Big Fund Bets on UCLA Prof
Venture capitalists say they often hear of the best ideas in strange places. Like the parking lot after a company barbecue.
That’s where venturist Steve Domenik first heard of a UCLA professor’s plan to develop a more efficient cell phone antenna that wouldn’t direct radiation into a person’s head.
Domenik, a partner at longtime venture firm Sevin Rosen, jumped at the chance to fund the idea. His firm has financed more than 100 companies and was a founding investor in Compaq Computer.
Since June, Sevin Rosen has put more than $2 million into Photonic RF, the Westwood start-up headed by Eli Yablonovich, a professor of electrical engineering credited with leading a team that invented the photonic crystal in the early 1990s.
Yablonovich believes that the crystals can be used to make safer cell phone antennas by providing much more accurate communication signals.
“It’s a problem that really needs to be solved. The current antennas aren’t as efficient as they could be,” Yablonovich said.
Sevin Rosen, founded in 1981 by L.J. Sevin and Ben Rosen, has since raised more than $2 billion in eight funds, including a new $875-million fund that closed in November.
In January the firm will open its first Southland office, in San Diego. Its other offices are in Palo Alto, Dallas and Austin, Texas.
“They’ve been around forever. They have a terrific track record and are very prestigious,” said Massoud Entekhabi, a Los Angeles partner with TL Ventures, a $1.5-billion fund.
“The fact that they are opening an office here is a good sign that our tech scene has arrived,” said Victor Hwang, chief operating officer for the Los Angeles Regional Technology Alliance, a nonprofit group.
Sevin Rosen currently has $50 million invested in six Southland companies, including Photonic RF.
The venture giant is well known for its partners’ expertise in technology. Many of the partners are electrical engineers, computer scientists or “recovering engineers,” as Domenik jokes.
Sevin Rosen also is well known for having shied away from funding many Internet-based business ideas. “We never understood many of the ‘dot-com’ models,” Domenik said.
“The good thing is that they didn’t invest in many dot-coms,” said Steve Coffey, a managing director with Hunt Ventures, a Dallas fund that manages the Hunt family money. “They are a very good-performing VC. We’ve increased our commitment to them with each fund they’ve raised.”
Sevin Rosen’s partners admit that the dot-com venture boom of recent years--and returns of 500% or more on some funds--made many newer venture firms look smart. But the veteran firm has chosen to stay focused on more complex technology ideas in such areas as communications, semiconductors, software and health care.
In Southern California, Sevin Rosen has invested in such companies as Capstone Turbine Corp. of Chatsworth and OMM of San Diego.
Capstone is a developer of a new breed of power generation systems. The company (ticker symbol: CPST) went public in June.
OMM makes optical components for networks that help facilitate various communications, such as real-time video conferencing. The company recently filed to go public.
Yablonovich’s company, Photonic RF, currently has fewer than 10 employees and is still in its start-up phase.
Yablonovich got his PhD in applied physics from Harvard University in 1972 and worked at Bell Labs, Exxon Corp. and then Bell Communications Research before coming to UCLA in 1992.
“Eli is a well-known and internationally respected scientist,” said Mehran Matloubian, a partner at Smart Technology Ventures, a Los Angeles venture fund. Matloubian said he believes photonic crystals do have many potential applications.
Yablonovich made the first photonic crystals by drilling holes in material that is transparent to microwaves. Photonic crystals are a material in which photons behave similarly to electrons in a semiconductor. One potential use of the crystals is in directing communications signals with much more efficiency.
In the late 1990s, Yablonovich invented phone antennas based on the crystals.
As with any new technology, there are doubters. Some venture capitalists question whether Yablonovich’s approach will work.
“There are a lot simpler ways to make antennas safer,” said one venture investor, suggesting that attaching microwave absorbers to phones would be easier.
But Sevin Rosen partner John Oxall, acting chief executive of Photonic RF, isn’t dissuaded.
“When we talk to the cell phone guys, they are very interested in what we have,” he said.
Photonic RF expects to start shipping its first test product to cell phone makers this month, though it won’t reveal names of firms. The company hopes one day to make antennas at a plant in Southern California.
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For more information on Sevin Rosen, the firm’s Web site address is: https://www.srfunds.com.
Debora Vrana can be reached at debora.vrana@latimes.com.
