• Serial Entrepreneurs Rick Marini and Michael Levit are Selling Companies to China — for a Lot of Money

    img_0755Michael Levit knows a thing or two about China. As an executive vice president at the e-commerce services company Vendio, he stayed with the company for six months after Alibaba agreed to acquire it in 2010. (It marked the Chinese conglomerate’s first U.S. acquisition.)

    Levit says it was long enough to develop a consumer shopping project called Dealio that Alibaba had no interest in owning. So, he helped spin it off, renamed it Spigot, and eventually turned it into an application advertising company. (Users installing one app would receive a suggestion for another.) Roughly a year ago, Spigot also sold to a China-based company, publicly traded Genimous, for a reported $252 million.

    Now Levit is taking the lessons learned from those experiences, and turning it into his next startup. Specifically, he has teamed up with longtime friend and advisor Rick Marini — cofounder of Tickle (sold to Monster) and Branch (picked up by Hearst) —  to form Dragonfly Partners, a new advisory firm that’s matching U.S. companies looking to get sold with China-based companies that are hungry for revenue.

    They’ve also brought in a third partner, Gary Hsueh, who was most recently Yahoo’s global head of search partnerships and an investment banker with Goldman Sachs before that.

    I sat down with Levit yesterday to learn more about the business, and how it might help Silicon Valley founders who might be ready to hand over the keys.

    TC: This business sounds perfectly timed. What inspired it?

    ML: Selling Spigot was wonderful, but the sales process was very challenging and tedious, and partially that’s because there aren’t many people who understand cross-border transactions and specifically how you take a U.S. company and sell it to China. Thankfully, I still have a number of friends from my Alibaba days, including David Wei (who was Alibaba’s CEO when Vendio was bought). He remains one of my mentors and helped us through that process.

    TC: How many companies have you been working with, and have you sold anything yet?

    ML: The first two companies that we advised informally are [the ad tech company] Media.net, sold to a Beijing-based company called Miteno for $900 million in August, and [mobile ad tech company] AppLovin, which sold last month to the private equity firm Orient Hontai Capital for $1.4 billion.

    TC: You’re not an investment bank, but it sounds like you’re not far afield from one.

    We’re akin to being an investment bank, though frankly there are a lot of people on the ground in China who are formal investment bankers [working with us]. What [we’re more focused on is talking with entrepreneurs about] whether China is real, what do the numbers look like, what do [China-based companies] want, how do you create your financial forecast, how do you create the right PowerPoint presentation, and help put those materials together before you even meet with a bank. Then we make the introduction to the bank.

    TC: Which banks are you working with?

    ML: There are a couple that we work with, including CV Capital. We’re also starting to work with [the private equity firm] CSC Venture Capital [the private equity firm that has committed to invest $400 million on the AngelList platform].

    You have massive pools of capital in China that want to be deployed in the U.S.; you have entrepreneurs in the U.S. who want do business in China. What’s missing is a level of trust and understanding of how the two sides do business with each other. CSC solved that problem in part by partnering with AngelList. We’re doing something similar for much bigger deals and for M&A.

    Frankly, some companies in China will promise you the sun, moon, and stars, and won’t give you any of it. Conversely, there are other companies that are soft-stated and that you’d never find and that have $90 billion [in market cap]. There are multiple entities like that because of the scale of China. We want to be the trusted layer that helps founders find those entities.

    More here.

    (Pictured above: Michael Levit.)

  • Watch: Marc Andreessen on Twitter, Secondary Sales, Pulling the Plug, and More

    On Thursday night, at a StrictlyVC insider event, I interviewed famed entrepreneur-investor Marc Andreessen, whose most recent headline-grabbing maneuver (intentionally or not) was to take a Twitter break one week ago.

    I talked with Andreessen about why he has had enough of the social media platform for now, along with a lot of other things. For those of you without the time or inclination to watch the entire 50-minute interview, I’ve broken out some of what I asked Andreessen, and where you can find his specific answers. (I’d write out his comments, but anyone who has seen Andreessen speak can attest that he talks in wide-ranging paragraphs, so we thought this might make more sense.)

