Interview with Petro Estakari, Founder/CEO of Avalanche Technology and Will Stewart, GP, RVP

Q: Maybe you can share with us what is it you had seen in Petro and Avalanche-Technology to make an early venture capital investment? First off, my partnership at RVP and I maintain a very different investment philosophy then most of my fellow VC’s. WS: First off, my partnership at RVP and I maintain a very different investment philosophy then most of my fellow VC’s. We truly feel it is a privilege to have the opportunity to invest in a start-up like Avalanche Technology especially along side a brilliant proven entrepreneur like Petro. There are thousands of VC’s and in some ways I look at it as if Petro chose my firm and myself as his co-founder as one of the investors in Avalanche. I say co-founder because seeking investors is like seeking co-founders in your business. Experienced and successful entrepreneurs like Petro know that the entrepreneur-investor relationship is a very long partnership where there are going to be good times and bad but you have to constantly communicate and work together to grow a successful business.

Petro presented to us a company that has set out to fundamentally change the $70B + memory industry with a disruptive low power nonvolatile magnetic memory. Not only solving the technology scaling challenges faced by existing charge based memories, Petro and his team are enabling radical leaps in memory and storage system architectures. Avalanche as well plays into the strengths of our investor Rogers
Communications Inc., (RCI), as Avalanche’s solution is ideal for applications in nearly every industry, from consumer electronics and mobile phones to satellites and emerging M2M applications.

Q: Petro, touching on some of Will’s comments, maybe you can share with us why you chose Will and RVP along with some of the Top VC funds in the country to invest in Avalanche?

PE: Yes, we have been very fortunate that Avalanche has attracted a Top Tier venture capital investor bench with RVP, Thomvest, Sequoia, Bessemer, Vulcan, Qualcomm, and VTB. That said, of my investors, Will
takes on a very different VC philosophy and approach in his deals. I was very fortunate to have Will as one of my first investors in another successful start-up of mine called Lexar Media (acquired by Micron). As well, Will was the first investor and co-investor with me in another successful start-up called SiliconStor (acquired by LSI). In those deals I learned first hand that Will is a very different VC. First off, Will had a very successful early career at NEC Corporation in their headquarters in Tokyo. Having a real global operating background coupled with a solid foundation in technology and though not an engineer Will “gets it.” As a technology entrepreneur there is nothing better then receiving advice on growing your company from someone who “gets it” and has actually built or been a part of building a global technology company. Often I meet VC’s who have no real operating experience and I’m always puzzled what real added value they can bring to the table besides capital. Lastly, I am not sure if I can ever recall a time during any one of our thousands of conversations over the years where Will didn’t conclude the conversation by saying, “how can I help?” I am sure anyone reading this interview and know Will both personally and professionally know exactly what I mean. There is no doubt that there would never have been a successful Lexar Media, SiliconStor, and hopefully Avalanche Technology if there wasn’t a Will Stewart introducing global partners, investors, board members, executives, and contributing endless hours of brainstorming and experience to help build these companies. If you ask me, that is what an entrepreneur wants from a VC. In my start-up experience, money is all the same color but an investor with real corporate experience, global contacts, “gets it”, and sits on the same side of the table in sharing your passion to succeed is very unique and extremely hard to find.

Q: RVP’s investment comes at a time when VC’s have pulled back considerably on their investments in the semiconductor industry?

WS: As we all know too well, VC’s flock like birds, typically all flying together in the same direction. Naturally, in the past few years the flock has attacked emerging areas like social media, mobile applications, digital payments, and typically in technology sectors where the start-up costs have dropped considerably in creating and getting to a proof point for an emerging business. My partners and I tend to fly outside the flock and with Avalanche Technology sometimes we are flying in the opposite direction. Whether the semiconductor sector or any other emerging IT sector, RVP is looking for entrepreneur’s or proven teams with domain expertise. I believe domain expertise comes with a deep understanding of an industry, a track record of success (or failure at times) in an industry, a history of building successful products/solutions, innovations in the industry and constant self-education. Domain expertise separates the strongest from the weakest in any industry because it is fundamental to survival and involves constant evolution and adaptation. It requires one to think, learn, work, and evolve. Petro and his team have a deep domain expertise that is affording them the opportunity of applying radical and disruptive change in a $70B + global memory and storage market that is ripe for change.

Q: Sounds like your just lifting the hood and letting the world see what Avalanche Technology is doing?

