Charles (Chuck) W. Newhall III is one of the founders, along with Frank Bonsal, Jr., of New Enterprise Associates: the world’s largest venture capital firm in terms of assets under management, and one of the oldest VC firms in the US. NEA focuses on investing in technology and healthcare companies across the world and throughout all stages of growth. Since his retirement as General Partner, Newhall has played an integral role in building the VC industry and is the founder of the Mid-Atlantic Venture Capital Association—an organization that represents the interests of the regional investor and private equity community, and which formed a blueprint for similar associations elsewhere. Today, he serves as Chair of Greenspring Associates’ Industry Advisory Board. Bonsal, who is also retired, has remained an active investor and advisor.
Chuck Newhall and Frank Bonsal were recently honored at a tribute event held at Baltimore’s Center Club. They spoke with citybizlist publisher Edwin Warfield for this interview.
EDWIN WARFIELD: Can you tell us about starting NEA? How did the founders coordinate their different roles?
CHUCK NEWHALL: When we started out, I used to call us an organ grinder and two monkeys. Dick [Kramlich] was the organ grinder and Frank and I were the two monkeys.
Q. What made NEA successful as a venture firm?
A. What made NEA successful? Well, I think Dick was a superb investor. He was in California, and he had been Arthur Rock’s partner, so he was in the mainstream of the deal flow out there. Frank was probably the best bird dog in the country. I remember he’d go into a city and he’d go get a Yellow Pages—I don’t know how many of you remember what the Yellow Pages were—but he’d rip them out of the telephone book and then look through companies he could call to see if we could go visit.
Q. What advice would you give to investors active today?
A. I think if you really get involved with the right companies, you can build a franchise. Because what makes New Venture Capital unique is the fact that you have a unique deal flow, because you funded—like in NEA’s case—800 companies. You get these companies coming back to you, back to you, back to you when they start new businesses. And so, if you can build that coterie of what I call “legacy venture deals,” they will provide their own deal flow to you over time.