The Secrets of the Venture Capitalist Who’s Seen It All: Term Sheet
THE VC WHO'S SEEN IT ALL BEFORE
Jeff Jordan has stayed largely behind the scenes even though he invested early in what are now some of the hottest companies in tech.
On behalf of Andreessen Horowitz, Jordan backed home-sharing giant Airbnb, grocery delivery company Instacart, and the hobbyist site Pinterest. The firm’s bet on Pinterest alone, one of Jordan’s first after joining the firm in 2011, is worth $1 billion.
He was also recently promoted to managing partner at the firm, meaning he’s now responsible for personnel, budgeting, day-to-day operations, and the like, all while continuing to invest and sit on boards. (He’s currently on nine, including still-private Airbnb and Instacart, newly public Pinterest, and high-stakes e-scooter startup Lime.)
Jordan is a bit of an outlier at the epicenter of the global technology industry, a place of titanic egos and triumphs borne of brilliant ideas. He didn’t become a VC, widely acknowledged to be a young person’s game, until he was in his fifties. He’s not a technologist but rather a general-management type, typically second-class citizens in the Valley. And he at least professes to hate being in the spotlight. What he has, in spades, is something that is gaining currency amid the scandals and missteps of the Valley’s behemoths: experience. (Shocker!)
In a feature for the July issue of Fortune, I profiled Jordan and tried to figure out what’s behind his success as a venture capitalist.
Below is an excerpt from my story:
Jordan’s first reaction to Airbnb was that it was “the stupidest idea I had ever heard.” It was 2011, and he was at an Allen & Co. tech-investing meeting in Arizona. Brian Chesky, then a relatively unknown entrepreneur, was explaining his business, and Jordan couldn’t help mentally listing the number of risks associated with opening up one’s home to strangers. Then it hit him. Airbnb’s fast growth and online marketplace that matched homeowners with renters reminded him of eBay. It was, he says, “a déjà vu experience.” Having worked in top positions at eBay for seven years, he literally had seen this picture before.
Jordan and Chesky met after the entrepreneur’s talk, and the two discussed network effects, the notion that a product or service becomes increasingly valuable the more people who use it. Chesky was looking for investors, and Jordan was interested in becoming one. He’d grown bored running OpenTable, a restaurant reservation site, when Marc Andreessen and Ben Horowitz asked if he’d be interested in joining their young firm. The duo asked Jordan to name a hot company in the consumer sector. The first to come to mind was Airbnb. He got the job and the deal. Jordan guided the firm’s $60 million investment in Airbnb, a stake that has grown 30-fold at the private company’s last valuation. Chesky chose Jordan over Andreessen to be an Airbnb board member. “From the first time we met, Jeff struck me as somebody I should learn from,” he says.
Days after becoming an Airbnb director, Jordan proved his mettle. An Airbnb renter vandalized a home, jeopardizing the trust critical for a marketplace among strangers. Airbnb needed a system to make homeowners comfortable. Jordan had introduced a program at eBay called Buyer Protection, which helped resolve issues between buyers and sellers. He advised Chesky to create a property damage protection policy called Host Guarantee that would cover loss or damage by renters up to $50,000, a figure that has since grown to $1 million. Since then Jordan has applied his eBay lessons in advising Airbnb in other ways, including international expansion, adding site functionality, and designing new products, a process Jordan calls “adding layers to the cake” and all steps eBay took.
FINTECH $$$: My colleague Robert Hackett has the exclusive on a new fintech mega-funding round. Blend, a San Francisco-based fintech startup, raised $130 million in funding. General Atlantic and Temasek co-led the round, and were joined by investors including Lightspeed Venture Partners, Greylock Partners, 8VC, and Founders Fund. The cash injection likely puts the startup within striking distance of “unicorn” status, meaning a private valuation of $1 billion or more. Hackett reports:
The terms of the deal, including the latest valuation, were not disclosed. A source close to the deal told Fortune, however, that the latest round was “about doubling the series D valuation,” referring to a prior round of fundraising in which investors privately appraised Blend at $500 million, including the $100 million raised, in August 2017, per data provided by Pitchbook, an industry tracker.
• CoHive, an Indonesia-based co-working space company, raised $13.5 million in funding. Stonebridge Ventures led the round.
• MakerSights, a San Francisco and London-based product decision engine for retail, raised $8.5 million in Series A funding. Investors include Forerunner Ventures.
• Alma, a New York-based co-practicing community of therapists, coaches, and wellness professionals, raised $8 million in Series A funding. Tusk Venture Partners led the round, and was joined by investors including Sound Ventures, First Round Capital, Primary Ventures, Box Group, and able Partners.
• Nowports, a Mexico-based automated digital freight forwarder platform, raised $5.3 million in seed funding. Base10 and Monashees co-led the round, and were joined by investors including Y Combinator, Broadhaven, Soma Capital, Partech, Tekton, and Paul Buchheit.
HEALTH AND LIFE SCIENCES DEALS
• Xealth, a Seattle-based platform for connecting digital health, raised $3 million in funding. Investors include Atrium Health, Cleveland Clinic, MemorialCare Innovation Fund, McKesson Ventures, Novartis, Philips, ResMed, Threshold Ventures, Providence Ventures, UPMC, Froedtert and the Medical College of Wisconsin health network.
PRIVATE EQUITY DEALS
• L Catterton agreed to acquire Del Frisco’s Restaurant Group, Inc. (NASDAQ: DFRG) in an all cash transaction valued at approximately $650 million.
• Radiant Life Care, which is backed by KKR, acquired a 49.7% stake in Max Healthcare, an India-based provider of healthcare services. Financial terms weren't disclosed.
• Align Capital Partners acquired E Source, a Boulder, Colo.-based provider of customer-focused research, data, and consulting for utilities and their partners. Financial terms weren't disclosed.
• GI Partners agreed to recapitalize Insurity, a Hartford, Conn.-based software platform for the property and casualty insurance industry. Financial terms weren't disclosed. Insurity is backed by TA Associates, General Atlantic and Genstar Capital.
FIRMS + FUNDS
• Bedrock, a New York-based venture capital firm, raised $350 million for its second fund, Bedrock II.