Fahri Diner is one of those unique people who has enjoyed being on both sides of the table, as a startup founder and a VC investor. He sold his own company for $3.52B, started a fund with $2B in assets, and has since gone on to raise $150M for a new venture.
On the DealMakers podcast, Fahri Diner shared his journey into entrepreneurship, the advantages startups have in this environment, his fundraising strategy, and much more.
From Exchange Student To Engineer & Entrepreneur
Diner was born on the small Mediterranean island of Cyprus.
In high school, he had the opportunity of coming to Boston as a foreign exchange student. The father of his host family was an IT graduate and electrical engineer. It was an inspiring year, which set his mind on the single focus of coming back to the US to study engineering himself. This plan relied on him securing a scholarship. He received an academic scholarship and a ticket to studying in Florida.
His biological father was both a chemical engineer and an entrepreneur. He continues in the olive oil business to this day, even at 80 years old. So, through DNA and the exterior influences he was exposed to he seemed destined to end up at the apex of both of these things.
After earning his engineering degree Fahri Diner dove into product management and fiber optics. He spent time working with OZ Optics, Siemens, Pirelli and AT&T. “I Can Do That Too”
Farhi was working at Pirelli when a new startup Ciena moved in and moved faster. They built and pulled off a large IPO on the same type of work he was doing. That was his “I can do it too,” moment.
Before going it alone, a friend hooked him up with Siemens. He saw an opportunity to build a company within Siemens, and then spin it out. Of course, with all big companies, when it came to the exit they were just moving too slowly. Out of this frustration, he decided to just leave and go fast with his own company, Qtera.
Still a young guy from Cyprus, armed with an idea, a PowerPoint, and passion he raised a $5M funding round from Battery Ventures.
It was a hardware company that moved fast. Three and a half years later they scored an incredible outcome.
Nortel was among the big companies under pressure to defend their positions. So, after having raised $35M in equity Qtera sold to Nortal for $3.52B. A stock that doubled six months later. For early investors like Battery, that meant getting back around a billion dollars for a $10M investment. In just over three years.
The Startup Advantage
From his experience, Fahri says that startups can win when they execute quickly. If you can move fast and make decisions faster than the big companies, they really ultimately have to buy you. The truth is that when it is a game of a small unknown company competing for customers against a large established brand, consumers are likely to trust the incumbent more. However, if you can be first to market, you have something they don’t and can’t offer.
You will make mistakes. You will be set a step back for every two you take forward, but if you are moving faster you can still beat them.
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