"Over my career, I have been lucky to be on the boards of 30 public and private companies and worked with incredible founders and CEOs through many ups, downs, and economic downturns."
Umesh Padval, Venture Partner
In part 1 of this inspiring 3-part interview with Umesh Padval, Venture Partner at Thomvest Venture Partners, Umesh shares the fascinating story of his journey from his childhood in India, to CEO, and ultimately becoming a luminary of Silicon Valley’s Venture Capital world.
Many people who work in Technology VC have always worked in investments and have no background in technology themselves. However, you started your career as an engineer.
Yes, I come from an engineering background and that is the backbone of my professional career. Originally, I spent 5 years studying engineering at IIT (Indian Institute of Technology, Mumbai). Although I didn’t have a business background, I wanted to have a small but meaningful global social and business impact in my lifetime.
Growing up in India, my parents wanted me to be a medical doctor or a Ph.D. in engineering, since those were the most respected professions when I was growing up. That’s why I came to the U.S. on a one-way flight, with $32 in my pocket, and a scholarship to study in the U.S.
I started my Ph.D. in engineering at Stanford University but, along the way, I quickly realized I wanted to be part of the early tech industry boom of the mid 1980’s. I decided to complete my master’s and took a leave of absence from the Ph.D. program. I started working on manufacturing and designing chips at AMD and I loved it so much that I never looked back.
But you didn’t stay in engineering. Was it at AMD that you first became interested in the wider business functions?
I loved engineering, but I quickly realized my personality was better suited for the business side of the company. I was intrigued by working with customers to understand how they used our products to innovate their systems. With 9 years of engineering education and work experience under my belt, I transitioned to marketing, where I learned how to define, market, and sell products. Because I had no prior business degree or business background, I thought it was going to be difficult. I dedicated myself to learning the craft, working long hours, and continually learning until I became very comfortable with it. I then moved over to sales, which gave me an amazing understanding of our customers and the value proposition of our products. After 3 successful years in sales, I wanted to keep progressing and move to the next stage of my career.
This is the point where you accepted your first leadership role. How did that come about?
Due to my success and dedication in sales and marketing, the CEO asked me to start running a $400M business. My journey went from engineering, to marketing, to sales, to general management. At the same time, I saw a major market opportunity for products and services transitioning from analog to digital, and joined a startup group inside the company that became part of the digital video revolution in the early 90’s. I took the business to $60M in revenue and my competitor, C-Cube Microsystems, noticed the success. They approached me and offered the role of President, and later an offer to become the CEO, which I happily accepted.
We live in an age of technology and information where it’s comparatively easy to start your own company and become the CEO, whatever your background. Was it much tougher back then?
I have been extremely lucky in my career. After finishing college, I worked at several mid-size companies, but I was always fascinated by the CEO role. However, in the 80’s and 90’s there was a glass ceiling for internationally diverse people of color. You had to start your own company if you wanted to be a CEO. My dream came true in my early 40’s when I was asked to be the President and then CEO of C-Cube Microsystem, a public company focused on providing differentiated digital video platform solutions to the global market.
Many people who work in VC have never actually run a company themselves. Did you always want to become a CEO?
I’ve always put myself where the opportunities were and took calculated risks.
My first 20 years were spent in broad management roles, which I loved. Dealing with customers, leading a team making rapid business decisions, resolving issues, talking to investors on Wall Street – it was enriching. I consider myself lucky to have received the opportunity to become a CEO of a public company, which was always my dream growing up in India.
Because of the company’s success, several acquirers approached us interested in buying the company. Ultimately, we sold the company to LSI Corporation and created tremendous value for our shareholders and employees.
Once I had become the CEO of a company, my dream was fulfilled, and I said to myself, “what am I going to do next?”
After being so successful as a first time CEO was it difficult to decide what you wanted to do next?
As I was thinking about the next stage of my life, I was lucky enough to have several great options. I was approached by many private and public companies with offers to become a member of their board or join as CEO, as well as several offers to join VC firms. I didn’t want to rush this important decision and decided to experiment with a few options. I joined the board of a public company, Elantec, and two very early stage companies called Monolithic Power Systems and Entropic Communications.
Were these all still public companies, or had you started to become involved in private companies too by this stage?
Over the next several years, I served on both public and private boards, and enjoyed working with CEOs and other board members to create value for shareholders and employees. Public boards were easier since I had experience running a public company, but building private companies was a new experience and an exciting challenge. As I helped early-stage companies with their strategy, recruiting, and execution, I fell in love with that aspect of company-building.
And this is where first you became involved in VC?
Yes, this is when I became receptive to VC interest and after evaluating many firms, I joined Bessemer Venture Partners as an Operating Partner in 2007 and then later as an Investing Partner. It has been such an exciting journey — I haven’t looked back since! By that time, my early stage companies, Monolithic Power Systems and Entropic Communications, ultimately went public and I stayed on their board of directors.
Having been the CEO of several very successful companies, how does the CEO role compare to being in VC where you have to split your time between several companies?
The operational role as a CEO is very different from the Venture Capital role. It’s depth versus breadth! In the operational role, you have an incredible knowledge of the segment of the market you are involved in. You are a leader of the company and its employees, creating a vision and roadmap, focusing on customers, executing on products, and striving for operational excellence that would ultimately result in great financial results. You are always making decisions with your team every minute of the day.
In a VC role, you’re involved with 6–10 companies as a board member at any given time. You’re a coach, working with the CEO and the team, guiding them with your industry experience, but not making day-to-day business decisions. You are involved in several companies at the same time and the challenges of each one of them are different, so you need to have market knowledge across those sectors.
Over my career, I have been lucky to be on the boards of 30+ public and private companies and worked with incredible founders and CEOs through many ups, downs, and economic downturns. Even after the exits, most of them have remained my personal friends and that is what I feel most proud off looking back at my career.
What do you wish you had known early on in your career and what advice would you give to someone today who would like to follow in a similar path as you?
As I progressed through my career, the infrastructure of mentors did not exist. As my responsibilities expanded, I had to learn on the job. The upside of that was I learned a lot more from my failures than my successes. This is the reason why I mentor many young graduates, entrepreneurs, and CEOs — based on work and life experiences. I would encourage people to find good mentors, so you avoid making similar mistakes as me and find the fastest path to success.
Throughout your career you’ve inspired and continue to inspire many people. Who are the people that have inspired you the most?
I have three role models. Elon Musk is an incredible innovator. He started and built 4 amazing companies in 4 different and very difficult markets, against all odds — Solar City, PayPal, Tesla, and SpaceX. No one in the world has ever done that!
My second role model is Apple’s Steve Jobs. I was lucky enough to interact with Steve Jobs twice and have some very interesting stories about those meetings. I was part of the team that made the first custom chip for Apple in late 80s. and then while at Bessemer Ventures I was involved with a chip company — P.A. Semi — that Steve Jobs bought in 2008, which is now part of Apple’s A series processors used in every single Apple product.
My third role model is Bill Gates, who co-founded Microsoft, a massively innovative and successful company.
I love Elon Musk and Steve Jobs for their creative ideas, innovation, and passion. But Bill Gates is in his own category. I admire Bill Gates for his success in building Microsoft, but more importantly, for what he is doing to solving major global health issues and affecting people’s lives globally.
In an incredible career which has taken him from engineering, to CEO, to Venture Capital, Umesh Padval knows first-hand the real-world challenges that startups face. Read part 2 of this 3 part interview here: CEO, Turned Venture Partner, Explains His Unique Approach to Startup Investment