One of the founding fathers of the Mid-Atlantic’s venture capital industry

Charles (Chuck) W. Newhall III is one of the founders, along with Frank Adams, of the Mid-Atlantic Venture Capital Association. With headquarters in Virginia and DC, MAVA is an organization that represents the interests of the regional investor and private equity community, and which formed a blueprint for similar associations elsewhere. Chuck is also co-founder 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. Throughout his long and storied career, Newhall has played an integral role in building the VC industry, with a focus on emerging companies and paradigm shifts in the Mid-Atlantic region. He remains an active investor and advisor, and currently serves as Chair of Greenspring Associates’ Industry Advisory Board.

Chuck Newhall spoke with citybizlist publisher Edwin Warfield for this interview.

EDWIN WARFIELD: Where did you get your start as an investor?

CHUCK NEWHALL: I started my career at T. Rowe Price. I ran a section of the New Horizons Fund called the Incubator Group, which was basically devoted to venture-backed companies that had gone public and fallen on hard times. I would go out to the Western Association of Venture Capitalists every year and the New England Venture Capital Association, which had similar meetings. And I said: “The Baltimore Washington Corridor, the Mid-Atlantic region, doesn’t have anything comparable to this, but we need to create it if we want to have a healthy venture capital environment in our own backyard.”

You see, California and Boston had two great advantages over Maryland: Venture capitalists didn’t have to get on airplanes, because there were so many companies in their backyard, whereas in Baltimore as a venture capitalist you would literally spend five, six days a week sometimes on an airplane going to board meetings. I wanted to change that.

I wanted to make the footprint of the organization similar to the venture capital area around San Francisco and the area around Boston, so I said that anything within a two and a half hour drive from Baltimore was in our area, and anything south or north. So, we really could take companies from Virginia, Washington, Delaware, Pennsylvania, and even some from southern New Jersey. That was in our footprint.

Well, we had a problem when we first started out: we didn’t have any money. We knew we wanted to have a fair where regional portfolio companies would present. There was the Maryland Department of Economic Development, and it was run by a man by the name of Selleck Solomon. And we went there. Ray Bank was with me—he was an associate at NEA at that time—and we made a presentation that we could host a fair and bring venture capitalists from all over the country to Baltimore to finance companies that are in the geographic region. He gave us a loan of $13,000 and we started making phone calls.

I forget what the fee was to attend the conference—let’s say it was $300. Well, we paid them back in about three and a half weeks and went on to raise somewhere between $250,000 and $400,000 at our conference, where our private companies presented to investors. That gave us the seed money with which to build the organization.

Every year, we would have a fair—in some case, we raised as much as $2 million off of a single fair—and that would support all the activities that we did: helping portfolio companies, educational programs, doing research on what was going on in the area. We became a very successful organization. I would have to say it was the most successful of all the regional organizations. Now, I’m not counting Boston and San Francisco in that.

Edwin Warfield, CEO of citybizlist, conducts the CEO Interviews.

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