When Intel Capital announced its plans to rotate from the Intel semiconductor in January, it came as a shock given that the firm has been operating as an investment of Intel enterprises since 1991.
In many ways, this decision marks the end of an era for what is regarded by some as the first firm of capital entrepreneurship of all time. The firm was founded nearly 35 years ago and has supported visible enterprise technology companies, including: Docusign, Mongodb and Hugging Face, among nearly 2,000 others.
But for Mark Rostick, Vice President and senior manager at Intel Capital, the transition represents a new opportunity for the VC while allowing the firm to maintain much of its benefits like CVC.
Rostick joined the firm in 1999 after a friend on Intel Capital recommended that he try to get a job there. Rostick, who was not enjoying to work as a technology licensing lawyer at the time, took it into it. After he met the team, he said he would do nothing – even on the floors – to be included.
“You have to work with the smartest people in the world,” Rostick Techcrunch told. “The hardest thing to do in business is to start something out of nothing and take it to leave the land literally. These are the most delightful people to sit with it because they are doing something special. Combining being able to use the training I had (combined) with working with the most difficult thing in business, it was irresistible to me.”
Rostick has stalled for more than two decades and has seen the firm invest more than $ 20 billion in more than 1,800 companies while collecting more than 700 initial exits.
Intel Capital’s opinion rotating by her parent company was not a new one, Rostick said, and was discussed many times in the past. The debate always focused on the benefits and the evils of how the firm would be able to move faster, or be more versatile, on its own, but how much the firm would have to give up without a parent company.
But these conversations began to become more serious in early 2024 and became concrete last fall, Rostick said. He added that he and Anthony Lin, the head of Intel Capital, were able to start making the team calmly with the idea of hitting them themselves.
“We thought our record of the record deserve attention from external investors,” Rostick said. “We had done it really well, though, you know, many of the entrepreneurship industry have not been able to make exit, we would have some success by making it, so we felt as if we were we could position themselves as an external part there.”
He added that Astra Lab’s exit last year helped in their time. Intel Capital originally supported Astera Labs in 2018. The semiconductor company was released in March 2024 with a $ 5.5 billion rating. Astera Labs a year later has a $ 9.8 billion market cap, making it one of the most successful exits supported by the 2024th venture.
This success, Rostick said, may have also shown possible LPS that Intel Capital was a firm that was making the right bets and seeing capital returns with very few entrepreneurship -backed exits. Last year, the US -backed output reached $ 149.2 billion, according to Pitchbook data, which is significantly lower than years like 2019, $ 312 billion, even when you exclude distant years like 2021, $ 841 billion.
It is not 100% clear that everyone on Intel Capital were actually on board with the difference. At the level of the management director, there has been numerous departures as these spinoff talks would have begun to become serious including: Mark Lydon, Arun Chetty, Sean Doyle and Tammi Smorynski, they had all been in the firm for more than 20 years, as Axios was originally reported.
An Intel Capital spokesman said the latest departures were not linked to the news of the firm being revolved.
This action also comes at an interesting time for the firm’s parent company which has had a shocked year. Former CEO Pat Gelsinger suddenly withdrew on December 1 – he had been in discussions with the firm for rotation outside, Axios reported. The company has long had to delay the opening of its Ohio chip factory again and decided not to bring its chip to Falcon Shores. She also added Lip-Bu Tan as its new director general who is suspected to have comprehensive changes in mind for the company.
Regardless, the spinoff continues.
The firm expects to be completely independent somewhere in the third quarter of 2025, Rostick said. The new firm still named will look very similar to Intel Capital now, he added. The firm will keep Intel as an Achor investor and will still invest in early phase in the same areas: he, cloud, equipment and border technology, among other things. The firm is likely to raise funds shortly after the official spinout.
“We have accompanied the idea with people and feel like we have received a very good answer,” Rostick said. “We are not naive. We know it will be a difficult process.”
The success of this new solo firm with it is on the market to decide. But in the meantime, despite everything else, Rostick said the firm mainly continues to function as a business as usual.
“We are investing in new opportunities, actively looking for them,” Rostick said. “We are keeping the portfolio by following where it is deserved and makes sense to everyone. And, you know, managing portfolio exits as we would always do. When we make the passage, we continue to continue with the same speed as we have gone today, this has always been the plan.”
