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Startup Investing for Sport and Profit

How Andreessen Horowitz’s Jeff Jordan turned a pickup game and a team sports mentality into a VC strategy, and why the Warriors may not be the biggest game in town

The 58-year-old investor Jeff Jordan, a general partner at the Silicon Valley venture capital firm Andreessen Horowitz, has an unexpected style on the basketball court. His strategy is on display early one morning in the Stanford University practice gym where twice a week Jordan holds pickup games that start at 6:45 a.m. sharp. Wearing a gray jersey over his T-shirt, baggy red gym shorts down to his knees, and Adidas sneakers, with his gray hair buzzed short, Jordan bolts up the court all by himself on a fast break. But when he nears the basket he slows down and then pauses. Rather than taking the open shot, he passes back to one of his teammates, who scores. An assist for Jordan goes into the stat sheet.

These games at Stanford, where Jordan is on the athletics advisory board, are pulled together from a list of around 50 men, a mix of former college-level and professional athletes, fellow multimillionaire tech investors, and high-level executives from around the Valley. Joseph Lacob, the tech investor and majority owner of the Golden State Warriors (estimated net worth: $400 million), is a consistent participant, though absent today nursing a hamstring injury. Venture capitalists have a reputation as solo visionaries, but for Jordan, investing, like basketball, is a team game rather than a maverick’s sport.

"He really, really likes to win," says Jesse Wood, a participant in the game, former Brown University basketball player, and one of Jordan’s many protégés in the Bay Area. "He’s incredibly competitive, but he’s not an ass about it."

A former forward for Amherst College’s basketball team, Jordan took over organizing these games some 15 years ago from Tom McConnell, a managing director at Vanguard Ventures, who still participates. ("People would actually show up if I asked," Jordan says.) The long-running games, open-door mentorship policy, and Jordan’s personal network from his career helping pilot companies like eBay, PayPal, and OpenTable have turned him into a kind of godfather. He’s a benefactor for the Valley’s younger set, especially athletes and especially at Stanford, where Jordan got his MBA and his twin children currently attend.

Jordan’s network is knit together on the Stanford court. It’s the Silicon Valley equivalent of golfing with your boss, a level social playing field that allows younger guys to interact with older, wealthier versions of themselves who happen to be former NFL linebackers. When not struggling for layups, the players swap investment tips and workplace frustrations in this relatively intimate environment, a microcosm of the Valley’s larger arena, in which the right colleague or contact can mean the difference between billions of dollars and nothing.

The game has a quiet intensity, broken through with shouts when baskets are made. It might not look like he’s doing much, but at the end of the morning’s session, as is usually the case, Jordan’s team comes out on top.

Jeff Jordan has been an investor for only six years, joining Andreessen Horowitz — abbreviated a16z — as its fifth general partner in 2011, two years after the firm launched. The Valley venture capital industry is dominated by decades-old incumbents, so both Jordan and the firm are relative newcomers. But they’re emerging at a pivotal time for VCs. Investors’ influence is more visible in mainstream culture as tech startups occupy ever more of our daily experience, turning VCs into celebrities, including a16z’s legendarily eggheaded cofounder, Marc Andreessen. HBO’s too-true-to-life Silicon Valley casts investors as the emperors in the arena of entrepreneurial combat: However weird they are, they still decide whether you live or die.

While the industry deflated slightly in early 2017, the past decade has seen more money flooding into venture capital, with a wider class of investors funding early and midstage startups in the hopes of hitting on the next Facebook or Uber — "dumb money," as The New York Times Magazine labeled it in 2016. As Valley entrepreneurs get rich, they want somewhere new to put their capital, and on the surface, VC is a simple transaction: "An investment is four digital signatures I could do on my cellphone, and that’s it," says Jesse Middleton, a 30-year-old who was an early WeWork employee before becoming a general partner at the VC firm Flybridge in 2016. Presuming you already have access to the money, of course.

