Investor combines interests in science and business.

IN his youth, Brad Jones had two great interests: science and business. After graduating with degrees in physics and chemistry from Harvard University and getting an M.B.A. from Stanford University, he was looking for a way to connect these disparate pursuits. He didn't want to teach in a lab, yet he didn't want to abandon science for a career in business.

Right out of school, he found the perfect solution: the world of venture capital, joining up in 1981 with Brentwood Associates, then one of the few venture capital houses in Los Angeles.

Jones' timing couldn't have been more perfect. In the early 1980s, venture capital was evolving from a general investment vehicle to one focused on emerging technologies. "I like the fact that it's a business that uses cutting edge science and technology," Jones said.

Jones soon became one of the premier venture capital dealmakers in the technology arena. Among his more notable investments: $4.5 million in Xylan, a computer networking company that went public and eventually netted Brentwood $260 million; and Internet content distribution company Sandpiper Network, where Brentwood's $4 million investment yielded a return of $131 million. At one time, Jones sat on 12 boards of companies Brentwood invested in, a commitment that he called "pretty overwhelming."

In 1999, at the height of the dot-com boom, Brentwood split off its technology and health care venture capital practices; Jones was tapped to head the technology side, which was renamed Redpoint Ventures. Redpoint continued to seek out mostly early stage companies, generally making investments in the $5 million to $10 million range, using funds from university endowments and other venture "funds of funds." With Jones at the helm, the firm has consistently ranked among the top venture capital outfits in the L.A. region.

"Brad Jones is one of the most senior and respected venture capital guys in the region," said John Morris, managing partner of GKM Venture Partners.

Jones now sits on the boards of eight companies, including Stamps.com, Apriso and SOA Software. While that may be a larger commitment than most venture capital partners, Jones said the number fluctuates as companies get bought or go public.

He has key conditions for investments. "I have a preference for companies that have core technology or intellectual property and that are operating in a big target market," he said. "I look for something that they do that's difficult that others can't do." Such companies are typically in niches with high barriers to entry, which he said enhances a company's chances of success.

Of course, companies that attempt to do difficult things with technology often fail, which is why Jones said the biggest challenge he faces is judging whether the people running the company are going to be successful. "We've backed some very good experienced people who ended up not being able to run a company very well, and we've also encountered our share of relative novices who were able to run their companies well."

One notable failure for Jones was Fandom, the Santa Monica-based entertainment company that went on an acquisition spree and then flamed out itself in 2001. Redpoint had pumped $9 million into Fandom.

As for an overall exit strategy for Redpoint's investments, Jones has a simple maxim: "Whatever makes us the most money." If the initial public offering market is weak, as it has been recently, Redpoint will look for strategic buyers for companies it has invested in.

In Southern California, Jones said dealing with the spread out nature of the technology community is a challenge. "It's hard to know where your next good investment will come from," he said. On the other hand, with fewer venture capital firms here than in Silicon Valley, he's thankful it's not as "hypercompetitive."

PROFILES

Executives in L.A.'s venture capital sector discuss their background, strategies, hits and misses.

HOWARD FINE

Staff Reporter