Home Archives May 2006 David Chen of OVP Venture Partners: Catalyst at work

David Chen of OVP Venture Partners: Catalyst at work

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Monday, May 01, 2006

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David Chen pushes Oregon forward with his own brash style.

By Christina Williams

The hour is rounding toward 9 a.m., and David Chen is getting warmed up.

He’s leaned forward at the small round table tucked into the corner of a cluttered faculty office on the Oregon State University campus in Corvallis. His black-rimmed eyeglasses sit folded in front of him next to his well-worn Nokia phone. He listens, makes spare notes into a hardback composition book and bends his head over few paragraphs of text and a diagram outlining the functions of a futuristic small-scale nuclear reactor handed to him a few minutes before.

Then the questions begin.

“Is it rechargeable?”

“How revolutionary is it? Are there other competing designs?”

“I’m not struggling with the economics, but what the hell’s the vehicle for this?”

It’s this last question that everyone around the table wants to know the answer to.

José Reyes, head of the Department of Nuclear Engineering at Oregon State University, does his best to answer Chen’s questions. The topic of the hour is Reyes’ design of a small-scale nuclear power generator and its potential as a money-making vehicle for speculative investors such as Chen.

But Chen, whose specialty is investing in high-tech companies, has no interest in putting money into nuclear power. He’s here to cut through the b.s. and offer some free, real-world advice. He’s here to tell Reyes and OSU engineering dean Ron Adams what investors are thinking when they hear it will take $100 million to get a prototype of this design up and running (answer: “ick”). He’s here to ask the questions that will lay bare the essential value in the technology and lead the group to a course of action.

He’s here, as he puts it, “as a friend of the family.” And he’s here, as Adams puts it, because: “You’re one of the best strategy guys I know.”

These days, everybody wants a piece of David Chen.

A maestro of myriad self-interests, Chen has proven himself adept at convincing Oregonians by the roomful that it’s OK to be, in his words, naked — to admit underdog status and charge forward with a big idea. Once he’s done that, he applies his own kind of prickly catalytic energy to pull it all together. His handiwork is leaving an imprint on the state’s economy that will be visible for years to come.

As chairman of the board of the Oregon Nanoscience and Microtechnology Institute (ONAMI), Chen is an important strategic driver behind the state’s biggest bet to date on the so-called innovation economy. He’s also the governor-appointed chairman of the nascent Oregon Innovation Council, an organization set up last year by the Oregon Legislature and charged with directing the state’s future bets on emerging industries. He also leads the Oregon Entrepreneurs Forum’s board of directors this year, was appointed in December to the board of directors for the Portland branch of the Federal Reserve Bank of San Francisco and serves on the advisory committee of the year-old Oregon Investment Fund.

Despite the fact that he’s smack in the middle of some pretty ambitious efforts to bring big changes to the state, Chen turns up his palms, deflects the credit and says he’s just a citizen. He also says his personal idea of hell is a version of the movie Groundhog Day in which the same meeting is lived over and over. He’s virtually allergic to wasting time.

Those who know the 46-year-old Chen use words such as focused, driven, private, impatient and wickedly smart to describe him. He tramps around his office in stocking feet, types e-mails devoid of capital letters and doesn’t mince words. He favors jeans, black shirts and soft-soled suede boots. He can come across as fidgety and boyish or brusque and stoic. But when he speaks, it’s with pure authority: a low, measured voice and a vocabulary that sometimes sends others scrambling for the dictionary (as in orthogonal: of or related to a matrix whose transpose equals its reverse).

His intensity can make others squirm, and while Chen has charm, his style is often orthogonal to the typical Oregonian approach: polite, docile and, above all, nice.

“He’s not one to pad with diplomatic niceties what his thoughts are,” says Ron Paul, who recruited Chen to serve on the board of directors of his effort to get a year-round public market established in Portland.

“We all have our strengths and weaknesses,” says Don Krahmer, lawyer with Schwabe Williamson & Wyatt, longtime volunteer on economic development initiatives and one of Chen’s fans. “I would never ask Dave Chen to soften his high-tech Silicon Valley style. He’s not afraid to speak his mind.”

Beyond a resume-busting list of extracurricular responsibilities, his demanding job as partner at venture capital firm OVP Venture Partners gives Chen a front-row seat on emerging high-tech companies in the Pacific Northwest. His goal as a venture capitalist is to invest in the ones that will grow the fastest, perform the best and make the most money for his firm and its investors. 