Like sports, there’s an undeniable romance to VC. Pledge allegiance to a motley team of engineers, designers, and executives, follow them through their travails, and if they win — IPO or get acquired — you get a pile of money (and pride). But just because one can invest doesn’t mean one should. "It’s never been easier to become a VC," says Hunter Walk, who cofounded the San Francisco firm Homebrew in 2013, "but never harder to stay one."

A changeover is happening between the old and new guard of tech investment firms, from established late-century names like Accel Partners and Sequoia Capital to nimble, highly branded, millennial operations like a16z and the big-batch incubator Y Combinator. Rather than discreetly signing checks, the latter use their public brands as part of their business model, leveraging celebrity to attract fund capital from limited partners, convince founders to take their money, and bring new talent onboard.

As the older firms recede from the picture, "there’s this generational change going on," Jordan says. "It does create an opportunity for new firms." But it remains to be seen if their publicity-friendly models work. In this milieu, Jordan is a humble, mild-mannered, almost boring tech veteran using his personal network to usher this new generation into place. It doesn’t hurt that when he joined a16z he happened to spearhead the investment of one of its most potentially lucrative startups: Airbnb.

I first meet Jordan at the a16z headquarters on Menlo Park’s Sand Hill Road, which is to venture capital what Madison Avenue is to retail. The office is in the same suburban compound as a Tropicalian wedding venue, with palm trees and spiky shrubbery emerging from a low-slung landscape of tan brick (catch it as an establishing shot in Silicon Valley). Water features channel and trickle over ziggurats around the wide pathways. The vibe is Californian Bank of Braavos: It is abundantly clear that the only labor performed here is the transfer of money, and only if you’re lucky. Behind the front desk inside the plush manila vestibule are two mounted photographs of what look like nuclear explosions: disruption?

The environs are redolent of quiet wealth, sprinkled with millions of dollars of art from artists like Tara Donovan, John Baldessari, and John Chamberlain. But Jordan’s office, on the second floor, is filled with basketball swag: trophies, balls, and a framed Julius Erving jersey. Of sports and startup investment, "it’s great to have the two worlds merged," he says, dressed in a Stanford jersey polo less formal than the rest of the firm’s suit jackets, reclining his ropy 6-foot-1 frame easily in a chair like an enthusiastic parent on the sidelines of a local soccer game.

Pro athletes, from Kobe Bryant to the Warriors’ Andre Iguodala and former Phillies baseball player Ryan Howard, regularly reach out to Jordan for advice in getting into startups. He treats famous athletes the same as anyone asking for help: "[Jordan] saw that I was serious about learning the ropes and gave me a portfolio of companies to study up on," Iguodala told San Francisco magazine in late 2016.

Jordan sees expanding interest in tech investment as a more exciting alternative to the staid public stock market, particularly in locker rooms. The risk is higher, but so is the potential reward. At Stanford, a primary feeder for Silicon Valley, tech’s draw is inescapable. "My daughter’s boyfriend is in the fraternity that Evan Spiegel was in," he says. "Everyone knows someone who." Stanford computer science majors become engineers, but even student-athletes graduate into VC firms and mature startups the way they might have once turned to Goldman Sachs.

"Stanford Business School now is a tech incubator," Jordan says. While he’s always willing to help out whoever asks, the sudden demand also makes him nervous. "Whatever is hot among the MBA students basically crashes a couple years later. In my year it was consulting, then private equity and investment banking; now half the class is doing technology. I told Andreessen, ‘Short, it’s over!’"

Part of a16z’s pitch is that rather than hire veteran VCs, they bring on general partners with experience operating a growing startup, theoretically enhancing their ability to pick the right companies and founders to invest in. Jordan’s background is more diverse than most. After graduating from Amherst undistinguished in basketball, he followed a girlfriend to Philadelphia. Unable to find a corporate job, he began working as a cook at local restaurants La Terrasse and the White Dog, a sideline he picked up in high school first as a dishwasher outside of Washington, D.C. By the time he found an admittedly crappy job in the insurance industry, he kept the cooking gig, even picking up a local best brunch award.

During his second Philly insurance job, at Cigna, a mentor-to-be named Rick Thatcher took notice of Jordan and started sending him into lackluster departments to clean shop. "I liked business but hated insurance," he explains. Thatcher pushed Jordan to go to business school; the Stanford admissions officer eventually told him it was his restaurant experience that made him stand out.

