I started in venture capital in 1994, when I co-founded RRE. We began our investing lives by making frequent trips out to Silicon Valley to do deals. Why? How did Willie Sutton answer when asked why he robbed banks? Because that is where the money was. We came out to the valley because that’s where the deals were. In those early years I spent two weeks each month in the valley and made investments in a bunch of great companies. Eventually, RRE rented a modest apartment because it was cheaper than all the hotel rooms for all the partners and I had an extra set of everything out there.
I had a whole Silicon Valley life in those days – lots of great friends, favorite restaurants, movie theaters, and places to run. This lasted until the late 1990’s for me, and although many of my partners continued to do deals and spend significant time in the valley (and continue to today), I started to spend less and less time out here. Over time, I focused more on New York City. Two weeks per month slowly became one week, then once per quarter. About two years ago, I stepped off the board of my last valley company, Proofpoint, because it was performing very well and, as a growth-stage company with a great board, it didn’t need me to fly three thousand miles to see it.
More importantly, over the last ten years New York has really come into its own as a place where great companies are being formed and where I felt I could add a lot of value as an early-stage investor. One thing I’ve learned about myself over these last fifteen years is that I’m a guy who invests in people and that I can be the most helpful to my companies if I spend quality time with them. Unless I wanted to go back to two weeks a month on an airplane, I could accomplish that best by investing largely in companies that are here. In a way, this is a throwback to the way Silicon Valley investors thought about companies back in the 1990s – most of them were (and some still are) really focused on their local geography. If you were an interesting company in Chicago, Florida or yes, even New York, many of my Sand Hill Road peers would tell you that they were interested, but only if you moved to Palo Alto. I generally don’t tell companies they have to move to New York, but much of the same logic applies here. Today, in 2010, many investors are starting to see NYC as the new great place for entrepreneurship and where many of the new generation of great companies are being built. I couldn’t agree more. RRE has done fifteen deals here over the past three years, so this current recognition wasn’t really the final bell of recognition for me.
And yet here I am, here in the Valley again for the first time in quite a while. A few months ago I was contacted by thefunded.com that I ranked highly in their list of venture capitalists. Would I come out to the conference they were having in February and maybe accept some kind of acknowledgment. I realized that I had not been out to the valley in well over a year. It was a shock to me that it had been so long, so I accepted. Also, I had not gotten a trophy since little league and thought maybe this was my big chance. So even though a snow storm in NYC could have given me a reason to cancel the trip, my flight made it out on time. I landed in SF.
Over the couple of days I’ve been here, I’ve realized just how much this place has changed since i used to live here half-time and I’ve realized just what a New York VC I’ve become. Whether it’s the different restaurants and shops in the airport, the new Octavia Freeway that wasn’t here back when I knew my way around this city well enough to instruct SF’s generally inadequate taxi drivers how to best get around, to the diet cokes in our apartment fridge that expired in 2007 (hey, I said it was modest!), I realized that originally in my venture career I “went native” here, mostly because to be a good VC in the 1990s you simply had to. But now I’m not – I’m a visitor here, and as I thought about this while trying to sync our old Gateway PC with Exchange to get my email (it didn’t work, of course), I realize that given where things are for New York and for me, I’m ok with this. I have six investments in our current fund and four of them are in New York (RecycleBank, drop.io, Payfone and Betaworks).
Don’t get me wrong. The valley is still a great place. It is the epicenter of venture capital and technology and much money will be made here going forward. But as for me? I will wear my Rangers hat with pride and be a New York guy. It is nice to see that the world is noticing how great our city has become.