Facebook veterans attract VC funding
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Facebook veterans attract VC funding

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Facebook veterans attract VC funding
San Francisco: Start-up companies founded by Facebook alumni are attracting attention a good amount of buzz within venture capitalists. Quora, a start-up founded by four ex-Facebook employees, including former Chief Technology Officer Adam D'Angelo, raised a Series A round of funding from Benchmark Capital that the technology blog TechCrunch said valued the company at $86 million, citing an unnamed source, reports Alexei Oreskovic from the Reuters.

Benchmark partner and former Facebook product management Vice President Matt Cohler will sit on Quora's board. "We weren't really shopping it around, but there was a lot of interest" from VCs, D'Angelo, who is the CEO of Quora told to Reuters. The company was started in April 2009, and the product which was launched in January 2010, can currently be used only by people who have received a special invitation. D'Angelo declined to comment on the financial terms of the deal, but said the funding will help Quora 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 Inc to Fairchild Semiconductor have spawned innovative start-up companies, said Nick Sturiale, a general partner at JAFCO Ventures. "Any enterpreneur spinning out of Facebook is going to get attention," said Sturiale. "They're at the vanguard of how the Web is emerging."

But the active secondary market for Facebook shares - including more than $100 million in officially-sanctioned stock purchases of employee shares by Facebook investor Digital Sky Technologies last year -- has allowed Facebook employees to decamp at an earlier stage, say some VCs. "We've seen loads of people leave Google and now we're seeing loads of people leave Facebook.

Either because they're vested, or because they think the company's gotten too big," said Spark Capital's Todd Dagres. Dagres said he's looking at several startups founded by ex-Facebook employees, but he notes that a Facebook connection is not enough. "You definitely pay attention if somebody is leaving Google or Facebook. But then you've got to make sure that they really have built a track record, that they didn't just work there," said Dagres. 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 Inc and Oracle Corp veterans on its management team, raised $11 million from Greylock Partners and Accel Partners in two separate rounds of funding last year. Meanwhile, Path, a secretive project led by former Facebook employee Dave Morin and Shawn Fanning, the creator of music sharing service Napster, has piqued a lot of interest in tech circles though it's unclear if the company is looking to raise money.

Some entrepreneurs, like former Facebook director of international business development Net Jacobsson, say there's no overwhelming pressure to raise capital right away, thanks to the low cost with which Web start-ups can be created these days. Jacobsson, who advised social gaming firm Crowdstar after leaving Facebook in May 2009, recently set up his own social game start-up dubbed PlayHopper.

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Posted by:ramya - 30 Mar, 2010