There is a Matt Marshall piece in today’s SJ Merc beating the drum about the surplus of cash available to hot-hot Web 2.0 companies. I’m not going to touch that issue, as I’m not really sure there is anything new to say, but I was interested to catch a throwaway comment part-way through about how Doug Mackenzie ended up investing in blog search firm Sphere:
[Sphere management] selected Doug Mackenzie, a venture capitalist from big-name venture firm Kleiner Perkins Caufield & Byers. Interestingly, though, Mackenzie invested so little money that he did so out of his own side fund, called Radar Ventures — out of which he doesn’t usually invest in Internet companies.
This is the second time in a couple of weeks that I’ve run into a situation where a prominent venture guy front-ran his main employer — I’m assuming, perhaps wrongly, that Mackenzie intends to eventually have KPCB invest in Sphere — using his own venture fund or an affilliated one.
It raises some interesting questions:
How common is this becoming?
How do GPs satisfy the LP investors from their day job that they’re dealing fairly?
How do partners reconcile the multiple hats that they’re wearing? Who are you when you’re on the board?