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PROFILE: Earth Angel

PROFILE: Earth Angel

VC Vern Yates Has Made A Career of Unique Jobs; Retirement Won’t Change That





BY BRAD GRAVES

Staff Writer

ern Yates has had several unique jobs.

At age 66, he’s not about to go traditional.

Though he considers himself retired, Yates works half the week , and often longer , as an angel investor.

With the Tech Coast Angels, he consults with startups and evaluates new companies for potential investment. If a company shows promise, venture capitalists eventually get involved.

This comes after a career of working in new technologies.

In the 1960s it was communications for the moon missions.

In the 1980s it was desktop computers and ATMs. He worked to link automatic teller machines in the days when the concept of going to Bank A to withdraw money from Bank B seemed absurd.

“The one common thread,” Yates said, “is that I’ve been in some form of startup activity for almost all of my working life.”

Yates is currently chairman of Ameranth Wireless, Inc. The San Diego company makes software that allows waiters, housekeepers and others in the hospitality industry to use Pocket PCs and wireless connections to do their jobs.

He’s also chairman of San Diego-based Vectron, Inc., which makes automated equipment for inspecting printed circuit boards.

Adviser And Board Member

Yates serves on the boards of San Diego-based Filmetrics, which makes systems to measure the thickness of film coatings, and Fallbrook-based Controltec, Inc., which makes software for the subsidized child-care industry.

He’s an adviser to San Diego-based Path 1 Network Technologies Inc., which makes technology to deliver video over the Internet. “Think in terms of being able to run flicker-free television over an Ethernet,” he said.

One could argue Yates has the best of both worlds.

He spends part of his time on investments and consulting. Yet he has ample time for golf, hobbies, family and travel.

Yates and his wife, Patty, have been married 45 years. They have five children living across the United States, and six granddaughters.

That alone is reason to travel. Vern and Patty Yates also enjoy going out of the country, and did not let the terrorist attacks cancel a mid-September trip to Germany and Austria.

While at home, the couple enjoys being outdoors. Vern Yates plays golf but is not quite as avid about the sport as Patty Yates.

Vern Yates also has a “garden railroad” in a courtyard of their Del Mar home. Large-scale equipment by LGB runs through a landscape of dwarf plants, which need occasional pruning. The project is “more garden than railroad,” Yates said.

Time Consuming

Not having a full-time job is “almost one of the prerequisites” to being an angel investor, Yates said. Hours vary, but research and other aspects of the work can take a lot of time.

They also bring a certain measure of satisfaction.

Yates said he enjoys working with entrepreneurs. Part of his consulting he does for free, with a group called the Chairmen’s Round Table.

Yates’ rapport with young, driven chief executives is excellent, said Robert Kibble, managing partner with San Diego-based Mission Ventures.

Kibble said part of that success lies in Yates’ ability to listen, and his non-threatening approach to people.

Yates also possesses a cool reason. He can calm impassioned people, Kibble said, and sort out the pros and cons of a business situation.

Then there is Yates’ experience with service industries, as well as hardware and software manufacturing. “He’s just seen it all,” Kibble said.

Vern Yates was born in Decatur, Ill., and grew up in small towns of the Midwest. He received a bachelor’s degree in electrical engineering from George Washington University in Washington, D.C., which he attended on a football scholarship.

Communications Systems

Air Force service during the late 1950s gave him early exposure to data and voice communication technology.

“We called it radio then,” he said. “It’s ‘wireless’ now.”

Sales and marketing jobs with Collins Radio (later Rockwell Collins) followed. Here he was involved in communications systems for the Apollo program.

He spent roughly a decade at a startup called ComTen, which specialized in connecting mainframe computers. NCR eventually bought that company and took Yates with it.

At NCR, Yates worked on two internal startups. First was an automatic teller project. Then there were personal computers. NCR barely made it into the top 10 of computer makers but did all right, producing products that carried the Honeywell and Siemens brands.

“When I left NCR, it was a half-billion-dollar business and we started it from scratch,” he said.

Recruited To San Diego

After his time with NCR, Yates was recruited to come to San Diego, where a telecom company called Primary Access needed a CEO. He was there three years. He spent three more years in the Midwest helping Deluxe Corp., the check-printing people, set up an electronic payments system. (Primary Access eventually became part of 3Com, while the Deluxe business was spun off into a publicly traded company called Efunds.)

Work at Primary Access and Deluxe postponed his retirement plans, Yates said. By the mid-’90s he was done with both, back in San Diego, prepared to retire, but getting calls from people who needed advice and angels.

In 1997 Yates helped start an informal group called the San Diego Band of Angels. In 2000, the group joined the Tech Coast Angels. Originally in Orange County, the Tech Coast Angels has expanded into San Diego and Los Angeles.

Members of the group do joint research on companies. It’s then up to individual members to invest.

UCSD’s Connect program provides administrative and other support, not to mention an on-campus meeting place.

Anette Asher, Connect’s director of programs, said Yates provides financial support and informal counsel to the university entrepreneurship program.

“He becomes a good reality check for us,” she said.

Risks Involved

As early investors in business ventures, angels take significant risks.

Consider San Diego-based enonymous.com and CollegeClub.com. Yates was a board member of the former, and eventually helped shut it down in 2000 to prevent further losses. He was an adviser to the latter, which filed for bankruptcy in 2000 and was purchased by competitor Student Advantage.

Then again, Yates was a board member of Sandpiper Networks of Thousand Oaks. He and other San Diego angel investors benefited when San Francisco’s Digital Island paid about $1 billion in stock for the company in October 1999.

BizRate.com (a San Diego company), Alitum, and MineShare are other businesses Yates has helped, either as a board member or adviser.

Yates currently advises Fetch Technologies and Metapa, both in the Los Angeles area, and Teleflage, a San Diego company that camouflages things many people consider eyesores: cell phone towers.

In the years after the e-commerce boom, Yates said investors are concentrating on basic software and hardware. Money is also moving more into life sciences.

Must-have technologies, or “painkillers,” do better than convenience technologies, or “vitamins,” he said.

“If it’s not a painkiller,” Yates said, “it’s hard to fund these days.”


SNAPSHOT: Vern Yates

Job: Angel investor and consultant

Education: Bachelor of science, electrical engineering, George Washington University

Age: 66

Birthplace: Decatur, Ill.

Residence: Del Mar

Family: Wife, Patty; five children; six grandchildren

Hobbies: Travel, golf, garden railroads

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