David Cheriton

Not many smart people outside of the Valley know of, or have heard of, Dr. David Cheriton. Thus, I thought he was worth mentioning.

Professor Cheriton is a billionaire at 53.  That’s right, a billionaire.

How did he make his money, you ask?  Well, it wasn’t from teaching and researching at a University, I assure you.  Not even Stanford, where he is currently a Professor. http://www.stanford.edu/~cheriton/

(He leads the Distributed Systems Group there)  http://www-dsg.stanford.edu/index.html

But, wait a minute, in a sense this did make him a billioniare. Not directly but indirectly. You see, very early on, Canadian-born Cheriton started investing in Stanford-related technology ventures in the early stages. And it was this that made him a billionaire.

Thus we have this lesson again, that we also learned from Motwani: The “Professor-Investor” role Universities should encourage this, don’t you agree?    A a lot of universities, you have a lot of talk about “conflict of interest”. What exactly is that and why is it a bad thing? Aren’t we all confronting conflicts of interest in our daily lives?  Even the President of Stanford said “Who says conflict of interest is a bad thing”?

A friend of mine said recently of the UK “That (professors investing in their students startups)  would never happen in this Country.


Why not?


“Because it would be viewed as unethical”

Well, who says its unethical.

I would propose the antithesis.

“Is it unethical for Professors not to invest in student startups at their university”

Ponder that one for a bit.


Look at what happened with the US equity markets. Take away the “Chinese firewall” between the trading desk and the equity analysts, and formalize and legalize the distance and put up an American brick wall, and the markets faulter. They have never really recovered, and many of the smaller issues can’t get equity research coverage and thus faulter for lack of liquidity.

You might think I’m off on a tangent. But back to David. No use in repeating what we can learn from Wikipedia so have a look.  http://en.wikipedia.org/wiki/David_Cheriton


You’ll learn he co-founded Granite Systems with Andy Bechtolsheim (also not born in the USA but a Silicon Valley immigrant, further nailing the coffin of the anti-immigration argument that abounds in so many countries and is ignored by so many technology policy analsysts, advisors and decision-makers).   Andy was a PhD student at Stanford, and a co-Founder of SUN Microsystems as well. It seems that David and Andy are friends, and have worked together on projects. Andy probably appreciates the brilliance, and academic insight of David, and gets him involved with potential ideas early-on, bouncing them off of, and developing with, David.

Andy was David’s student, by the way.


David is also credited with helping co-founders Larry and Sergy of Google get introduced to Kleiner Perkins.  So here we see the role of “Academic Screen” or “Academic Matchmaker” or better yet “Academic Boutique Investment Banker”.

David made the Forbes Midas list:



Interesting to note from this entry that he is a “Self-professed sucker for young hotshots with new ideas”

Isn’t that just what a Professor should be, period? Why are so many not? In the general sense?

We’d like to interview him to learn more.  Let’s do it.

  1. #1 by Rory on March 21, 2010 - 21:36

    Good point. Why is it unethical? Could anybody help shed light on this?

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