Newspaper article International Herald Tribune

Angel-Investor Wealth from Facebook I.P.O. May Give Wing to Start- Ups

Newspaper article International Herald Tribune

Angel-Investor Wealth from Facebook I.P.O. May Give Wing to Start- Ups

Article excerpt

The social media giant has been an incubator of talent, people who have gone on to start new technology companies, and as Facebook employees grow instantly richer with its I.P.O., that incubator may expand.

Matt Cohler was one of the earliest hires at Facebook. Adam D'Angelo joined the quirky little start-up run by his high school friend Mark Zuckerberg in 2004, and became its chief technology officer. Ruchi Sanghvi was the first woman on its engineering team.

All have left Facebook. None is retiring. With lucrative shares and a web of valuable industry contacts, they have left either to create their own companies or to bankroll their friends.

With Facebook's initial public offering, expected May 18, more will probably join their ranks in what could be one of Facebook's lasting legacies: a new generation of technology tycoons looking to create or invest in the next Facebook.

"The history of Silicon Valley has always been one generation of companies gives birth to great companies that follow," said Mr. Cohler, who, at 35, is now a partner at Benchmark Capital, and an investor in several start-ups created by his old friends from Facebook. "People who learned at one set of companies often go on to start new companies on their own."

"The very best companies, like Facebook," he continued, "end up being places where people who come there really learn to build things."

This is the story line of Silicon Valley, from Apple to Netscape to PayPal and now, to Facebook. Every public offering creates a new circle of technology magnates with money to invest. The Facebook one, with a jaw-dropping $100 billion valuation, will create a far richer fraternity.

Its members will be, by and large, young men, mostly white and Asian who, if nothing else, understand the value of social networks. And they have money. Some early executives at Facebook have already sold their shares on the private market and have millions of dollars at their disposal.

Mr. Cohler, for example, is at the center of a complex web of business and social connections stemming from Facebook.

In 2002, barely two years out of Yale, he was at a party where he met Reid Hoffman, a former PayPal executive who was part of a slightly older social circle. The two men "hit it off," as Mr. Cohler recalled on the online question-and-answer platform, Quora. He became Mr. Hoffman's protege, assisting him with his entrepreneurial investments, and followed him to his new start-up, LinkedIn.

Then, Mr. Cohler joined a company that Mr. Hoffman and several other ex-PayPal executives were backing: Facebook.

Mr. Cohler stayed at Facebook from 2005 to 2008, as it went from being a college site to a mainstream social network. One of his responsibilities was to recruit the best talent he could find, including some from other companies.

Mr. Cohler left the company to retool himself into a venture capitalist. He has since been valuable to his old friends from Facebook.

Through his venture firm, Mr. Cohler has raised money for several companies founded by Facebook alumni, including Quora, created in 2010 by Mr. D'Angelo and another early Facebook engineer, Charlie Cheever.

Other companies include Asana, which provides software for work management and was created in 2009 by Dustin Moskovitz, a Facebook co-founder; and Peixe Urbano, a Brazilian commerce Web site conceived by Julio Vasconcellos, who managed Facebook's Brazil office in Sao Paulo.

Mr. Cohler has put his own money into Path, a photo-sharing application formed in 2010 by yet another former Facebook colleague, Dave Morin. Path is also bankrolled by one of Facebook's venture backers: Greylock Partners, where Mr. Hoffman is a partner.

And he has invested in Instagram, which was scooped up by Facebook itself for a spectacular $1 billion. "Thrilled to see two companies near and dear to my heart joining forces!" Mr. Cohler posted on Twitter after the acquisition. …

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