Funding for startups

Bessemer's Soni Exits VC Firm

In the clubby world of the Boston venture capital business, a partner's tenure is usually measured in decades, not years. That’s what makes the recent departure of Rob Soni, a former managing general partner at Bessemer Venture Partners, all that surprising.

Bessemer confirmed today that Soni, who had been at the firm since 1994, is no longer employed at the company. He has been a long-time fixture in the Massachusetts startup community and was one of Bessemer’s networking gurus, involved in dozens of companies over the years.

So did he jump or was he pushed? Bessemer declined to cite a reason for Soni’s departure, and Light Reading was unable to contact Soni at press time. But one venture capital source in the Boston area, asking not to be named, said Bessemer Partners had a falling out with Soni over the recent performance of his investments and he was subsequently asked to leave.

That there would be friction among partners at a VC firm is not surprising. In the current environment, in which venture capitalists are struggling to restructure startup portfolios in the midst of a telecom and IT spending recession, tensions are running high.

Other Boston VCs were quick to defend Soni's reputation and track record in the business.

"Our business is a hit-or-miss business, and Rob has had more than his share of big, long hits," said Sean Dalton, a partner with Highland Capital Partners. "Likewise, Bessemer is an experienced firm with very capable and strong partners, so I expect them to keep on winning as well." Soni and Bessemer did have some recent successes in the telecom and networking group, among them Sonus Networks Inc. (Nasdaq: SONS), which had an IPO; Ocular Networks, which was sold to Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) (see Tellabs Nabs Ocular); Pirus, which was sold to Sun Microsystems Inc. (Nasdaq: SUNW) (see Sun Beams on Pirus); and Sirocco Systems, which was bought by Sycamore Networks Inc. (Nasdaq: SCMR) (see Sycamore Takes Over Sirocco ).

But Bessemer still holds a sizeable portfolio in the networking and components markets, giving it large exposure to the telecom gloom. Did the losses surpass the wins? It's really hard to tell, given the private nature of the VC business. But it's clear that Bessemer still has on its hands a large portfolio of network and components companies that will struggle to emerge as viable entities in the current economic environment.

According to a list published on the Bessemer Website, the startups Soni was most recently involved with have included Allegro Networks Inc., Azanda Network Devices, Catena Networks Inc., Ceyba Inc., Coriolis Networks Inc., Ellacoya Networks Inc., Hatteras Networks, Kirana Networks, NanoOpto Corp., and WaveSmith Networks Inc.

According to Venture Economics, Soni's current and past board positions have included: Ceyba, Ellacoya, Gotham, Hatteras, Megisto Systems, NanoOpto, Pirus, Telephotonics, Sandbridge Technologies, Vibrant Solutions, and WaveSmith.

Gotham Networks, which came and went without so much as a peep, has closed its doors (see Gotham Networks, MIA). The assets of another components play, Telephotonics, were recently sold to E.I. du Pont de Nemours and Co. (NYSE: DD) (see Components Casualty Count Climbing).

It's not yet clear what will happen to the seats controlled by Bessemer that were held by Soni, but typically VC firms assign these seats to other partners when one leaves the firm.

— R. Scott Raynovich, US Editor, Light Reading
cyber_techy 12/5/2012 | 12:49:10 AM
re: Bessemer's Soni Exits VC Firm Must be the signs of time
EGA 12/5/2012 | 12:46:57 AM
re: Bessemer's Soni Exits VC Firm Now defunct, Oresis was another of his investments omitted from the article.
douggreen 12/5/2012 | 12:46:52 AM
re: Bessemer's Soni Exits VC Firm Nearly all VCs invested in Telecom had bad years last year. If you compared the telecom guy in any VC to the rest of the firm last year, he/she looked bad. Many also compounded their problems by throwing good money after bad, investing in later rounds rounds to keep companies alive when they should have folded.

However, if you compare Rob with other Telecom VC partners, I don't think you will find many with a better record in 2002. Most would kill (and I almost mean that literally) to have had ANY companies with a positive exit in 2002. Rob had at least 2 (Ocular and Pirus). He has made his limited partners a LOT of money over the years.

Good luck to both Rob and Bessemer...
truthbetold 12/5/2012 | 12:46:39 AM
re: Bessemer's Soni Exits VC Firm Just as the bubble produced CEOs who shouldn't have been, Soni was a bubble VC who shouldn't have been. He was arrogant, pompous, and yet had no real industry career before becoming a VC to give him that arrogance. He invested in multiple companies in the same space, hedging his bets. For example, he personally invested $25,000 in Tachion, yet professionally (through Bessemer) invested in Oresis, Tachion's competitor. Same with Wavesmith, where he left them at the altar. He was a bad dude, traded on his ethincity (the Indian underground is very powerful in telecom), and was disliked by many, including his partners in Bessemer. It is very very hard to get fired from a VC firm. It wasn't as much about his portfolio as it was about him.
Caped Crusader 12/5/2012 | 12:44:44 AM
re: Bessemer's Soni Exits VC Firm Your insights relative to Rob are so definitive, I wonder whether you wouldn't share more about your experiences with him.

Were you employed at one of his portfolio companies? Did you have much interaction with him?

Looking for more info...
douggreen 12/5/2012 | 12:44:41 AM
re: Bessemer's Soni Exits VC Firm Caped Crusader,

I'm not sure who your questions were directed towards.

I worked at one of Rob's portfolio companies and sat in monthly board meetings with him as well as other occasions. I also knew of him from some of his previous companies over the last 5 years.

Although I don't think it appropriate to discuss another person in a public forum like this, I will repeat what I said before: Rob has a very good track record in delivering for his investors (which is why he was the MANAGING gerneral partner of the BVP Boston office). I will also add that Rob is well respected by me and by the people I know who worked with him closely.

BobbyMax 12/5/2012 | 12:44:16 AM
re: Bessemer's Soni Exits VC Firm Mr. Soni did not have much background in anything but he traced Indian Companies and provided them with funding. Allegro, Tachion and many other companies that he funded on his whims without regard to the merit. Most of thew Indian companies he funded are in trouble. Tachions CEO did not have any advance qualification in the switching but Bessemer put in a lot of money which they would never recover.
truthbetold 12/5/2012 | 12:43:05 AM
re: Bessemer's Soni Exits VC Firm Yo BobbyMax, get your facts straight. Fatish, the founder and original CEO of Tachion, did have switch experience (ATM, while at Lucent). That notwithstanding, he never actually built a product. He was an internal hired gun. Whenever there was an issue with a project, Fatish would be brought in for emergency surgery. But he never actually architected or completeed a switch. Fatish was replaced as CEO by the Man in Black, who, although he didn't have CEO experience, had 25 years of switch experience - ATM,X.25,TDM.

What are you are most wrong about is that Bessemer lost a lot of money on Tachion. Bessemer did not invest in Tachion! Soni put in $25 K of his own money (and then bet against Fatish by having his firm - Bessemer - invest in Tachion competitor Oresis (who is also now dead!).

But, alas, the joke is on us. Soni might have lost $25 K on Tachion, he might have been fired by Bessemer, but he walked away from his five years at Bessemer with over $50 M.

Garam Masala 12/5/2012 | 12:32:00 AM
re: Bessemer's Soni Exits VC Firm Truthbetold,
Explain the GǣIndian UndergroundGǥ to me.
Sounds real spooky!
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