10 Innovators to Watch in 1999
be simple: "I just look around and see what's going on. And it all seems very clear to me that there's change in the wind. So my objective is to encourage people to look at the signs and opportunities and seize them."
Shaw is a venture capitalist whose Aretê Ventures Inc., and now Aretê Corp., have invested millions in energy and telecommunications technology. His successful investments include Ballard Power Systems Inc., now a $24 million company in Canada; Ciena Corp., one of the largest IPOs ever, raising $100 million; and Superconductivity Inc., a pioneer in voltage stabilization with superconducting magnets, purchased by American Superconductor in April of 1997.
Shaw's reason why he likes to build successful companies? "It's like leaving your mark. It's like being a great painter and leaving your paintings behind. My paintings are little companies."
Shaw wasn't always a venture capitalist. He started as a scientist. He's probably one of the few VCs with a Ph.D. in applied physics from Stanford University. Early in his career, he conducted materials and electronics research at Bell Laboratories and the Cavendish Laboratory in the United Kingdom.
In 1972, his career took a turn. Hired on as a junior scientist at Booz, Allen & Hamilton, he quickly found himself on a fast track as a consultant. By 1975, he was a vice president. He says his personality wasn't suited to sitting at a desk and doing theoretical equations all day. "I was truthfully good at it, but also antsy," he says.
By 1979 he was senior vice president and had founded the firm's energy division, building it to a $14 million practice.
Four years later, he would open Aretê Ventures Inc. of Rockville, Md.
He still manages five funds there, but formed his own business Aretê Corp., of Center Harbor, N.H., to concentrate on distributed technology and microgeneration. He manages the Micro- Generation Technology Fund, which can provide as much as $2 million in equity capital to companies developing micro-generation and related systems.
The only investors in Shaw's funds are utilities. Each investment is a blind pool. Investors put money in and Aretê invests it, then delivers a return.
So far the Micro-Generation Technology Fund has invested about $30 million, adding to the more than $100 million already pumped into other Aretê ventures. Some 28 of 65 investments are still active.
Shaw says he tries to see patterns in business before they're evident to others. Others see the patterns, especially in distributed generation, "but it's certainly not become a chorus yet."
Often, looking "at the signs" means actually stepping up and starting a business. In 1987, when Shaw saw an announcement by IBM that scientists there had discovered high-temperature superconducting materials, he realized the opportunity for such materials in the utility industry. He helped charter a company (em Superconductivity Inc.
"We created a company and financed it without actually having a ¼ specific objective," he says. "Other than to do something of importance to the utility industry with superconducting materials."
Superconductivity Inc. was the first to invent the micro-SMES, a voltage stabilization device.