Another part-time job proved fruitful. When Jordan was coaching a coed intramural basketball game of Stanford MBA students, one of the teams didn’t show and the match devolved into a pickup game that included Jeff. "I go up to get a rebound and all of a sudden I find myself splatted against the bleachers. My future wife has got the ball, she’s butting me out of bounds, protecting me with her elbows and I’m just like, ‘Oh heart be still,’" he recalls with a warm flush of nostalgia one wouldn’t expect from a wealthy investor like, say, Peter Thiel. The other player was his classmate Karen Shishino. That they were both in other relationships at the time ("falling apart," per Jordan) didn’t halt the inevitable.

After graduation, Jordan worked for Boston Consulting Group in San Francisco in 1987, then moved to Los Angeles to be with Shishino, who was working at an investment bank. In 1990, he was hired by Meg Whitman at Disney. The then-sleepy entertainment company had recently come under the leadership of Michael Eisner and Frank Wells and was set to embark on a huge expansion.

People, companies, and events recur throughout Jordan’s career as they might in a novel, speaking both to the loyalty that he inspires and his own awareness of the way social connections have sped his path. Jordan’s next big job, president of Reel.com, was a dud, but Whitman, then at eBay, brought him on. "I went from running the worst business in the world to working at one of best business models I’d ever come across," he says.

He became senior vice president, overseeing ebay.com, and then left to become president of PayPal, shepherding its acquisition by eBay and in the process creating fortunes for now-better-known tech billionaires like Thiel, PayPal’s cofounder, and LinkedIn founder Reid Hoffman. Jordan joined the digital restaurant reservation platform OpenTable in 2007 as CEO, successfully took it public in 2009, and stayed until 2011, when he joined a16z. Venture capital was less a departure than a formalization of his hobby of advising smaller startups into a full-time job.

Andreessen Horowitz’s other innovation is that it emphasizes personnel, a strategy that lends itself to Jordan’s network approach. VC firms raise money from LPs and charge percentage fees to manage the investments. Usually, this fee would go toward guaranteed income for the general partners, minus office upkeep expenses. But as fund sizes have ballooned, a16z instead uses the fees to hire a slew of staff on internal teams that support their startups in areas like marketing, talent, and management, more along the lines of a Hollywood talent agency than a traditional bank.

Startups come to a16z as much for the skills of its staff, like Jordan, as its money. "There are very few people in VC who have actually been in operating roles. He understood the real challenges of running a company," says Jane Park, the founder of the ecommerce beauty company Julep, which Jordan led a16z to invest in in 2013. His personality was a rarity in the male-dominated world of VC. "You don’t come across a lot of women in this industry, and having somebody like Jeff who is just not an egotistical jerk is really helpful, especially for women-run businesses," Park adds.

In an email, Marc Andreessen describes Jordan as "a sensitive coach and a mentor." His praise is indicative of the wide-ranging role that Jordan plays at the firm, bringing abstract technology companies back down to earth as a kind of token normal human being: "Jeff is highly curious about everything, broadly engaged in many markets and fields, and deep in cultural areas not typical of Silicon Valley, including sports, entertainment, and food." Rather than seeking transfusions of young blood to live forever, as Thiel is rumored to do, or stockpiling survivalist gear, the hobby of Y Combinator president Sam Altman, Jordan goes home at night, shoots some hoops, and is in bed by 9:30 p.m.

Airbnb, too, came to Jordan as a result of his past experience. The company didn’t inspire him at first. "I thought it was the stupidest idea I ever heard. I like my privacy," he says. But in 2011, he saw cofounder Brian Chesky presenting at an investor conference in Arizona, and it clicked: "Oh my god, I get it, it’s eBay!" Airbnb was a marketplace for space the way eBay was for stuff. Jordan asked to meet Chesky afterward only to discover that he was the only person Chesky wanted to meet, for the same reason. Airbnb became one of Jordan’s pitches to a16z during his interview process. As a result, the firm led the company’s 2011 Series B round with a rumored $60 million on a $1.3 billion valuation; it’s now valued at $31 billion.

