Esprit Telecom's co-founder and president, Michael Potter, will leave the company after its acquisition by US carrier Global Telesystems Group (GTS) he announced this week.
Potter's eight years guiding Esprit peaked in December when the company accepted a $4.1 billion takeover offer from GTS. Potter says he is leaving to start a venture capital firm to fund Internet projects in Europe.
"We started the Esprit project eight years ago and were concerned at the time to create the leading independent carrier in Europe," Potter told 'Newswire'. "Eight years later we feel we've largely achieved the goals we set out."
"Especially in light of the GTS deal, we've absolutely solidified the group's position as the largest carrier in Europe. I now want to go on to another exciting project," he said.
Washington DC based GTS already owns the Hermes Europe Railtel network, Internet transport service provider Ebone and long distance provider Netsource Europe. GTS also has 622Mbps capacity on the Gemini transatlantic cable.
However, Potter's time at Esprit was not always easy. Last year a board room battle erupted after its other co-founder, Walt Anderson, called for the removal of several senior executives following his removal as chairman. Shareholders later voted against Anderson's proposal and removed him from the board.
"Board fights happen occasionally but only a few reach the public. With Esprit it was unfortunate that it got to that level," said Potter, "With different groups of people you can have legitimate differences of opinion. In this case it just got heated up."
Now Potter has his sights on funding European Internet start ups. "Looking at the industry, there is tremendous excitement in the Internet and content areas. I want to be a part of the Internet and convergence industry in Europe," he said.
His new company, Paradigm Ventures, has received $100 million in commitments from investors. But while most of the cash has come from the US, Silicon Valley in particular, almost all Paradigm Ventures' activity will be focused on Europe, Potter said.
Venture capital is still immature in most parts of Europe, except the UK, said Potter, but the situation is changing. "When Esprit went out eight years ago looking for financing, the consensus was that if you were a family business and profitable, venture capitalists were happy to invest. Now the concept of risk has finally struck in," he said.
Potter says he wants Paradigm Ventures to exploit the convergence of voice, data and video: "Even a few months ago people were talking about telecoms, Internet and broadcasting as separate things, now they are consolidating. I'll be trying to speed up that consolidation."
This week's $500 million investment by Microsoft in UK cable company NTL is exactly the type of area Paradigm Ventures is going to focus on: "The things people traditionally viewed as very separate," he said.
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