Intel Capital’s announcement to spin out from Intel, the semiconductor giant, in January came as a surprise, given its 30-year history as the company’s venture investment arm. The firm’s decision marks the end of an era, as it has been considered one of the first corporate venture capital firms, backing notable enterprise tech companies like DocuSign, MongoDB, and Hugging Face.

However, for Mark Rostick, vice president and senior managing director at Intel Capital, this transition represents a new opportunity for the VC firm, allowing it to maintain many of the benefits it had as a CVC. Rostick has been with the firm since 1999 and has seen it invest over $20 billion in more than 1,800 companies, with over 700 startup exits.

Rostick’s journey with Intel Capital began when a friend recommended he join the firm. He was immediately drawn to the opportunity to work with innovative entrepreneurs and has since become an integral part of the team. “You get to work with the smartest people in the world,” Rostick said. “The hardest thing to do in business is to start something from nothing and get it to literally leave the ground. Those are the coolest people to hang out with because they’re doing something special.”

The idea of spinning out from Intel had been discussed several times in the past, but it wasn’t until the beginning of 2024 that the conversations became more serious. Rostick and Anthony Lin, the head of Intel Capital, worked to get the team comfortable with the idea of becoming an independent firm. “We thought our track record merited attention from outside investors,” Rostick said. “We had done really well, even while the venture industry hasn’t been able to realize exits, we’d had some success doing that, so we felt like we were an outlier there.”

The success of Astera Labs, a semiconductor company that Intel Capital initially backed in 2018, helped with the timing of the spinout. Astera Labs went public in March 2024 with a $5.5 billion valuation and now has a market cap of $9.8 billion, making it one of the most successful venture-backed exits of 2024. This success may have shown potential LPs that Intel Capital was a firm that made the right bets and saw capital returns, even in a challenging market.

According to PitchBook data, U.S. venture-backed exits totaled $149.2 billion in 2024, significantly lower than in previous years. Despite this, Intel Capital’s success with Astera Labs demonstrated its ability to make savvy investments and achieve strong returns. However, not everyone at Intel Capital was on board with the change, as several managing directors have departed since the spinout talks began, including Mark Lydon, Arun Chetty, Sean Doyle, and Tammi Smorynski.

An Intel Capital spokesperson stated that the recent departures were not tied to the news of the firm spinning out. The move comes at an interesting time for Intel, the parent company, which has faced a tumultuous year, including the sudden retirement of former CEO Pat Gelsinger and the delay of its Ohio chip factory. The company has also decided not to bring its Falcon Shores AI chip to market and has appointed Lip-Bu Tan as its new CEO, who allegedly has significant changes in mind for the company.

Despite the challenges, the spinout continues, with the firm expecting to be fully independent by the third quarter of 2025. The new firm will retain Intel as an anchor investor and will continue to invest in early-stage startups in areas like AI, cloud, devices, and frontier tech. The firm will likely fundraise shortly after the formal spinout and will maintain its current investment strategy.

Rostick acknowledged that the process will be difficult but expressed confidence in the firm’s abilities. “We’ve socialized the idea with people, and feel like we’ve gotten a pretty good response,” he said. “We’re not naive, we know it’s going to be a challenging process, but we’re committed to making it work.”

In the meantime, Intel Capital continues to operate as usual, investing in new opportunities, maintaining its portfolio, and managing portfolio exits. Rostick emphasized that the firm’s goal is to continue operating at the same speed and level of excellence as it has in the past. “We’re investing in new opportunities, actively looking for those,” he said. “We’re maintaining the portfolio by doing follow-ons where it’s merited and makes sense for everybody. And, you know, managing portfolio exits as we always would. When we make the switch over, we keep going at the same speed as we have been going today, this has always been the plan.”