A firm needs only one or two big investments to pay out to make its reputation, but that’s not to say all of Jordan’s prosaic picks have been winners. "I thought Fab.com was going to be the cat’s pajamas," he says. "Then it was a huge, smoking crater."

In the newer, friendlier wave of venture capital, building out your interpersonal network isn’t just a nice thing to do. It also helps with your deal flow, a phrase that Jordan applies as often to people as investment opportunities.

Getting to the Stanford basketball game from San Francisco requires a drive down the peninsula when the Bay to the east is still glowing crystal in the dawn and the campus is quiet save for security guards. Jordan sends an email out the day before each game at 5:50 a.m., and the first 15 guys to sign up, usually by 5:51, make it in. It’s competitive but casual. "What you’re trying to optimize for is first don’t get hurt, then it’s no assholes," he says. To get on the list, Jordan will first invite a prospect to fill an open slot a few times. If the games go well, they’re in. "It’s a completely opaque process to the person. We don’t tell them, ‘You get a tryout,’" he explains.

A few men sit out each round, and the teams aren’t fixed — Jordan will swap if he feels it’s imbalanced. Everyone calls him Coach. The group speeds back and forth on the bright court with a minimum of conversation while the spare players shoot on the other empty hoops and talk shop. "Raising money and being a founder, it’s a shit show," one sighs.

Basketball is a chance to unwind outside the hierarchies of the office. "As far as a networking opportunity, there was really good people to know there," says Jesse Wood, the former Brown basketball player, now a senior vice president of the real estate firm T3 Advisors. "In this setting, everyone is on equal ground. You can talk to people like you would talk to teammates or competitors. Jeff turned [from] a guy that I met who ran a ball game to a mentor of mine who I bounce career paths and investment opportunities off of."

After Jordan’s team wins the day, we get breakfast at Jimmy V’s, an on-campus canteen for Stanford’s athletes filled with pennants, jerseys, and diner kitsch where the investor orders a small burrito. Owner Jimmy Viglizzo notices Jordan and comes over to say hi, one of many to do so, including Stanford’s rugby coach, who suggests he join a game. "What he does is they play basketball, they come here and eat," Viglizzo says. He walks off behind the counter murmuring, "The money on that court …"

Jordan grew up upper middle class in Philadelphia and D.C., his father working in pharmaceuticals PR before joining President Nixon’s office for drug abuse prevention. His mother was a homemaker to Jeff, an older brother, and a younger sister. Jordan’s persistent presence in the lives of others owes itself to a stark absence in his own, however. When Jordan was 15, his father died of cancer. He underwent surgery but the illness was terminal, though Jordan’s parents didn’t tell him at the time.

When Jordan found out his father died, it was during a game. "I was at a football match one Friday night in high school and my brother comes running out and says, ‘You gotta go home now,’" Jordan says. "It sucks, but there are parts I take comfort in. Some of the parents who were in the community just took a special interest in me." One friend’s father, in particular, felt called to provide a masculine influence. "He would take me to a basketball game, we would drink half a dozen beers, and then dump me off on the steps. My mother would get so mad," Jordan says. "When people go so far out of their way to help you, you want to pay it back."

It’s clear in speaking with his protégés that Jordan provides for others the kind of external guidance that he wasn’t able to take for granted. "In many ways he is a surrogate father to many student-athletes," says Stanford’s athletic director, Bernard Muir, in his corner office on campus. "They seek his advice."

"From his perspective as a former student-athlete, he gets it. You have skills, you’re smart, you’re a hard worker, but you haven’t really had opportunities to build a résumé beyond athletics," says Jack Ryan, a 24-year-old former Stanford basketball player whom Jordan shepherded into opportunities at startups like CircleUp and Anki.

Athletes often face a crisis moment upon graduation even from as prestigious an academic institution as Stanford. Practice prevents spending time on other extracurriculars, so they don’t know where to turn if they’re not going pro. Jordan explains the tech industry to them and tries to figure out where they might fit in. "When I left a conversation with Jeff Jordan, I felt OK. I have a path forward right now," Ryan says. He works in operations at a growing health-tech startup.

