By Jonathan Gramling
Part 1 of 2
When thinking in terms of making money, most of us think about everyday jobs and the pay check we receive on a bi-weekly basis. We might skim some off
the top to invest in a 401(k) or savings account, most of the money goes into meeting the rent and the monthly bills.
There are still others of us who have kicked it up a notch and instead of being employed; we employ ourselves and perhaps others through our small
business. We now have cash coming in that we use to maintain our business or perhaps expand it. We may have to borrow money from the bank to meet our
expansion needs, but what we do is our investment and method to increasing our wealth. This is a level that people of color are joining with increasing
But there is still a higher level of operation that few of us ever get to see. It is the arena where money is lent and earned on a dizzying level. It is the world of
venture capital and finance capitalism. It is the level where the real economic actors play, financing and purchasing companies for a relatively short period of
time before meeting their objectives and moving on to the next project. There are relatively few African Americans and people of color playing on this level,
yet this is where the real wealth is made in the United States.
In order to feature and spur more activity by people of color in the venture capital game, the Wisconsin Supplier Development Council sponsored The
Economic Summit III: Venture Capital Development Conference at the Edgewater Hotel on November 7. It featured speakers from across the U.S. who have
participated in the high stakes, high risk venture capital game. One of those speakers was Madison’s own Winslow Sargeant, managing director of Venture
Sargeant is a quiet, unassuming individual who has struck it big in the venture capital game. The basis for his venture into this field was not inherited
wealth. It was a solid and extensive scientific, math and research background. Winslow came to the UW-Madison in 1988 to earn his Ph.D. in electrical
engineering. “I wanted to be a researcher,” Sargeant emphasized. “So when I did my Ph.D. here, I left campus in 1992. because I wanted to have a thesis that
was practical. I didn’t want to write a theoretical paper. But my advisor at the time said ‘Hey, I’m not a practical guy.’ So I did some searching and found that
IBM in Rochester, Minn. was doing some work that was similar to my interests. It was a good fit, so I went there for three years although I stayed a dissertator at
UW and that’s when I was able to do some research that met the bar and I was able to receive my Ph.D. from here in 1995. All along, I wanted to be practical. I
wanted to change the world.”
Sargeant wanted to change the world not as a political leader, but as a creator of something that would impact the lives of people. “It’s one thing to write a
paper,” Sargeant said. “But for a layperson to pick up a product or pick up something and you can smile and say ‘Hey, that’s something I worked on.’ I wanted to
see that impact.”
After getting his Ph.D., Sargeant left IBM and eventually co-founded Aanetcom, semiconductor integrated circuit design company, in 1977 with seed
money from Cisco Systems. They struck gold and were eventually purchased for $900 million. Sargeant had his stake in the game.
After leaving PMC-Sierra, which had purchased Aanetcom, Sargeant took a position at the National Science Foundation as a program manager in its Small
Business Innovations Research program before joining Venture Investors in 2005.
Now Sargeant could have taken it easy after he struck it big with Aanetcom. But he was still hungry. “I could have kicked back after I sold my business,”
Winslow confided. “But of course, the bubble did burst and I did take a hit. But what you find is that you become more competitive. So it’s not just time to go on
a boat or whatever. You want to do it again. Then when you meet with some of your contemporaries who are now on their second or third start-up, you want to
be in that race. After your first success, you want to know whether or not it was just pure luck or could you do it again. That’s the mindset you get into.”
Sargeant feels that it is his science and math background that make him a good investor. “Nowadays, you have to really know the technology because it is so
risky,” Sargeant said. “You can minimize the risk by having technical knowledge. I could be biased, but I feel that the better venture capitalists are actually
coming with not only a financial background — and that’s very helpful — but they also have to have knowledge of the technology and the science. It will help
minimize the risk, but it will also make some good investments.”
And while Sargeant is in a game that involves high finance, he is ultimately in it for something else, personal satisfaction and achievement, things that money
can’t always buy.
Next issue: More on Winslow Sargeant and venture capitalism