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2UDO+LVWRU\ZLWKCharles L. Lea, Jr. NVCA Oral History Collection This oral history is part of National Venture Capital Association (NVCA) Oral History Collectionat the Computer History Museum and was recporded under the auspieces of the NVCA. In November 2018, the NVCA transferred the copyright of this oral history to the Computer History Museum to ensure that it is freely accessible to the public and preserved for future generations. CHM Reference number: X8628.208 © 201 Computer History Museum National Venture Capital Association Venture Capital Oral History Project Funded by Charles W. Newhall III Charles L. Lea, Jr. Interview Conducted by Carole Kolker, PhD October, 2008 This collection of interviews, Venture Capital Greats, recognizes the contributions of individuals who have followed in the footsteps of early venture capital pioneers such as Andrew Mellon and Laurance Rockefeller, J. H. Whitney and Georges Doriot, and the mid-century associations of Draper, Gaither & Anderson and Davis & Rock — families and firms who financed advanced technologies and built iconic US companies. Each interviewee was asked to reflect on his formative years, his career path, and the subsequent challenges faced as a venture capitalist. Their stories reveal passion and judgment, risk and rewards, and suggest in a variety of ways what the small venture capital industry has contributed to the American economy. As the venture capital industry prepares for a new market reality in the early years of the 21st century, the National Venture Capital Association reports (2008) that venture capital investments represented 2% of US GDP and was responsible for 10.4 million American jobs and 2.3 trillion in sales. These figures, while significant, greatly understate the collective accomplishments of the venture capital industry. I’m pleased to have supported this project, which I believe will advance the understanding of the venture capital industry. This collection, along with Paul Bancroft’s Bay Area oral history project at the Bancroft Library at the University of California, Berkeley, and Paul Holland’s Silicon Valley project for the Western Association of Venture Capitalists, will add significantly to a growing body of venture capital memoirs available to the public sector. A special note of gratitude goes to each interviewee who generously gave of his time while candidly sharing his memories. Their recollections bring to life the dynamic story of venture capital in the 20th century, providing a powerful perspective on the history of this industry. Charles W. Newhall III Fall 2009 VENTURE CAPITAL GREATS A Conversation with Charles L. Lea Jr. Charles Lea began his career as a financial statistician with W.R. Grace & Co in 1952. Within a year, he had joined Bessemer Securities as a security analyst. In 1961, Charlie became a partner at F. S. Smithers & Co where he focused on small cap stocks and private start-up ventures, which included Damon Engineering, an electronics manufacturing firm that became a large chain of medical laboratories listed on the NYSE. Charlie joined New Court Securities Corp in 1969, an economic time he recalls as “dreary, at best, but a great time to make venture investments.” New Court’s investments included: Amgen, Cray Research, Federal Express, Monolithic Memories, Oximetrix and Tandem Computers. Of these, Charlie said, “Federal [Express] involved some pretty heavy lifting on my part. On the day it went public, I tendered my resignation. A five year struggle had come to a wonderful end.” In 1973, Charlie was one of the co-founders and on the inaugural board of the National Venture Capital Association. He recalls: “The NVCA was formed to bring to the attention of Washington — the Congress and the regulators — that jobs are created by small growing companies.” He said, “it was a testament to how awful the times were, to get all those independent cats in one room to even consider the problems.” In 1981, Charlie, and his friend John Birkelund, left New Court to start a new fund, Concord Partners. While organizing Concord, Nicholas Brady, Chairman of Dillon Read, asked Charlie and John to join forces with him in a senior capacity; John became president and Charlie became the managing director with responsibilities for Concord Partners. This relationship lasted until 1996, when Dillon Read was acquired by Swiss Bank Corp. Concord Partners I and II, with Concord Japan and Cord Capital, a European effort, represented just over $170 million in paid capital. Through the 1980s, Concord invested in a diversified list of technology and biotech companies: SanDisk, Tessera, and Gilead Sciences; energy companies: Vintage Petroleum (Occidental), Associate Natural Gas, and Meenan Oil; insurance: NAC-RE Insurance; and banks: Bowery Savings Bank