley and they've brought it to Nirvonix and we're grateful for it. So I probably had two calls of them already today. They're fantastic. Great. Well, listen Charles, thanks very much for coming by. Thanks buddy. Good to see you. I'm glad you could make the time for us. Really appreciate it. Keep hiring, keep growing. All right, hey, good work. You know it. All right, keep it right there. We're right back with Colin Mahoney, General Manager of Vertica. Keep it right there.