    First 4 minutes or so: Twitter stuff. Andreessen suggests he left for now owing to today’s highly politicized environment, saying he feels “free as a bird” as a result. My colleague over at TechCrunch, Katie Roof, wrote a related story here.

    At 4:00: We talk about whether he still believes that there are 15 companies per year that will go on to create at least $100 million in annual revenue (and that those are the firms top VCs must back to stay on top). It’s the thesis around which Andreessen’s venture firm, Andreessen Horowitz, was founded in 2009. My question more specifically is whether that number has grown larger or smaller or remained static.

    Around 9:00: I asked if more of the winners — no matter their number — are being created outside of the U.S., Silicon Valley-focused Andreessen Horowitz is perhaps missing them.

    At the 11:20 mark: Here, Andreessen answers whether too much money is finding its way to Silicon Valley and what the impact might be if so.

    At 16 minutes: Andreessen answers why today’s private companies — which Andreessen has argued can better compete with public companies (versus other public companies) — won’t run into the same exact constraints as their public company counterparts when they eventually go public, too.

    At 18.5 minutes: Here, I bring up Bill Gurley’s recent theorizing that once Uber goes public, it will be expected to be profitable, and its well-subsidized, still-private competitors will undercut it on price and try to steal market share. I ask whether this is a concern for Andreessen-backed Lyft and others of its portfolio companies.

    At 22 minutes (ish): Andreessen talks about why it’s easier but not absolutely necessary for founders to implement a dual-class structure in order to maintain control of their companies once public.

    Approaching 23:30 minutes: I’ve just asked Andreessen why, despite an uptick in M&A by nontraditional tech acquirers (think General Motors and the many private equity firms to go shopping this year), we aren’t seeing more acquisitions by Google, Facebook, or Amazon.

    28:00: Now we’re getting into specific questions about Andreessen Horowitz, starting with whether or not Andreessen thinks the firm changed the game on the field by paying more for deals than Silicon Valley investors had ever seen.

    At 31:30: I note that Andreessen Horowitz missed what seems to be the biggest winner of the last decade: Uber. I ask how that impacts the firm. He doesn’t love this particular question, and steers the conversation down the path of why it makes sense to lead more than one round in a winner (which also came up in my question).

    At 35:00: I reference a 2015 New Yorker profile of Andreessen, which noted the daunting amount of capital the firm will need to produce for investors who’ve given the firm a whopping $6.2 billion, assuming they expect a venture-like 5x to 10x return. He tells me the firm is “elephant hunting,” a firm he has used frequently to describe Andreessen Horowitz’s investing style. (Evidently, that explanation is sufficiently convincing to the firm’s investors for now.)

    Around 35:30: Here, I ask a question about whether or not he thinks Andreessen-backed Airbnb could possibly catch up to the valuation of Uber. (Btw, in the course of this answer, he says that Andreessen Horowitz has backed Airbnb “primarily in one round,” so make of that what you will. TC has reported that Airbnb is currently raising another humongous round.) Astute listeners might also note that in a reference to Sequoia Capital’s Alfred Lin, I accidentally refer to him as “Alfred Lee.” I sometimes have verbal dyslexia.

    36:30: Has Andreessen Horowitz sold stakes via the secondary market? (He takes his time here, but the answer is yes. I missed the chance to ask where/when, because of his lengthy reply, though the WSJ has reported that the firm sold some of its shares in the ride-share company Lyft earlier this year. )

    At 40:35: Andreessen talks here about the firm’s philosophy about selling after an IPO. (“Our LPS are very clear with us, which is that they’re paying us to manage private, not public, money.”) His answer is characteristically more nuanced than that, but it sounds like they distribute stock to their investors faster than other VCs might.

    At 42:15: I share an observation that I’ve heard from entrepreneurs, which is that they are sometimes disappointed by how little time they get with the AH partner who leads the investment in their company, and that they are sometimes passed off to non-investing partners quickly (and sometimes, those non-investing partners’ junior staffers). He responds.