OVP, with offices in Portland and Kirkland, Wash., manages some $500 million and receives regular investments from the Oregon State Treasury, the most recent being $50 million in OVP’s seventh fund approved by the Oregon Investment Council in March. Chen is one of six investing partners at OVP and sits on the board of Portland-area startups Ambric and UXComm, along with Intelligent Results of Bellevue, Wash.

“My top priority is my day job: making good deals and managing the portfolio,” Chen says. “The world I know best is the startup world.” 

His work in the public sector comes bundled with this startup experience. “What I’m most vocal about is that as a startup you admit that you’re a little guy,” he says. “To admit that you’re not on top is very freeing.”

Chen’s approach is a tightly wound combination of underdog vulnerability and the chutzpah to say that if just the right niches are exploited, Oregon can invent its way into a leadership position in the global economy.


“I WOULD LIKE YOU TO CONVINCE ME that this is absolutely unique,” says Chen. “I’m OK with a few holes, but I want a revolution that I can de-risk.”

He’s a few hours into his morning at OSU. The meeting rooms have changed with the topics, revolving from nuclear power to micro-nano laminates to the present session on biodiesel. In this meeting his posture is different. The sleeves of his black turtleneck have been nudged up, his suede coat is slung across the chair beside him. He’s bouncing his knee to the time of his flickering thoughts. He’s defining next steps. He’s talking about getting the technology, a microchannel reactor for the processing of biodiesel, ready to go, about getting industry partners involved, about OVP taking a quarter-million-dollar flier on the idea. He’s  talking about charging forward.

“The two things I want to get out of a next meeting with you are: where the technology is and where the gaps are,” Chen says. “I also need a high-level business plan. Almost a white paper. What has to be done to get from here to there?”

“We’ve got that,” offers Kevin Drost, an associate professor of mechanical engineering and co-director of OSU’s microtechnology-based energy and chemical systems initiative. He adds, “A million would get us to a functioning version and debugged fabrication point.”

Chen bobs his head as Drost speaks. “I think we want to prove pretty quickly that there’s a there there,” he replies.

For Chen, this technology, which has its roots in ONAMI research, offers a glimmer of the next big thing and a potential investment for OVP. Sure, biodiesel doesn’t fit in with the firm’s current portfolio of semiconductor technology companies, digital imaging plays and life science-related startups, but Chen sees it as a chance to get a foothold in the energy market — not that OVP would ever invest in a biodiesel plant.

“There’s some opportunity to be Levi Strauss,” Chen says, “selling pickaxes and jeans to the pioneers. And leaving the big stuff to someone else.”

He’s got a nose for such opportunities and tends to follow it, even when he doesn’t know exactly what the end result is going to look like. “Don’t rush the structure” is one of Chen’s catch phrases. It’s moving forward that counts, and he’s quick to point out that when the idea that became ONAMI began to coalesce, those involved started working toward the goal of landing a federal research center before they knew what it would actually look like.

It’s the same notion that guided Chen late last year as he and Oregon Innovation Council co-chair Stuart Cohen, CEO of Open Source Development Lab in Beaverton, set up the structure for how the council would work. Burning through a lot of late-night e-mails, they established a subcommittee structure, organizing groups around the different public policy areas the council is focusing on — the supply of and demand for investment capital, areas ripe for more signature research centers and industry cluster development.

“You take your best shot at structures,” Chen says. “There’s a lot of ambiguity. I’m reasonably comfortable with that.”

In other words, Chen is OK being naked.

He uses nakedness to describe the feeling when you’re starting something from scratch. And despite the Oregonian penchant for consensus, Chen doesn’t lose any sleep when he’s unable to convince others to come along with him. 

“If you’re driving consensus, you’re trying to convince people to be naked with you. They’re telling you that the emperor has no clothes, but you already know that,” he says. “If your focus is consensus and approval, you’ll never get there. You’re not trying to turn a blind eye to criticism, you’re just trying to get some traction.”


WHEN HE GOT OFF THE PLANE AT PDX a few months back, OSU’s Ron Adams found Chen, fresh off the same flight, hunkered down in the gate’s waiting area, tapping away on the keys of his IBM ThinkPad.

Adams stopped to chat and hit up Chen for some of his time on his next Corvallis trip. Before he turned to go, he remembers teasing him: “What are you going to do, stay at the airport all night?”

Chen’s reply: “No, I’m going to finish my e-mail so I can go home and have dinner with my family.”

For all his work leading volunteer armies and all the time spent in his day job sniffing out the next new moneymaking technologies, Chen is a family man who cooks dinner most nights. And in all the spare time he can scrape together, he co-owns and helps manage a winery that turns out small amounts of award-winning pinot noir.