"You always want to have that plan B option," says Blake Martinez, a former Stanford linebacker now with the Green Bay Packers who roomed at Jordan’s home in Portola Valley one summer. There was a full-size basketball court in the backyard, but the domestic environment was otherwise exceedingly average: Martinez talked about his day during family dinners and played Dota 2 with Jordan’s tech-inclined son.

If Jordan has a unifying theory, as so many investors do — be it about startups, a basketball game, or living a good life among people you love — the key seems to be an attitude of openness rather than capitalist Darwinism: Keep your circle as wide and interconnected as possible. The mentality is less common than many suggest in Silicon Valley.

In 2014, a former engineer and Boston Consulting Group staffer working in New York named Anu Hariharan emailed Jordan about one of his blog posts while she was researching a hedge fund job application. Jordan told her that she should apply to a16z instead. Six months pregnant at the time, she soon flew to San Francisco and got an offer, which she discussed with Jordan before accepting. The move proved pivotal: She’s now a partner at Y Combinator.

"There are very few VC firms. It’s a very tight-knit community. The supply of talent is a lot more than what roles are available. Most of the teams in Silicon Valley tend to hire product managers from more recent startups," Hariharan says. "If Jeff had not taken the chance to interview this candidate who looks very different from everyone else that VCs had hired or even a16z had hired to that point, I wouldn’t be in Silicon Valley."

Yet even the most open social circle is insular, and a millionaire investor betting billions on startups is still just that. Jordan can’t only be a friendly Valley guidance counselor; he’s more a team player trying to net his side all the advantages he can to guarantee a win.

On paper, a16z’s funds are doing well, with valuations at two and three times the original investment, but not as well as some of its peers, like Sequoia, according to a 2016 Wall Street Journal report. The results won’t be clear until some of the firm’s biggest investments are acquired or go public — a full life cycle of a dozen years. There’s also the lingering question of whether its people-forward approach makes a16z different enough to weather the coming tumult in the future of investing.

The four-year-old VC firm Bloomberg Beta — its namesake its only investor — is on the 22nd floor of the art deco Pacific Telephone Building in downtown San Francisco rather than Sand Hill Road. Following the tide of startups like Twitter, Airbnb, and Uber moving from the peninsula to the city, the firm might represent yet another, younger microgeneration of VC firms. Everything in the airy office space has an angular, no-nonsense efficiency, down to a wide, open aquarium tank that’s like a fish petting zoo.

The engineer turned investor James Cham is one of Bloomberg Beta’s few general partners. In an insulated booth in the kitchen area, he casts some doubt on the idea that the brand name of VC dollars has much of an impact at all. "A VC who actually believes they’re important is a bad VC," he argues. "All the value creation comes from the founder." Adds Homebrew’s Hunter Walk, "It’s unclear whether, past a certain point, more venture capital can increase the number of great companies, rather than just more companies."

Whoever you know, however large your fund or your staff, there are a limited number of successful startups or founders to back and more competitors all the time. Hitting big as a venture capitalist might simply come down to timing, being in the right place at the right moment to score. This may be Jordan’s moment, but it took him a long time and a lot of help to get here.

He remembers receiving a phone call from Steve Jobs in 1999 when he was looking to leave Reel.com. Jobs asked Jordan to interview at Apple. During the subsequent meeting, Jobs asked him two questions. The first: "Why did you work at Disney? Disney sucks. I hate Disney."

The second reflects Jordan’s late-bloomer career path: "How do you go to business school in Silicon Valley in the late ’80s, the place where miracles are happening, and you left to go to L.A. to become a management consultant?"

"You’re right, it took me 15 years to find it," Jordan says he told Jobs. "I found it, I’m here. But man, I wish I found it quicker."

Back in 2017, he’s already signed up for a16z’s new fund, another dozen-year commitment to the tech industry. And once he’s finished reminiscing about Jobs, he’s off on another fast break, to a board call with another of his successful investments: Pinterest.

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