    At 45 minutes: The WSJ recently reported that AH’s returns trail those of other firms, but because it’s frankly too soon to know how it will stack up, here I ask Andreessen how he measures the firm’s success in the meantime, and what makes him think his firm’s whole agency-style network set-up is working.

    At 48:30: Here, I ask how AH decides to pull the plug on an investment.

    51:20: This is the last question (I was dinged by an assistant for running over our allotted time): Andreessen, whose son was born last year, answers how fatherhood has surprised him.

    Photo: Dani Padgett 

  • Fallen VC Ifty Ahmed Claims Former Employer, Oak, Owes Him Tens of Millions of Dollars

    screen-shot-2016-09-26-at-8-44-17-amIn May of last year, Ifty Ahmed was accused by federal regulators of conning his former employer — the venture capital firm, Oak Investment Partners — out of $65 million. Now, Ahmed suggests, Oak is doing the conning, and he says the stakes are even higher.

    You might remember Ahmed’s sensational story. According to his former colleagues, Ahmed — who’d joined Oak in 2004 following short stints as a junior investor with both Goldman Sachs and Fidelity Ventures — began bilking the firm almost immediately. They say he doctored deal documents and faked invoices, among other ways he directed the Norwalk, Conn. firm’s monies into his own personal account.

    The alleged fraud was discovered almost by accident. One month earlier, Ahmed, who lived with his wife and children in Greenwich, Conn., was arrested and criminally charged with insider trading. The reason: Federal prosecutors in Boston said Ahmed had conspired with longtime friend Amit Kanodia to profit from the planned acquisition of Cooper Tire & Rubber Co. by India-based Apollo Tyres, making $1 million from the deal before it was publicly announced. (Kanodia’s wife was Apollo’s general counsel at the time.)

    In a civil lawsuit filed against Ahmed at the time (May 2015), the SEC identified at least nine companies in which Ahmed allegedly manipulated Oak investments for his personal gain, the most egregious of which appeared to be a Hong Kong-based online retailer. According to the SEC, in December 2014, Ahmed convinced his partners to write a $20 million check for a stake in the company when, in reality, it was buying a $2 million stake. Ahmed pocketed the rest, says the SEC.

    With his name in the headlines, Ahmed fled to India, where he was quickly arrested by local authorities for entering the country illegally on an expired passport. (He surrendered his U.S. and Indian passports to U.S. authorities when he was charged with insider training.) In the meantime, the SEC froze all his assets, including his brokerage accounts, his investments in Oak’s funds and various properties, such as a home in Greenwich, and two Park Avenue apartments in New York.

    Now Ahmed, who remains in India — he tells us he’s been prevented from returning to the U.S. by Indian authorities who’ve confiscated all of his documents — is trying to wage a battle of his own. To wit, earlier this month, he filed a motion in a U.S. District Court petitioning the SEC to include all of his “untainted assets currently held by Oak” and to direct them into a “joint untainted frozen bank account.”

    According to Ahmed’s legal filing, these assets include four direct forms of investment and investment-related economic interests associated with his employment with Oak, including carried interest in four funds (Oak Investment Partners X, XI, XII and XIII), in which he says he was significantly vested. Specifically, Ahmed says that when he was terminated from Oak on May 18, 2015, he was fully vested in his Fund X; 91 percent vested in Fund XI; 83 percent vested in the carry of Fund XII; and 54 percent vested in Fund XIII’s carry.

    “With very conservative assumptions, the total value of [Ahmed’s] carried interest across these funds is material and significant — easily in the $60 million range even with very conservative assumptions,” states his motion.

    More here.

  • Chris Moore of Redpoint Ventures: The Market Feels “In Flux”

    Screen Shot 2016-09-02 at 12.45.02 PMChris Moore is an increasingly rare breed. At the founding of Redpoint Ventures 17 years ago, Moore joined as an associate and — unlike today’s associates who often are cycled in and out of venture firms — he was made a partner. Since then, Moore has led deals in numerous companies that have gone on to sell for sizable amounts, including Auditude, acquired by Adobe; Right Media, acquired (and later shut down) by Yahoo; Efficient Frontier, acquired by Adobe; and Blue Kai, acquired by Oracle.