WS: Absolutely, the company is moving from stealth to full global market penetration working with some of the largest customers, technology partners, and investors in the world. Anyone who knows of Petro knows that he has either authored or co-authored over 90+ patents in his career in magnetic media, flash storage, and systems architecture. The Avalanche team holds 300+ patents in storage, memory architectures and controllers and so one can be certain Avalanche is coming to market with a tremendous IP foundation and proven solution in the magnetic memory space. As much as we invested in Avalanche, we invested in the people of Avalanche and it’s the people who are the most valuable asset of any company. My personal investment philosophy is not simply to invest in ideas but to invest only in the brilliant and capable people who can implement new ideas. Petro and his team are some of the most valuable assets in the global storage/memory marketplace and I truly feel sorry for the traditional and emerging competition because they know that Petro and his team are proven entities. Petro and his team know how to adapt, they know to make difficult decisions and act upon them, they know how to pivot, and most importantly they know how to compete and succeed on a global basis. Petro and the team at valanche are going bring forth real pain to the traditional business models of all the vendors and competitors in the global memory/storage space. As VC’s, wealways look for the “fire in the belly” or “eye of the tiger” in the
entrepreneur’s we fund but with an entrepreneur like Petro it is more like “I’d rather die then fail.” Fortunately, at RVP we just poured some fuel into a well-oiled Avalanche engine and are happy to be along for the ride.

Q: What is it, at this point in your successful entrepreneurial career, trying to prove with Avalanche Technology?

PE: It is those four magical words; “it can’t be done” that wakes all entrepreneurs every morning of their lives. It’s not the money; it’s nothing more then someone telling me I couldn’t do it. Probably my competitors would have been better off patting me on the back and telling me I could probably pull it off as I may have walked away from the idea seven years ago. For decades, in the storage space, every expert I met said magnetic memory could not be mass-produced. Well at Avalanche we have proven it can be on at an amazing low cost basis (using a standard CMOS process) and we have wrapped it in a very large IP basket and we are going to serve it up to the global market. We have been attacking this challenge 24/7 for now almost seven years and just now we are beginning to see the light in the tunnel and there seems to be no end in sight but I’m real glad all the hard work by my team has placed us squarely on the front end of this enormous global opportunity. I am also very thankful to Will, RVP and all my investors for fully supporting us on thisfun journey.

Interview with Petro Estakari, Founder/CEO of Avalanche Technology and Will Stewart, GP, RVP
May 13, 2013

Interview with Petro Estakari, Founder/CEO of Avalanche Technology and Will Stewart, GP, RVP

Q: Maybe you can share with us what is it you had seen in Petro and Avalanche-Technology to make an early venture capital investment? First off, my partnership at RVP and I maintain a very different investment philosophy then most of my fellow VC’s. WS: First off, my partnership at RVP and I maintain a very different investment philosophy then most of my fellow VC’s. We truly feel it is a privilege to have the opportunity to invest in a start-up like Avalanche Technology especially along side a brilliant proven entrepreneur like Petro. There are thousands of VC’s and in some ways I look at it as if Petro chose my firm and myself as his co-founder as one of the investors in Avalanche. I say co-founder because seeking investors is like seeking co-founders in your business. Experienced and successful entrepreneurs like Petro know that the entrepreneur-investor relationship is a very long partnership where there are going to be good times and bad but you have to constantly communicate and work together to grow a successful business.

Petro presented to us a company that has set out to fundamentally change the $70B + memory industry with a disruptive low power nonvolatile magnetic memory. Not only solving the technology scaling challenges faced by existing charge based memories, Petro and his team are enabling radical leaps in memory and storage system architectures. Avalanche as well plays into the strengths of our investor Rogers
Communications Inc., (RCI), as Avalanche’s solution is ideal for applications in nearly every industry, from consumer electronics and mobile phones to satellites and emerging M2M applications.

Q: Petro, touching on some of Will’s comments, maybe you can share with us why you chose Will and RVP along with some of the Top VC funds in the country to invest in Avalanche?

