On June 29, 1983, for one day, Italy looked like Silicon Valley. In Venice, at the Cini Foundation, an “Olivetti Day” entitled “Venture Capital” was scheduled: with Carlo By Benedetti, Elserino Piol and Bruno Visentini there were several important Americans among them the mythical Donald Valentine, founder of Sequoia, the most famous venture capital of tech startups.
According to reconstruction of the Olivetti Historical Archive “In the early months of 1980, in a phase of accelerated development of electronics, Olivetti set itself the problem of monitoring the progress of technology with greater attention and, where necessary, of being able to acquire innovation in the most timely manner. On the recommendation of the managing director Carlo De Benedetti, Elserino Piol therefore goes to the United States with the aim of creating a network of connections with the most innovative environments in the areas of Boston and Silicon Valley in California. On that occasion Piol comes into contact with the world of venture capital, still virtually unknown in Italy and in most of Europe. The experience of the United States shows that the venture capital mechanism, by facilitating the financing of the most innovative business ideas, enormously favors the development of new initiatives, especially in the high-tech area. Investments by individuals and businesses are channeled towards promising but risky business projects which would have difficulty in obtaining the normal support of the banking system. In this way, venture capital becomes an important solution for financing and promoting innovation, with results that in the US prove to be very positive for both new entrepreneurs and investors. Olivetti’s top management (Visentini and De Benedetti), informed and urged by Piol, are very interested in seizing the strategic, economic and technological opportunities offered by venture capital and a new investment season is starting for the company ”.
He writes Gianluca Dettori, president of the Italian association of venture capitalists: “Starting in the 1980s, Olivetti started investing in technology startups basically following three criteria:
- 1) the validity of the business idea and technological skills, regardless of whether the investment is profitable and consistent with the investor’s strategies;
- 2) the wide freedom of maneuver to the financed company, without claiming to integrate it into the group structure;
- 3) the risk sharing, that is not to acquire majority stakes and aim to create an articulated portfolio.
Modern venture capital is still based on these cornerstones today. Nothing has changed but one thing. At that time there were no venture capital funds: one of the first in the USA was Sequoia and one of the first in Europe was then Pino Partecipazioni, or Piol (for the uninitiated, Pino plays with the arboreal theme like Sequoia, but the reality is that it stands for Pi-ol + No- vick the two founders). The practice of venture capital was essentially born in the corporate world, even if now when it comes to corporate venture capital the logics are quite different (not too much) compared to the 3 cornerstones used by Olivetti. Between 1980 and 1995 Olivetti carried out 63 venture capital operations in the US, investing 138.7 million dollars, to then collect 313.3 million dollars from the exits. So venture capital earned Olivetti a lot of money (including the historic operation in which they sold Power Computing to Steve Jobs), but along the way Olivetti also acquired access to very important technologies, markets, talents and key agreements ” .
In reality we lost at least two huge opportunities, mentioned in a book by Dettori: the first when Elserino Piol brought De Benedetti to meet Steve Jobs and Steve Wozniak in the Cupertino garage; the two boys were looking for capital for Apple, but they were told “we are not bothering with these, we have more serious things to do”. Something similar, it is stated in the book, happened with Bill Gates, who offered Olivetti the opportunity to distribute his software offering Microsoft stock in exchange.
Closes Dettori: “What would have happened if in 1980 had a startup, corporates and venture movement started in Italy? Today we would compete on digital technology and beyond with Israel, the US and China ”.
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