    He also led Redpoint into Refresh, acquired earlier this year by LinkedIn for undisclosed terms.

    Earlier today, before leaving Redpoint’s Sand Hill Road office for the long weekend, Moore talked with us about what he’s seeing in the market right now and why it “feels like it’s in flux.” More from that chat, edited for length:

    We’re sort of confused about what’s happening out there these days. 

    I know, it isn’t really clear right now which way the market will go. We had a real run-up last year and the year before, with lots of money coming into the system and momentum investing and all the unicorn hoopla. Then, late last year, it started to feel a little more discriminate, I think in part because the funding ecosystem was just getting exhausted.

    The beginning of the year felt particularly grim, but it appears things are moving full speed ahead again.

    In January and February, we had that public market hiccup, and we all said, “Ooh, this is it. It feels like the start of the correction.” And it didn’t really happen. Interest rates are still low and tech is still the one place where there’s growth in the world and investors are still looking for growth.

    I do think there’s more focus on the fundamentals, and that translates from the later stage growth market all the way down to the Series A market. I think we’re even starting to see it a bit in the seed market.

    It seems like there are still an awful lot of companies getting funded.

    The pace has slowed a bit over last year, but not a lot. Still, I know we’re more focused on the “show me” rather than the “tell me.” We’re looking for market validation and proof points in the form of customer momentum and evidence that the business model can work.

    Are terms changing?

    No, not at the Series A stage. If you start asking for [onerous] terms, it’s hurts the company and it hurts us, because your next set of investors are going to say, “Hey, they got those terms at the Series A; we want them, too.”

    Are Series A valuations down?

    More here.

  • AngelList Deals Will Soon Be Private (and Other Updates You’ll Want to Know)

    Screen Shot 2016-08-25 at 10.08.31 AMEarlier this week, we sat down with Naval Ravikant, cofounder of five-year-old AngelList, a popular platform that matches startups with early-stage investors. Three million people, including 50,000 accredited investors, have created profiles on AngelList since its founding, and AngelList now uses that information to pair startups with capital, pair startup employees with employers and, more newly, pair startups with customers.

    It’s become a big business, as well as a confusing one, Ravikant readily admits. And while we can’t report on one interesting new, performance-related wrinkle that’s coming soon, he walked us through many other stats and initiatives. Our chat has been edited for length and clarity.

    TC: A few years ago, AngelList introduced Syndicates, essentially pop-up funds that allow angel investors to syndicate their investments in exchange for some upside. It was fairly transparent at the outset, but that’s been changing. Why?

    NR: Seventy-five percent of the deals are now private, up from 45 percent a year ago. It’ll be default private soon because a lot of the hot deals tend to be private. Also, that public-private dichotomy is always really hard for entrepreneurs [in fundraising mode] to figure out, so they start associating our brand [with a place to share information publicly to accredited investors], which is a negative, so they don’t want to go on here. We might take a hit on liquidity by making the default private, but at the end of the day, it’s all about getting the high-quality companies.

    TC: An investor, Gil Penchina, has built a big business on the platform. Are more leads starting to see a kind of of network effect?

    NR: Gil is a unique case. He’s the one who’s always breaking the system. We’re more catering to operator-angels, meaning people who have operating jobs, or VPs at big companies or who’ve started their own startups. It’s people who aren’t professional VCs but who do four to six deals a year, investing in alumni and people they know.

    TC: How many of them close a deal each month? And are the investors on the platform mostly based in Silicon Valley?

    NR: We had 55 deals led by 41 leads close in June; we had 44 deals led by 38 leads close in July. The average for most leads on the platform is a couple of deals per year. As for demographics, I’d say over half [the people who lead deals on the platform] are in Silicon Valley.

    TC: You’d said publicly somewhere that you were getting into special purpose vehicles, which come together quickly to invest in a single, later-stage company. Why would someone create an SPV on the platform?

