The Free Press, Mankato, MN

State, national news

April 13, 2014

Politics test Silicon Valley's Russian ties

(Continued)

Experts say an investment slowdown will be temporary and will not untrack rapidly growing, lucrative U.S.- Russia business relationships in the long run.

Axel Tillmann, who invests Russian venture capital on behalf of government-sponsored RVC-USA, said the tensions are definitely going to "slow things down for a while," describing a two- to three-month suspension of additional investment by Russian government funds in tech firms.

However, Tillmann said the flow of investments is certain to resume because Russian companies thrive on Silicon Valley's entrepreneurship.

"Russian technologists have been at the leading forefront of technology for many years, even going back to the Soviet Union, but they had the problem they called 'The lonely ideas,'" he said. "The ideas just sat there."

Tillmann said the one thing Russian companies are not very good at today is commercializing their technology — something that Silicon Valley firms are masters at doing. "When we combine, we get the best of both," he said.

In Russia, entrepreneurs and investors now tap Silicon Valley experts to try to replicate their success.

A planned technology hub outside Moscow, the Skolkovo Innovation Center, includes Google executive chairman Eric Schmidt, Cisco CEO John Chambers and retired Intel CEO Craig Barrett on its 17-member board.

Russian entrepreneurs have also launched their own firms in the Silicon Valley, and tech giants are buying stakes in Russian startups. Last year, for example, Cisco acquired a stake in Russian software developer Parallels and got a seat on its board.

The Russian Innovation Center, which opened two years ago on Silicon Valley's Sand Hill Road amid a cluster of venture capital firms, combines three firms investing in California companies committed to the Russian market.

And today more than 100 Russian high-tech firms have representative offices in the northern California region, including Russian search engine Yandex, which employs former Yahoo and Google engineers at its Palo Alto laboratory.

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