Spark Capital

From Wikipedia, the free encyclopedia
Jump to: navigation, search

Spark Capital is a venture capital firm in the United States, with branches in Boston, New York, and San Francisco.[1] Its portfolio includes Twitter (the microblogging service that had an IPO in 2013), Tumblr (that was sold to Yahoo! for $1.1 billion USD in 2013), Foursquare, Warby Parker, Stack Exchange, Upworthy, Academia.edu, and many other companies.[2][3][4]

History[edit]

Spark Capital was launched in 2005 by Alex Finkelstein, Bijan Sabet, Paul Conway, Santo Politi, and Todd Dagres.[3][4][5] They have had five fundraising rounds.

  • The first fund, for $265 million, was raised in 2005.[3][4]
  • The second fund, for $360 million, was raised in 2008.[3][4]
  • The third fund, for $360 million, was raised in 2010.[3][4]
  • The fourth round, for $450 million, was raised in 2013 and its closure was announced in late February.[4] Partner Bijan Sabet told TechCrunch that this brought Spark Capital's money under management to $1.4 billion.[4]
  • The fifth round, for $375 million, was raised in 2014.[6]

Team[edit]

Spark Capital was founded in 2005 by Alex Finkelstein, Bijan Sabet, Paul Conway, Santo Politi, and Todd Dagres. Other people who have joined the company since its inception include Andrew Parker, Danya Cheskis-Gold, Mo Koyfman, and Nabeel Hyatt.[5]

Investment approach[edit]

According to a Forbes article, Spark Capital's success can be attributed to maintaining focus specifically on technology startups in the media, entertainment, and mobile sectors. Further, information-sharing within the company was organized so that all partners can work with a portfolio company, not just the partner assigned to that company.[3]

Spark Capital has been known for co-investing with Union Square Ventures. In fact, many of Spark Capital's top picks, including Twitter, Tumblr, and Foursquare, were made via partner Bijan Sabet and were joint investments with Union Square Ventures, made by partner Fred Wilson.[7][8][9][10] Other firms with which Spark frequently co-invests include SV Angel, Lerer Ventures, and First Round Capital.[7]

Sabet says that Spark Capital's portfolio companies do not use non-compete agreements, which he says have been a key factor in limiting startup growth in New York and Boston.[11]

Companies[edit]

Twitter[edit]

Bijan Sabet, Founding Partner at Spark Capital, invested in Twitter's second (Series B) round in June 2008, along with Jeff Bezos and additional investments from past investors such as Fred Wilson of Union Square Ventures, and Sabet also accepted a board seat at Twitter.[12] According to Hatching Twitter, Sabet and Fred Wilson played a crucial role in facilitating smooth leadership changes at Twitter in October 2008 and later October 2010—ousting Jack Dorsey to install Evan Williams in 2008, and ousting Williams to install Dick Costolo in 2010.[13]

In November 2013, shortly after Twitter's IPO, Sabet wrote a blog post expressing his gratitude to Twitter, both as an investor and as a user of the service.[14] A Forbes article about Spark Capital quoted Sabet as attributing Spark Capital's success to the fact that the partners themselves used the products of the companies they invested in (such as Twitter) enabling them to better understand the companies from the perspective of consumers.[3]

Tumblr[edit]

Spark Capital was one of the early investors in Tumblr, where they co-invested with Union Square Ventures, paying the same amount for the same share, with Bijan Sabet as the assigned partner from Spark Capital.[15][16] Following the sale of Tumblr to Yahoo! for $1.1 billion USD, Spark Capital and Union Square Ventures each took home $192 million from the deal.[15][17][18]

Foursquare[edit]

Spark Capital has invested in multiple rounds of location-based social networking company Foursquare, starting in June 2011.[19][20]

References[edit]

  1. ^ "About: Who We Are". Spark Capital. Retrieved January 24, 2014. 
  2. ^ "Portfolio". Spark Capital. Retrieved January 24, 2014. 
  3. ^ a b c d e f g Geron, Tomio (September 10, 2012). "How Spark Capital Invested In Hot Startups Like Twitter, Tumblr, Foursquare". Forbes. Retrieved January 23, 2014. 
  4. ^ a b c d e f g Rao, Leena (February 25, 2013). "Boston-Based VC Firm And Early Twitter Investor Spark Capital Raises $450M For Fourth Fund". Retrieved January 24, 2014. 
  5. ^ a b "Team". Spark Capital. Retrieved January 24, 2014. 
  6. ^ Alspach, Kyle (May 28, 2014). "Spark Capital aims to raise growth fund of $375 million". BetaBoston. 
  7. ^ a b "Spark Capital and Union Square Ventures – So Happy Together: While USV and Spark are obviously BFFs, who else most frequently co-invests alongside these firms?". CB Insights. May 23, 2013. Retrieved January 24, 2014. 
  8. ^ Rao, Leena (September 13, 2013). "Ask A VC: Early Twitter Investor And Spark Capital Partner Bijan Sabet On Founder Personality, Investment Syndicates And More". TechCrunch. Retrieved January 24, 2014. 
  9. ^ Glasner, Joanna (May 22, 2013). "Union Square & Spark Capital: Venture’s New Power Couple?". peHUB. Retrieved January 24, 2014. 
  10. ^ Wilson, Fred (March 31, 2009). "Co-investors". A VC. Retrieved January 24, 2014. 
  11. ^ Keohane, Dennis (July 11, 2014). "Bijan Sabet on Spark Capital’s noncompetes approach: Our companies don’t have them". BetaBoston. Retrieved July 11, 2014. 
  12. ^ Stone, Biz (June 24, 2008). "Welcoming Bijan and Jeff". Twitter blog. Retrieved January 24, 2014. 
  13. ^ Bilton, Nick. Hatching Twitter. 
  14. ^ Sabet, Bijan (November 7, 2013). "Thank You, Twitter.". Retrieved January 24, 2014. 
  15. ^ a b Shontell, Alyson (May 22, 2013). "Early Tumblr Investors USV And Spark Capital Got ~ $192 Million Each From Yahoo Sale". Business Insider. Retrieved January 24, 2014. 
  16. ^ Wauters, Robin (April 20, 2010). "Union Square, Spark Capital Double Tumblr's Funding To $10 Million". TechCrunch. Retrieved January 24, 2014. 
  17. ^ Cohan, Peter (May 20, 2013). "Interview With Tumblr Investor, Spark Capital". Forbes. Retrieved January 24, 2014. 
  18. ^ Farrell, Michael (May 21, 2013). "Sale of Tumblr set to deliver big payday for Spark". Retrieved January 24, 2014. 
  19. ^ Ante, Spencer (June 25, 2011). "Foursquare Raises Venture Capital". Wall Street Journal. Retrieved January 24, 2014. 
  20. ^ Eldon, Eric (February 29, 2012). "Foursquare Is Doing Big Things, So Existing Investor Spark Capital Buys $50M Of Employee Stock". TechCrunch. Retrieved January 24, 2014.