    More here.

  • CRV Comes Out Against Trump in New Statement

    Screen Shot 2016-09-03 at 7.54.21 PMThe U.S. presidential elections are fast approaching, and a growing number of VCs who’ve historically shied from making taking sides publicly, are tweetingtalking with reporters, and blogging about who they are backing and why. The early-stage venture firm CRV, formerly known as Charles River Ventures, is taking things a step further, having just published a tranquil little piece called “F*ck Trump” about the firm’s rejection of Republican candidate Donald Trump’s “anti-immigration statements.”

    We talked with CRV general partner George Zachary earlier this morning about why it bothered.

    Democratic candidate Hillary Clinton has a strong lead over Trump in the polls. Why publish this statement right now?

    It doesn’t make a difference how he’s doing in the polls. We feel strongly about the topic. Several weeks ago, we had an off-site, where we talked about strategy and where we also talked about the election. And each one of us felt offended by what Donald Trump has been saying, including what he has been saying specifically about immigrants. Your grandparents were Greek. My father came from Greece. This country was built by immigrants. It’s time for us to speak up about it.

    His statements have varied over time.

    And they’ll continue to vary, but we have to be authentic here and speak up on behalf of the people who come to this country and build. Half the teams we’ve backed were founded by immigrants. Our nine partners come from seven countries.

    I was in Cleveland not long ago, where I saw much more Trump support than we see in the Bay Area. You run a business. Don’t you risk alienating people?

    More here.

  • VC Charlie O’Donnell on Building Up Community, Cheaply

    Screen Shot 2016-08-29 at 10.05.05 PMBrooklyn Bridge Ventures, a nearly four-year-old, seed-stage venture firm that’s solely run by founder and general partner, Charlie O’Donnell, just closed its second fund with $15 million, up from an $8.3 million debut fund in early 2014.

    Yesterday, we talked  with O’Donnell about what the process was like, whether the New York venture scene will be impacted by the $3 billion sale of e-commerce company Jet.com to Walmart, and how a small operation like Brooklyn Bridge Ventures can make an outsize impact on a shoestring budget.

    TC: We sat down last November and you’d mentioned that you’d circled $13 million or so for this new fund.

    CO: I estimated that I had about $13 million in estimated commitments, and we didn’t go into detail on what that meant. For me, it’s a spreadsheet that has a [potential investor] in the fund, a number, and a percent chance of closing, much like a sales pipeline.

    Comparatively, my first fund took 9 months from announcement to first close, and 15 months from first close to last close. This fund took 6 months from first close to last close, with 70 percent of the capital commitments coming in the first two closes.That all seemed super fast to me.

    TC: We were wondering if you ran into trouble this year with investors; some of the institutions that fund venture firms say they were mobbed earlier this year by firms that raised funds a couple of years ago and that didn’t want to be the last in line for their new fund.

    CO: Most of my [investors] aren’t in any other funds. An endowment that wrote me a $1 million check certainly is. And I think my lead investor is in one or two other funds, along with maybe a handful of individuals [who wrote me checks]. But they’re definitely in the minority. At my size, I’m not talking to many traditional [investors]. I have no idea why they keep writing checks every two years for funds that haven’t proved themselves out yet. I came from the fund side. I thought VCs raised every three to four years.

    TC: You’ve funded a lot of very promising companies. In your past life as a principal with First Round Capital, you also backed a number of companies that have sold. Do you have any “exits” yet at Brooklyn Bridge?

    CO: One exit returned its capital, but given that most of these companies average about two years old or less (it was a three-year investment period fund), it would be pretty early to start seeing exits at this stage. Also, standouts like [the smart home security company]Canary are ramping up revenues and releasing new and improved products and not looking to take an early exit anytime soon.

    TC: People have long said that New York needed a giant exit, especially after certain companies that looked to become big wins saw their fortunes change, including Gilt Groupe and Fab. Was Jet that exit? 