and Team Bank Shares. Retiring in 1997, to Maryland’s Eastern Shore, Charlie has served as vice chairman of Shore Health Systems, a not-for-profit multi-hospital organization; director and chairman of the investment committee of the Midshore Community Foundation; governor emeritus of Washington College; and trustee-emeritus of the Chesapeake Bay Maritime Museum. Now spending the winters in Florida, Charlie applies his characteristic optimism to his golf game, claiming “it is one thing you can still get better at, at this stage in life.” The following is an interview with Charles Lea taking place at his home on Waverly Island Road in Easton, Maryland. Today is October 10, 2008. My name is Carole Kolker. THE EARLY YEARS Carole Kolker: OK. Let’s get started. I want to thank you very much for setting aside this time for me. I’m looking forward to our chat this morning. For the record, let’s start by looking back: When you were born, where you were born? Charles Lea: Well, I was born on December 2, 1927, in Richmond, Virginia — one of two. I was a twin; my sister Sally was born five minutes after I was, and that gave me the only element of superiority over her during her entire life. CK: I know that you left Richmond and moved. CL: My father and my grandfather had kind of a cantankerous relationship; that is to say, my mother’s father and my father, but they both worked for the same company. CK: What company were they working for? CL: It was called the Chamberlin Company of America. They were in home-improvements — weather-stripping, insulation — a variety of home products. In the Depression, people were improving where they lived as opposed to buying something new. If people had any money they would spend it on getting the roof insulated, saving the energy costs, putting in screens, weather-stripping the doors and so on. That’s what this company did. Well, VENTURE CAPITAL GREATS CHARLES L. LEA JR. ______________________________________________________________________________ my grandfather was in Baltimore, and my father was in Richmond. My grandfather died in 1933, and it was decided that my father should go up and take over and run the Baltimore operation. So off we went to Baltimore. CK: You’re seven-years-old? CL: Actually, I guess when I got to Baltimore I hadn’t been to school yet. I had no schooling at all in Richmond; there was nothing like kindergarten. You started in the first grade. That was the start of your school experience. CK: What were your parents’ names? CL: My father’s name was Charles and my mother’s name was Dorothy. Sally was my twin sister. I had a younger sister, Cissie. Her name was Dorothy, but nobody ever called her Dorothy. CK: Who did you get along with best? CL: I got along with my sisters pretty well, I think because I was a twin. Sally and I got along very well. The two girls got along pretty well with each other. So I don’t have any memory of any adversarial relationships there. They were pretty good companions. ______________________________________________________________________________ 2 VENTURE CAPITAL GREATS CHARLES L. LEA JR. ______________________________________________________________________________ CK: There was not a lot of competition? CL: Sally was a better athlete than I was. I wasn’t a bad athlete. I just wasn’t a very big one. For a male I was pretty small, but she was a superb athlete. For example, in ice-skating, she could do spins and pirouettes and all that stuff, and when I got out on the ice my ankles were like that [shows wobbly ankles].(laughter). So I never learned to do much in the way of ice-skating. She could play tennis like crazy. My father also was an excellent player. I never played tennis; I played all the things that are nonsense for a smaller man. I played football. And ultimately, I came to my senses and took up lacrosse, and I played in prep school and in college, when I finally got there. That’s what we did. CK: You were telling me about your home life in Baltimore during the Depression, which I found quite interesting — about what your mother was doing and your father.. CL: Well, we wound up living for the longest period of time at 511 Edgevale Road, in the north area of town called Roland Park. This was a nice suburban house in a very nice community of suburban houses. I lived about a mile and change down the hill from the Roland Park Public School No. 233. When I first started this school, I was taken there and then very quickly learned to make my own way. In those days, the public schools were in great shape. They had wonderful teachers because it was the Depression, and it was a job that paid on a regular basis, and it was a desirable position to have. The teachers were all reasonably forceful. They put up with absolutely nothing, and you paid attention.

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