Thoughts on Juniper’s Venture Fund

Yesterday Juniper Networks announced a $50-million venture fund. Called the Junos Innovation Fund, it will primarily target VC-backed early and growth-stage startups offering products and technologies that run on or with Juniper’s Junos network-based operating system.

Juniper will make fund investments during the next two years, focusing on networking technologies, applications, and services that further the development and deployment of security infrastructure, advanced mobility and video solutions, virtualization, network automation, optical technology, and green networking.

Juniper has pre-existing investments in 11 companies, including (but not limited to) Blade Network Technologies Inc., Packet Design Inc., and Ankeena Networks.

I sent some questions about the fund to Juniper’s PR and IR representatives, but I have yet to receive a reply. For the record, what follows are slightly modified versions of the questions I emailed to Juniper:

1) Will the investments focus exclusively on companies with existing development efforts connected to Junos?

My assumption is that Juniper will use the funding as an inducement to get intriguing startup companies to port compelling applications from other environments to Junos.

2) Will Juniper take the lead on some investments, or will it always look for a VC to take the lead position in a new round? (I am presuming that Juniper’s target companies will already have released product and been brought to the commercialization stage by earlier investments.)

3) What is the average investment stake Juniper is willing to make in target companies? Does Juniper have floors and ceilings in mind for its investment stakes?

4) What’s the typical equity position Juniper intends to take in its portfolio companies, and will that position come with strings attached, such as prohibitions against target companies working with Juniper competitors such as Cisco?

From the announcement and the coverage, I assume Juniper’s objectives are primarily strategic, but I suppose it would like to make money on its investments, too. That said, given the strategic imperative, I think the company will take a long view with the bets it makes.

Many startup companies in telecommunications and enterprise networking have struggled to raise money during the last couple years, so Juniper’s market intervention might give it leverage.

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