Lifestyles of the Fully-Vested
May 03, 1999
by Mark Bronder
Copyright =C2=A9 1999 UPSIDE Media Inc.
A BMW in Saab Clothing
You may have heard Chip Adams on the radio commercials for Hooked On
Phonics. Chip is CEO of Gateway Learning Corp., the parent company of Hoo=
ked
On Phonics, and a principle at Rosewood Capital in San Francisco. A long
time venture capitalist in Silicon Valley, Chip prided himself on resisti=
ng
one of the clich=C3=A9s of the trade by driving an old Saab instead of a =
shiny
new Mercedes or BMW, standard issue on Sand Hill Road. Chip's stunning wi=
fe
Thayer, on the other hand, had had enough of Chip's tired Swedish wheels =
and
longed to see her husband tooling around in one of Bavaria's finest. Her
solution? As a present, she bought him a new BMW (Thayer is successful in
her own right), but had someone change all of the badges to read Saab
instead of Baverische Motoren Werke. Things worked out fine until Chip sa=
w
someone staring at his parked car in downtown Palo Alto. The stranger loo=
ked
perplexed and said, "Odd, I know this is a BMW, but it says Saab." Chip
insisted it was a Saab, but gave into the stranger's suggestion that they
open the hood for a closer look. Sure enough, Thayer had not gone to the
trouble to cover up the car's true origins under the hood and the jig was
up. Still, by this time Chip was used to the car and decided to keep the
BMW/Saab--and peace in his marriage.
Outspending Bill Gates
Will Larry Ellison of Oracle spend more building his new abode than Bill
Gates spent on his infamous technopalace? Ellison reportedly paid $11
million for 24 acres of raw land in Woodside. The landscaping bill alone =
is
rumored to be $30 million. Apparently, Larry is constructing a much-neede=
d
two acre lake on the property. The city of Woodside is requiring expensiv=
e
engineering so that in the event an earthquake nukes the lake, Larry's
downhill neighbors won't drown. Ellison is notoriously infatuated with al=
l
things Japanese, so Chez Ellison will be comprised of several Japanese st=
yle
houses totaling 20,000 square feet situated around Lago del Larry, includ=
ing
a guest house located on an island in the middle of the lake. Naturally, =
the
compound will be equipped with all the latest technical gizmos designed t=
o
wow guests, including Gates himself. The total bill for the land,
landscaping and structures has got to exceed $50 million. Will Ellison's =
new
abode be the most expensive home in the Bay Area? Probably.
The Don Valentine Special
Even the most successful venture capitalist firms get investors' remorse
sometimes. Such was the case with Sequoia Capital. A few years ago, Sequo=
ia
invested in telecommunications equipment maker StrataCom. Pierre Lamond, =
a
General Partner at Sequoia and a Founder of National Semiconductor, took =
a
seat on StrataCom's board. Soon, Mr. Lamond began to lose confidence in t=
he
company and made noises about wanting to replace StrataCom CEO Dick Moley.
At the company's board meetings, Lamond would say, in effect, that he wis=
hed
he had his money back. One of StataCom's other board members at that tim=
e
was Ken Oshman. Oshman, who founded one of Silicon Valley's earliest succ=
ess
stories, another telecommunications equipment maker called Rolm Corp. (no=
w
part of Siemens of Germany), apparently grew tired of Lamond's
protestations. Moley and many of the other key players at StrataCom were
former Rolm executives, and Oshman is well known for his loyalty. Finally=
,
at one board meeting, Oshman got out his personal checkbook and bought ou=
t
Sequoia's position in StrataCom, reportedly for $3 million. Eventually, o=
f
course, StrataCom was quite successful, it went public and then was acqui=
red
by Cisco Systems. Those Cisco shares that StrataCom shareholders received=
in
exchange for their StrataCom stock have continued to skyrocket--enough so
that Ken Oshman, with the gain from his $3 million buyout of Sequoia's
position, was able to purchase an expensive jet airplane which he nicknam=
ed
the "Don Valentine Special" in honor of the most senior Sequoia partner.
Don't cry for the boys at Sequoia, however. Ironically, they were among t=
he
original backers of Cisco Systems as well as many other successful
companies, so they won't be missing any meals--even if those meals are at=
La
Tour d'Argent in Paris. And what happened to StrataCom CEO Dick Moley? He
continued as the company's helmsman and made several hundred millions of
dollars off of the enterprise.
Tuscany in Woodside
Less than a half a mile south of Ellison's property, you will find a love=
ly
Tuscan style stone mansion set on four acres. People universally salivate
over this extremely tasteful home built just a few years ago by former
Genentech CEO Kirk Raab. I figure construction and land costs totaled aro=
und
$5 million. Divorce forced a sale of the property last year. It reportedl=
y
sold for $17 million--an astounding $3 million over the sky-high asking
price! The proud new owner is German born Sun Microsystems founder Andy
Bechtolsheim, who not only made a fortune from his Sun stock, but has als=
o
done well as an Angel investor, entrepreneur (Granite, now part of Cisco)=
,
public stock investor, and real estate speculator.
A Little Thank-You From Your Partners
Geoff Yang's partners at Institutional Venture Partners recently chipped =
in
to buy (not lease) a new $100,000 Mercedes-Benz CL500 coupe for Yang as a
thank you for his work on search engine company Excite. It seems this is
becoming more and more common on Sand Hill Road. John Jarve's partners at
Menlo Ventures presented him with a new Porsche last year as a way of
thanking him for UUnet. It all started in 1986, however, when Dave Marqua=
rdt
received a Ferrari Testa Rossa, complete with red ribbon, as a Christmas
gift from his partners at Technology Venture Investors. Dave had some dec=
ent
IPOs for TVI in March, 1986: Sun and a little start-up called Microsoft. =
By
the way, if TVI had held on to those Microsoft shares, each single dollar
they invested back in 1981 when Bill Gates little enterprise was still
private would be worth $20,000 today, or more than $20 billion total. In
fact it's public knowledge that Marquardt, still on Microsoft's board, ha=
s
managed to accumulate about 2 million shares of MSFT personally, worth ab=
out
$165 million as I write this.
The author, Mark Bronder, is a veteran executive of two successful Silico=
n
Valley high-tech companies and a venture capital firm, but is best known =
as
the co-founder of Pete's Brewing Company, brewer of Pete's Wicked Ale.
Tushar J. Mehta
email: [email protected]