PE: Yes, we have been very fortunate that Avalanche has attracted a Top Tier venture capital investor bench with RVP, Thomvest, Sequoia, Bessemer, Vulcan, Qualcomm, and VTB. That said, of my investors, Will
takes on a very different VC philosophy and approach in his deals. I was very fortunate to have Will as one of my first investors in another successful start-up of mine called Lexar Media (acquired by Micron). As well, Will was the first investor and co-investor with me in another successful start-up called SiliconStor (acquired by LSI). In those deals I learned first hand that Will is a very different VC. First off, Will had a very successful early career at NEC Corporation in their headquarters in Tokyo. Having a real global operating background coupled with a solid foundation in technology and though not an engineer Will “gets it.” As a technology entrepreneur there is nothing better then receiving advice on growing your company from someone who “gets it” and has actually built or been a part of building a global technology company. Often I meet VC’s who have no real operating experience and I’m always puzzled what real added value they can bring to the table besides capital. Lastly, I am not sure if I can ever recall a time during any one of our thousands of conversations over the years where Will didn’t conclude the conversation by saying, “how can I help?” I am sure anyone reading this interview and know Will both personally and professionally know exactly what I mean. There is no doubt that there would never have been a successful Lexar Media, SiliconStor, and hopefully Avalanche Technology if there wasn’t a Will Stewart introducing global partners, investors, board members, executives, and contributing endless hours of brainstorming and experience to help build these companies. If you ask me, that is what an entrepreneur wants from a VC. In my start-up experience, money is all the same color but an investor with real corporate experience, global contacts, “gets it”, and sits on the same side of the table in sharing your passion to succeed is very unique and extremely hard to find.

Q: RVP’s investment comes at a time when VC’s have pulled back considerably on their investments in the semiconductor industry?

WS: As we all know too well, VC’s flock like birds, typically all flying together in the same direction. Naturally, in the past few years the flock has attacked emerging areas like social media, mobile applications, digital payments, and typically in technology sectors where the start-up costs have dropped considerably in creating and getting to a proof point for an emerging business. My partners and I tend to fly outside the flock and with Avalanche Technology sometimes we are flying in the opposite direction. Whether the semiconductor sector or any other emerging IT sector, RVP is looking for entrepreneur’s or proven teams with domain expertise. I believe domain expertise comes with a deep understanding of an industry, a track record of success (or failure at times) in an industry, a history of building successful products/solutions, innovations in the industry and constant self-education. Domain expertise separates the strongest from the weakest in any industry because it is fundamental to survival and involves constant evolution and adaptation. It requires one to think, learn, work, and evolve. Petro and his team have a deep domain expertise that is affording them the opportunity of applying radical and disruptive change in a $70B + global memory and storage market that is ripe for change.

Q: Sounds like your just lifting the hood and letting the world see what Avalanche Technology is doing?

WS: Absolutely, the company is moving from stealth to full global market penetration working with some of the largest customers, technology partners, and investors in the world. Anyone who knows of Petro knows that he has either authored or co-authored over 90+ patents in his career in magnetic media, flash storage, and systems architecture. The Avalanche team holds 300+ patents in storage, memory architectures and controllers and so one can be certain Avalanche is coming to market with a tremendous IP foundation and proven solution in the magnetic memory space. As much as we invested in Avalanche, we invested in the people of Avalanche and it’s the people who are the most valuable asset of any company. My personal investment philosophy is not simply to invest in ideas but to invest only in the brilliant and capable people who can implement new ideas. Petro and his team are some of the most valuable assets in the global storage/memory marketplace and I truly feel sorry for the traditional and emerging competition because they know that Petro and his team are proven entities. Petro and his team know how to adapt, they know to make difficult decisions and act upon them, they know how to pivot, and most importantly they know how to compete and succeed on a global basis. Petro and the team at valanche are going bring forth real pain to the traditional business models of all the vendors and competitors in the global memory/storage space. As VC’s, wealways look for the “fire in the belly” or “eye of the tiger” in the
entrepreneur’s we fund but with an entrepreneur like Petro it is more like “I’d rather die then fail.” Fortunately, at RVP we just poured some fuel into a well-oiled Avalanche engine and are happy to be along for the ride.

Q: What is it, at this point in your successful entrepreneurial career, trying to prove with Avalanche Technology?

PE: It is those four magical words; “it can’t be done” that wakes all entrepreneurs every morning of their lives. It’s not the money; it’s nothing more then someone telling me I couldn’t do it. Probably my competitors would have been better off patting me on the back and telling me I could probably pull it off as I may have walked away from the idea seven years ago. For decades, in the storage space, every expert I met said magnetic memory could not be mass-produced. Well at Avalanche we have proven it can be on at an amazing low cost basis (using a standard CMOS process) and we have wrapped it in a very large IP basket and we are going to serve it up to the global market. We have been attacking this challenge 24/7 for now almost seven years and just now we are beginning to see the light in the tunnel and there seems to be no end in sight but I’m real glad all the hard work by my team has placed us squarely on the front end of this enormous global opportunity. I am also very thankful to Will, RVP and all my investors for fully supporting us on thisfun journey.

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