Joining SoftBank Capital to focus on New York investments
Over the past six years, I've been fortunate to have had the opportunity to help shape the success of a few early-stage businesses. That journey began at Sphere, where I joined Tony Conrad, Martin Remy and Steve Nieker as employee #7 in 2007 as a business development professional who came to eventually wear multiple hats. After Sphere was acquired by Aol in 2008, I stepped up to take the reigns from Tony, leading the team as CEO, and eventually rebranding the business as Surphace. As the business continued to grow and Aol shifted its strategy, we saw an opportunity to break away from the mothership and, in 2011, divested the business and merged with Outbrain, our closest competitor at the time. The next 30 months were some of the most exhilarating and fun of my career, as the combination created a clear winner in the space and sent us off to the races. Having a front row seat to watch a business grow from 50 to 250 employees while taking a commanding lead in a market is an awesome experience and something every startup junkie should experience at least once in their lives. Outbrain, for me, was a lesson in execution, and working with Yaron, Ori, David and the rest of the team was a true privilege. While not the most well known or hyped (intentionally so), I'm convinced there's not a more talented team assembled in the country. Though through it all, my heart always felt most at home in the early days - when the team fits around a conference room table and every decision seems as if the world depends on it.
Since the earliest days of my career, when I pitched startup businesses to investors as a young investment banker in San Francisco (in the pre AngelList era), the world of venture capital always fascinated me. 'What type of business models make for the best investments?' 'What qualities should a founder exhibit?' These are the types of questions I found myself considering. It's true, the catered lunches and board room tables constructed out of a single Redwood that I saw as a 24-year old going door-to-door on Sand Hill Road may have wooed me, but it's the excitement of helping to shape a business at its earliest stages that really gets my juices flowing. This is where I discovered my greatest passion for business resides.
Dave Hornik wrote about the role of passion in venture capital and startups in his great post Investing is About Passion:
Anything shy of passion will fade away, leaving the [team] vulnerable to fatigue. Passion, however, will transcend the challenges.
He goes on to talk about rolling around in bed the night after a good meeting thinking about the challenges facing a given business. This was the part of the post that most resonated with me. I love that feeling. And after a sleepless night like the one described, I often feel my most aware. It's one of the big reasons I'm excited to try my hand at venture capital in lieu of continuing in an operating role. I think the type of passion Dave describes can be most effective when used in an advocacy role. Not to mention, guys like me - notoriously ADHD - are happier and more productive when working on 15 different projects at once.
Joining SoftBank Capital as a Partner on the latest fund is an opportunity to take a step closer to that passion, working with entrepreneurs at the earliest stages, where decisions keep us up at night and the intensity remains constant. With this latest fund, we've chosen to focus on investments in New York State, which we believe will represent some of the most compelling opportunities over the next fund cycle. I moved to New York City from San Francisco in 2002 and haven't looked back. I've watched the community grow from the days where the NY Tech Meetup met in a small classroom at NYU and share a great sense of pride in what we've all helped build here. At SoftBank, we remain incredibly bullish on the city - along with surrounding suburbs - and chose to double down on the previous fund in this series that included investments in Huffington Post, Buddy Media, OMGPOP and BuzzFeed.
The super talented team at SoftBank Capital complements a marquee brand with a storied history. Starting in 1995, the firm has partnered with some of the earliest pioneers of the Internet - Yahoo!, e*Trade, Geocities - and more recently Gilt Groupe, Criteo, BuzzFeed and betaworks. Even more important to me, my new partners Jordy, Ron S, Joe, Steve, Ron F, Kabir, Nikhil, Scarlett and Matt bring a wealth of both startup and executive management experience while maintaining a no-bullshit, founder-first investing philosophy that I believe is critical for success in this business today. Everyone on the team truly loves building businesses and wants to make a difference in the companies we fund. There's no better title than Founder and everyone on the team is committed to partnering with the best founders to make their dreams a reality.
I have a lot to learn, to be sure. Fortunately, over the past decade, I've been able to surround myself with some of the smartest and most capable entrepreneurs and investors, all of whom I plan to call on for advice as I learn to navigate this business. If you're one of those people, you can expect a call or email in the coming weeks. And if you're a founder wanting to discuss a business idea that's keeping you up at night, don't hesitate to reach out: josh_guttman [at] softbank [dot] com.