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A New York VC Spotlight: Alan Patricof


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Alan_Patricof

With over 40 years of venture capital experience and a variety of successful investment firms, Alan Patricof has become one of the country’s leading authorities on public and private venture capital, which is why he is often revered as the industry’s “founding father.”

The pioneering venture capitalist founded one of the world’s leading venture firms, Patricof & Co. Ventures, in 1969, which later became Apax Partners.  Patricof was instrumental in the early stages of numerous major global companies like Apple and AOL, facilitating their start with seed funding.  After years of large-scale investments, Patricof is now concentrating on a smaller investment business model.

Patricof founded Greycroft Partners LLC, a venture capital firm focused on the digital media sector, in 2006.  The firm makes smaller investments, about $500,000 to $5 million, in digital media startups that, with the help of advancing technology, need less initial investment than startups did when Patricof entered the industry 40 years ago.

“What all of us had observed was that funds were investing more and more based on the size of the fund rather than what the capital needs were of these young, emerging businesses,” Patricof told CNN Money in 2012.

Patricof’s strategy seems to be paying off.  Greycroft’s first fund gave investors back 3 times what they initially invested.

Pulse, a news reading app for mobile devices, is one small tech startup Greycroft invested in about 3 years ago.

“Alan Patricof is like your strict father,” Pulse co-founder, Akshay Kothari, told CNN Money.  “He’ll sometimes be hard on you, but he deeply wishes the best for you and your career.  He thinks of Pulse as his own company – I can’t count the number of days he’s called me at 2 a.m. New York time with an idea.”

Patricof holds a long list of advisory board positions, including New York Small Business Venture Fund, Trickle Up Program and Columbia University Graduate School of Business.

Patricof is an advocate for international venture capital as well.  He has traveled to numerous countries in Africa to address venture capital development and social inequality.  He serves as a board member for the International Finance Corporation (IFC) and World Bank.

The venture capitalist has been recognized by numerous organizations for his industry accomplishments.  In 2007, President George W. Bush appointed him to the Millennium Challenge Corporation.

Patricof holds a degree in finance from Ohio State University and a MBA from Columbia University Graduate School.

VC Firm:

Founder and Managing Director of Greycroft Partners LLC, (Founded in 2006)
Founder of Patricof & Co. Ventures, now Apax Partners, (Founded in 1969)

Sectors:

Ad Tech, Commerce and Transaction, Gaming, Publishing and Content and Software.

Boards:

Columbia University Graduate School of Business
Global Advisory Board of Endeavor, Inc.
International Finance Corporation
Millennium Challenge Corporation
National Foundation for Teaching Entrepreneurship (NFTE)
New York Small Business Venture Fund
New Jobs for New York Association
Technoserve
Trickle Up Program
World Bank

Expertise Areas:
Digital Media Platforms, Venture Capital Investments, Seed Funding and Private Equity.

Selected Investments:

Winners:

The Huffington Post sold to AOL for $315 million
M5 Networks sold to ShoreTel for $146 million
Takkle sold to Alloy for undisclosed amount
paidContent.org sold to GigaOM for undisclosed amount through acquisition of ContentNext Media
Pump Audio sold to Getty Images for $42 million

Blogs, Twitters & Websites:

Twitter
Greycroft Website

Memorable Quotes:

On African countries and the state of their financial systems:  “Surprise, surprise, their banks and financial systems are in better shape than ours, as ‘they never bought our toxic instruments’ – probably because there were too many eager buyers in the developed world.  And while they may not have as many houses or banks as ours, their systems of mortgage financing are solidly asset based.”

On the Enterprise Value Tax:  “The Enterprise Value Tax is unprecedented, punitive and has no justification in the tax code.  It will create the first class of American business that will not be afforded capital gains treatment upon sale or transfer, and will affect millions of well-meaning people.”

On the “small is beautiful” business concept:  “Certainly, in many instances there is an absence of adequate management talent and, most importantly, a legal framework to create a more hospitable environment.  But, first and foremost is the need for patient double bottom line capital that is willing to sacrifice some degree of financial return in exchange for accomplishing worthwhile social objectives.  This translates into accepting potential single-digit returns in exchange for creating thousands of jobs over an extended period of time.”

On the Millennium Challenge Corporation and the United States’ foreign aid policy:  “MCC was built by Congress to operate more like a business.  As a businessman, I can tell you it is better to control the outflow of funds, measure outcomes and discipline the process rather than advancing funds indiscriminately with nothing to show for it, which has been done in the past.  With the fruits of the efforts from the past 3 years ripe, now is the time to increase funds for MCC, not reduce them.”

On the increasing number of startup businesses:  “I think we have too many startups at the moment.  There’s a lot of mimicry, a lot of duplication.  If I see another company in the food business that’s going to deliver food to my house…”

For more information on startup funding and investments, visit our funding section.

 

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About the author: Meredith Lee

Meredith is currently studying Journalism and English at the University of Wisconsin – Madison, where she focuses on blending new and traditional medias to enhance communication for a future career in digital media. She enjoys everything related to new media, investigative journalism, international communications, cooking, traveling and music festivals.

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