Rich and (spread) thin
By Lawrence Aragon [email protected]
Copyright © Red Herring Communications Inc.
October 13, 1999
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It's been said so many times, we're starting to accept it as fact:
entrepreneurs who strike it rich at dot-com companies take the money and
run. But there's one teensy problem with that assertion -- no proof.
In fact, I keep running into people who are filthy rich but still work
15-hour days -- like Philip Rosedale, the newest entrepreneur-in-residence
(EIR) at Accel Partners. The one big difference is that they're working for
themselves. They have the desire, and the means, to make their
entrepreneurial dreams reality. VCs say they're seeing a lot more
entrepreneurs like Mr. Rosedale, running counter to the belief that startup
starters are cashing out. "We've seen a ton of second-generation Internet
entrepreneurs," says Andy Rachleff, a partner at Benchmark Capital. The
story's the same at Crosspoint Venture Partners -- it has an EIR who's
reportedly worth hundreds of millions of dollars, yet is pursuing a startup
with two other beneficiaries of dot-com wealth. "At the end of the day, none
of these guys has to work, but they've got it in their blood," says Rich
Shapero, a general partner at Crosspoint.
STARTUP ARTIST
New wealth changed Mr. Rosedale, but not in the way you might think. He
stepped down in July as chief technology officer of Realnetworks (Nasdaq:
RNWK) -- where he became a decamillionaire -- so he could return to his
first love: starting companies. He knew Accel's Jim Breyer from the board of
Realnetworks. Mr. Breyer convinced him to be an EIR at Accel while he
pursued his latest Web effort. (Don't ask; it's top secret.) "I could go off
and sit on a beach," says Mr. Rosedale, who is all of 31. "But I can't
imagine why anybody who has done well in a company, and is interested in
ideas or likes to build things, wouldn't be sucked back into the Internet
economy of new ideas."
Getting rich allowed Mr. Rosedale to get in touch with the passion of youth.
When he was a kid, he dreamt of building spaceships. (He was your typical
nerd: he programmed his first PC -- a Timex Sinclair -- in sixth grade and
started a business in high school writing database apps for car dealers.)
But as he grew older, he had to be "pragmatic," as he says, and the
spaceships faded into the background. "Having money and time, I feel like I
must try to get back and say I will build spaceships. There's something out
there that's that big," he says. The rocket he's riding now is the Internet,
which he believes will cause "very profound changes in the way we live."
Having money also means Mr. Rosedale is captain of his ship. He doesn't have
to compromise in any way to get the cash to create his company. And he can
take as much or as little risk as he likes. "I definitely have enough money
to go through the early stages of financing without VC," he says.
MONEY CHANGES (ALMOST) EVERYTHING
Not that Mr. Rosedale dislikes VCs. After all, he's working with Accel. It's
just that his wealth has given him a certain amount of independence and
freedom, so that he doesn't have to bring in VCs until he feels the time is
just right. Mr. Shapero agrees that "money is a liberating influence. It
tends to get people defocused on money as a value system rather than more
focused on it." In other words, money doesn't ruin true entrepreneurs.
P.S. Drop me a line if you know anyone who has made a mint at a Net company
and is now devoting all of his or her time to the recreational sciences