Chen was born in Taiwan but his family moved to the United States when he was a baby. He got a pre-med degree from the University of California-Berkeley, but a part-time job at tech manufacturer Solectron during the dawn of the PC era hooked him on the industry. He later got a master’s degree at Northwestern University’s Kellogg School of Management and landed in Oregon in 1989 when he took the top marketing job at Mentor Graphics. In 1993 he co-founded the Ascent Group, a high-tech consulting firm. In 2000 he joined the ranks of OVP.

Along the way Chen met and married Jill Price, a dentist, member of the OHSU Foundation board and Chen’s second wife. The pair have two sons, one 4, one almost 2, and a full-time nanny who helps them maintain their careers and their sanity.

It’s hard to imagine Chen finding the time to scout out and buy a 72-acre orchard north of Gaston, plow under the old crops, plant pinot noir vines, harvest the first grapes in 1999 and create a small winemaking operation. But with partner Monte Pitt, a friend from b-school, that’s exactly what Chen has done. In November, Patton Valley’s 2002 pinot noir made a Wall Street Journal list of 10 best Oregon pinots.

He describes a habit he developed of scheduling work calls during harvest that kept him from immersing himself in what he calls the “raw joy” of his vintner identity. It’s a habit he broke last fall. “Last year,” he says, “I granted myself permission to enjoy it.”


A GENERIC DOWNTOWN PORTLAND CONFERENCE ROOM was the site of an April 16, 2002, gathering that set the course for what became ONAMI, a collaborative effort to get Oregon on the map for nanotechnology research.

David Chen’s top priority is his day job, where he’s  on the phone and in meetings about OVP’s portfolio. But he also spends an inordinate amount of time “making the pie bigger,” applying his energy to projects and organizations out to improve the economic picture.

Chen singles out the meeting he pulled together, which he calls a show-and-tell for Oregon’s Democratic Sen. Ron Wyden, as a turning point. At the time, Wyden was writing the 21st Century Nanotechnology Research and Development Act, designed to boost nanotechnology research in the United States. He asked Chen for help in articulating Oregon’s assets in the field.

Some 50 academics, business leaders and a handful of politicians bundled into the room, ate boxed lunches and sat through the 90-minute agenda, a series of short presentations describing a particular expertise held by an entity in Oregon — be it FEI Corp., Hewlett-Packard, Intel, Pacific Northwest National Laboratory or one of the universities — in the wide area of nanotechnology.

The goal was pretty simple: make it clear to the senator that the science he was championing on a national level was thriving in his home state, worthy of his advocacy, and worthy of national attention and federal research money.

Along with everyone else in the room that day, Chen’s self interest was at play. It still is. To make money for OVP, he needs a fertile field of deals. A federally funded research center helps that cause. So will the big ideas generated by the Oregon Innovation Council. And poking around the halls of Oregon’s universities looking for revolutions to de-risk doesn’t hurt his cause either.

The April 2002 show-and-tell gambit was successful. Fast-forward two years to the official ONAMI launch ceremony in May 2004 and listen to Wyden deliver the following line to cheers from the jubilant audience: “It’s pretty obvious that nano rocks in Oregon!”

Skip ahead to the present and find ONAMI ahead of schedule in achieving its goal of winning a federal research center. An $8 million federal commitment is likely to be passed by Congress this year that will charge the institute with studying thermal management and portable power for the U.S. Army. Other research awards are in the works.

“Dave is always thinking things months or years before other people do,” says Skip Rung, ONAMI’s executive director. “He was very excited about nanotechnology in 2002. Frankly, I couldn’t have defined it then. But, he said, ‘I’m going to put energy into this.’”

Chen is the first person to tell you that ONAMI wasn’t his idea. In fact, he’s frequently building up the other early organizers as the real pioneers. As in: “Skip Rung is truly the unsung hero of this whole damn thing.”

But when Chen got involved, he stepped into a role that he’s become known for: the catalyst, the guy who pushes people to create. It’s the reputation that has made him a sought-after presence on boards and committees of all descriptions.

In many ways, ONAMI was the ultimate startup for Chen. He had his eye on the end result — a federally funded research center — and made sure everyone else did, too. “That’s where the creative tension came in,” Chen says. “It wasn’t about getting it right. It was about getting it.” 

It took two years before ONAMI had a there there, another two before any formal structure caught up with it. Along the way, there were naysayers. But Chen continued to see an emperor fully clothed.

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