AS WALL Street eagerly awaits signs that internet sensation Facebook will offer shares to the public, the venture capitalists that prowl California’s Silicon Valley are keeping close tabs on another hot commodity: the employees leaving Facebook.
A handful of start-up companies founded by Facebook alumni are attracting attention and generating a good amount of buzz within venture circles, where competition is fierce to get a stake in the web’s next hit product.
On Monday, Quora, a start-up founded by four ex-Facebook employees, including former chief technology officer Adam D’Angelo, raised funding from Benchmark Capital that valued the company at $86 million. Quora, which operates out of a small office in Palo Alto, California, had not planned to raise money so early, said Mr D’Angelo, who is the chief executive.
“We weren’t really shopping it around, but there was a lot of interest” from venture capitalists.”
The company was started in April 2009 and the product, launched in January 2010, can currently be used only by people who have received a special invitation.
Mr D’Angelo declined to comment on the financial terms of the deal, but said the funding would help Quora to hire more staff and focus on a wider set of technical challenges underlying the product – an online question-and-answer service based on people’s social connections.
The proliferation of start-ups with Facebook veterans, and the investor interest in them, follows a time-tested Silicon Valley pattern in which tech superstars from Google to Fairchild Semiconductor have spawned innovative start-up companies, said Nick Sturiale, a general partner at JAFCO Ventures. “Any entrepreneur spinning out of Facebook is going to get attention,” said Mr Sturiale. “They’re at the vanguard of how the web is emerging.”
A number of Facebook-related start-ups have already passed muster. Asana, whose founders include Facebook co-founder Dustin Moskovitz, raised $9 million in December from Benchmark Capital and Andreessen-Horowitz.
Cloudera, which features former Facebook, Google, Yahoo and Oracle veterans on its management team, raised $11 million from Greylock Partners and Accel Partners last year.
Meanwhile, Path, a secretive project led by former Facebook employees Dave Morin and Shawn Fanning, the creator of music-sharing service Napster, has peaked a lot of interest in tech circles, al though it is unclear if the company is looking to raise money.
Some entrepreneurs, like former Facebook director of international business development Net Jacobsson, say there is no overwhelming pressure to raise capital right away, thanks to the low cost with which web start-ups can be created these days. – (Reuters)