    CO: Jet was certainly a large exit and a testament to the great team the company assembled. Three billion dollars is a lot of money, but given how much they raised right out of the gate, I don’t know what multiples its investors got given what one would assume were the entry prices. So, do the aggregate dollars count or the return multiple? I’m not sure, but I’m also not someone who believes in the “giant exit” theory.

    What’s supposed to happen when we get a giant exit? We get more angels?

    More here.

  • At Rothenberg Ventures, the Rise and Fall of a Virtual Gatsby

    Screen Shot 2016-08-29 at 9.40.19 PMRothenberg Ventures, the four-year-old, San Francisco-based seed-stage venture firm, may be on the brink of implosion, say several sources close to the firm.

    We reported yesterday that several high-level employees had parted ways with Rothenberg, including its director of finance and the head of its SF office, who happen to be father and son (Tom and Tommy Leep). We’ve subsequently learned that firm departures run far more widely. Other top executives who’ve left include the company’s chief revenue officer, who quit yesterday; the company’s chief financial officer, who left in June; general manager James Taylor, who left very recently; and Fran Hauser, a former president of digital at Time Inc. Hauser was brought in with some fanfare as a venture partner in May 2014. Yesterday she updated her LinkedIn profile to reflect that she left Rothenberg in July.

    Messages to Rothenberg have not been returned. According to one source, Rothenberg Ventures founder Mike Rothenberg has told those remaining that “very few people will be left.” In what appears to be a related development, the firm’s site has been down since last night.

    Why the mass exodus? According to one source, Rothenberg Ventures is answering questions from the SEC after a lower-level employee alerted the agency to what this person reported as wire fraud and breach of fiduciary duty. This same source says the employee was subsequently fired and is now suing the firm for retaliation.

    All SEC investigations are conducted privately. An investigation does not mean that the agency will file a case in federal court or bring an administrative action.

    Either way, a much thornier issue for Rothenberg Ventures, say numerous former employees, is founder Rothenberg himself, who has sometimes seemed to live more like a billionaire than the manager of a modest venture fund — spending lavishly to attract moneyed individuals as investors and, over time, growing increasingly focused on becoming as famous as some of them.

    Making a millionaire

    It all began as a minor but inspirational story, proof that the American Dream can still come true.

    Rothenberg, an Austin native who says he comes from humble means — “no one in my family has any money,” he once told us — was smart enough to nab undergraduate and graduate degrees from Stanford, then bootstrap a real estate fund with his brother before moving on to Harvard to secure an MBA.

    Soon afterward, inspired by business leaders he had met while at Stanford, Rothenberg planted himself in San Francisco and got down to the business of trying to shake up the stodgy venture industry. Step one involved raising a $5 million fund from “friends, family, and former roommates,” as reported in a Bloomberg story about Rothenberg last year.

    His timing was ideal as these things go. In 2012, the market was in the middle of a three-year upswing, following the financial crisis of late 2008. Some newer faces were also beginning to gain prominence in the venture industry, along with the trust of so-called limited partners — the individuals and institutions that fund venture firms.

    Rothenberg is also a natural salesperson, and, as such, quickly evolved his pitch for Rothenberg from yet another seed-stage fund to a thought-leading outfit willing to make big bets on virtual reality before most people in Silicon Valley saw it as a major opportunity.

    More here.

  • Several Key Rothenberg Ventures’ Employees Have Left the Firm

    Screen Shot 2016-08-29 at 9.28.08 PMSeveral high-level employees at the early-stage venture firm Rothenberg Ventures have recently left, we’ve learned. Among them is Tommy Leep, a partner and the head of Rothenberg’s San Francisco office, who left last month after spending two-and-a-half years with the firm. (A former product manager at Intuit, Leep spent the previous two years as “chief connector” at the venture firm Floodgate.)

    Other recent departures include Tom Leep, father to Tommy, who’d spent more than three years as Rothenberg’s director of finance before leaving in June; Sophie Liao, who was recently hired with the title of Managing Director, Asia-Pacific Region and appears to have left this month; and Catherine Johnson, a former SVP of HR at BrightSource Energy who joined Rothenberg Ventures this spring, only to leave three months later, in June.

