Published in the San Diego Union-Tribune, October 9, 2023
by Neil Senturia and Barbara Bry
The guy likes to sail so the perfect place to pick his brain is on the outside deck of the San Diego Yacht Club. Barbara and I lashed Dave Titus to the mast for a quick look at our “innovation economy.”
First, some background.
In 1983, Titus was one of the co-founders of Silicon Valley Bank. When it imploded earlier this year, he said, “I went from shock to disbelief to sadness, and finally to anger at the venture capital community that turned its back on a bank that had supported them for 40 years.”
Titus started his first venture fund, Windward, in 1993 and a second one in 1999. Total raised was around $90 million. While small by dollar amount, Windward was mighty in the early tech world in San Diego. He is known as “one of the good guys” who gave back much more than he received.
Q:What are you doing now?
A:I’m a sailor, father, mentor and adviser. After 40 years as a banker, entrepreneur, VC investor, adviser, board member, and more, I am now on an “indefinite sabbatical.”
Q:Do you miss the action?
A:No. When I started there were five or six other local funds, Enterprise, Mission and others. It was early in the game. I loved it. In some ways, I was the right guy at the right time, but my second fund started in 1999, and the bad news bears were going to stalk the landscape for a while. Timing is everything.
Q:While billions of dollars of venture capital ($4.85 billion in 2022) are now being invested in San Diego companies every year, the community has only a handful of small funds based here. Will San Diego ever have significant locally based funds again?
A:If we ever have another big VC fund in San Diego it will be because someone who lives here writes a really big, personal check. If you like to surf, then sure the fund should be in San Diego. The quasi-angel/VC folks who raise $25 million to $50 million will have no returns in the current environment and won’t be able to raise a new fund. It is a tough game.
Q: If you were 36 today, would you start a fund?
A: Yes, because I love it.
The biggest issue in starting and then managing a fund successfully is the same as any startup we would fund.
Can you work with your partners, without walking them off the plank? And is there loyalty, will the partners hang in long enough?
Q: Do you think biotech will move downtown?
A: No. The executives for these companies primarily live in La Jolla and north, and they don’t want to drive downtown.
Q: Take the pulse of the startup market locally.
A: We’re hanging in. Right now, it’s hard for any entrepreneur to raise money. But to really play the angel game, you need enough money that you can do two things: afford to lose and also to make big enough bets that matter.
Q: What do you think about NuFund, our local angel group, that has 312 members and invested $10 million total in startups in 2022?
A: I think it is the wisdom of crowds that keeps novice angel investors from losing money because of the diverse expertise of the members. (Barbara and Neil are members of NuFund).
Q: What advice would you give to a first-time entrepreneur?
A: Find one or two advisers/mentors that have your best interests at heart on a personal level and don’t just want a couple of points in your company.
Q: What mistakes do you see entrepreneurs making over and over again?
A: Having no real-world basis for understanding the market. They don’t do the market research, they don’t know their customer or why anyone will want the product. The second mistake is the choice of a co-founder and senior management/core team members.
Neil: A final note. Windward funded my second company, and after a couple of years fired me as CEO. We made money. What can I say, I love the guy.
Rule No. 779
Keep the wind at your back.