The Story Behind My First Investment, Hired.com
Over the next few days, I’m going to share some brief stories about how I came to invest in the startups I’ve invested in. Most times when investors do this, they share a thesis of how they think the world or a particular industry is moving, and then how their specific investment fits into that narrative. While those are interesting angles, I won’t do that here. Instead, I’ll just briefly share how I came to learn of the team, how I met them, how I decided to make a move, and how the deal went down. I hope you find it entertaining, at the very least.
Last December, in 2012, I was wrapping up my time at Javelin. I wasn’t in a good place. I had almost joined a firm full-time but the opportunity fell through and I wasn’t sure what to do. On a random Friday evening, I was on Sand Hill and a long-time friend of mine asked if I could meet his advisor who had started a new company, DeveloperAuction (now Hired). He was from Florida. “Sure,” I replied. I met Doug and parts of his team. We had a drink. I needed a drink. Doug was a repeat entrepreneur, but he mentioned something over drinks that piqued my interest: He and his cofounders had among them over two decades worth of experience in online marketplaces. My ears perked up.
Their marketplace connected technical talent with potential employers. In less than a year, the company has grown the number of auction events, the number of candidates in the pipeline, the number placed, the size of their team (many of whom are in San Francisco, while some are distributed), and their revenues. I didn’t know this would happen, but I’m not surprised, either. In fact, the company is doubling revenue on a quarterly basis, has 2,500+ developers applying each month alongside over 600 employers who apply to be part of the auctions, and is already profitable on a multi-million dollar net run rate.
I offered him a survey of whom I thought were the best thinkers around marketplace businesses. Doug was interested in some of those introductions, so I went home and started emailing around for him. The next morning, I had breakfast with my friend Gautam, and we covered a range of topics, including my opportunity that fell through the cracks. Then, I told him about Doug and his team and how I enjoy finding such gems. Gautam said: “You should just start your own fund.”
So, I did.
As I was helping Doug, I told him about all of this, why I was starting a fund, and how I’d like to work with him and invest a little bit of money. I asked if I could invest in the round. He said he’d think about it. Over the next few weeks, I made some intros for Doug and the team, brokered some customer intros for their product, and made sure to show value. I haven’t talked to Doug about it, but I think he appreciated it. And, eventually, a few weeks later, he emailed me to tell me that he’d kept a little amount open for me. Doug and his team are experienced. They didn’t need to raise money. And, it wasn’t that they pitched me — I pitched them, and they allowed me to go along for the ride. It was their decision, and I’m glad they gave me the chance.
Looking back now, almost a year later, this reminds me of a memorable quote from my discussion with Mike Maples, where he counterintuitively asserted it was through the generosity of entrepreneurs that investors like him were able to get their start, remarking:
Yeah, it’s funny, there’s a lot of talk about how, “Well, the entrepreneur succeeded because their own gumption,” but also those early venture guys that believed in them and backed them. We were almost started in the reverse way. The entrepreneurs, and their generosity, and their belief that we [Maples] could make a difference and a contribution — gave us the chance to get some runway and a running start. We’ve never forgotten that. Ann and I, when we think about how we practice the business, we’re always like, “We have to remember, that the entrepreneurs had our back when the chips were down.”