    Neither Liao or Johnson has returned a request for comment. Leep referred all questions about the firm to a company spokesperson. Asked if his father’s departure and his own were connected or unrelated, Leep said he had “no comment at this time.”

    A separate source suggests Leep left of his own accord, while a wide number of other employees were laid off. We don’t know if Michael Dempsey was among them, but the former CB Insights analyst, who joined Rothenberg Ventures in January as an investor, also left last week. Dempsey didn’t respond to a request for more information.

    Rothenberg Ventures was founded just four years ago by Mike Rothenberg, an Austin native who nabbed a master’s in management science and engineering from Stanford before getting his MBA from Harvard.

    Despite its age, the firm has made something of an outsize impact on the local venture industry, including by organizing popular events, such as an annual Founders Field Day at AT&T Park, where the San Francisco Giants play, and by barreling into virtual reality investments before many investors were paying much attention to them.

    Indeed, in late 2014, Rothenberg Ventures announced it would be launching a startup accelerator, River, which planned to provide $100,000 in seed funding to virtual reality companies expressly. Among those early bets was FOVE, which makes an eye-tracking head-mounted display. FOVE passed through Microsoft Ventures Accelerator in London before being selected for River’s inaugural class, but, notably, it went on to raise an $11 million Series A round in March.

    By May of last year, Rothenberg Ventures had also created River Studios, a “creative house for VR production” that, according to the firm’s site, currently “consists of 30 passionate creators, artists and developers, committed to creating inspiring stories, and pushing the boundaries of this awesome medium.”

    More here.

  • Pejman Mar Raises $75 Million for Second Fund, Rebrands as Pear

    2team_pearLikability, intuition, and a strong work ethic is a potent combination in any business, and many in Silicon Valley think seed-stage investors Pejman Nozad and Mar Hershenson have all three in spades. They “complement each other,” says investor Alfred Lin of Sequoia Capital, who invested in the Series A round of DoorDash, the restaurant delivery company, after they seeded it.

    Indeed, the duo has already become somewhat for working closely with nascent teams — many of them in their backyard at Stanford — and vetting them for other VCs, who appear to have an open invitation to their modest offices. (This editor has spied many an investor milling about during different visits, including Bryan Schreier of Sequoia Capital, Mike Abbott of Kleiner Perkins Caufield & Byers, and Brian O’Malley of Accel.)

    Nozad and Hershenson have admirers at much bigger institutions, too. In fact, today — almost exactly three years after the two launched a $50 million seed-stage fund under the eponymous moniker Pejman Mar Ventures —  they’re taking the wraps off a second, $75 million fund. They’re also scrapping their name and rebranding the firm as Pear.

    Among Pear’s investors is New York Life Insurance, True Bridge Capital, and the University of Chicago, which also contributed capital to the firm’s debut fund. The school is back a second time because Hershenson and Nozad have “one of the most partnership-focused mindsets I’ve seen,” says Joanna Rupp, managing director of the University’s $1.1 billion private equity portfolio. “That extends to their limited partners [like us], general partners at other venture firms, and entrepreneurs.”

    Certainly, Pear appears to think differently, which can perhaps be traced to its unusual roots. Nozad famously sold rugs to tech millionaires before becoming a full-time investor; one early bet was on the early smartphone company Danger, which sold to Microsoft in 2008 for $500 million. As it happens, it was through Danger that Nozad met Hershenson, a three-time entrepreneur whose husband cofounded the company.

    Unlike other venture outfits that orchestrate expensive dinners with journalists, Pear organizes events at its offices for cash-strapped founders and students that feature VCs and renowned CEOs as speakers. Past guests include John Doerr of Kleiner Perkins, Yahoo cofounder Jerry Yang, investor Chamath Palihapitiya of Social Capital, and Zynga founder Mark Pincus — though Nozad says a more popular attraction is a life coach who comes regularly to help founders with their personal problems.

    More here.

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