Subbu Murugan

DST, founded by Yuri Milner, is popularly known for its big ticket investments in companies like Facebook, Zynga, and Groupon.  At the time (Mid 2009) of Facebook investment - USD 200 million on a USD 10 billion valuation - anyone who followed this space was totally confused.  In six months they followed it up with a USD 180 million in Zynga.  In april 2010 they put in USD 135 million into Groupon at a USD 1.35 billion valuation.  Comments like ‘Russian mafia’, ‘What were you thinking’ were common in the blog commentary of many prominent industry analysts.  When Facebook went on to announce Goldman Sachs investment to the tune of USD 1.5 billion on a USD 50 billion valuation and Google offering to buy Groupon for USD 6 billion, Yuri started to look very smart and same crowd is calling him a visionary.  

Yesterdays announcement to YC’s latest batch of 43 companies that Yuri in his personal capacity is putting USD 150K as convertible notes with no cap in all companies is still echoing in the community.  Now the analysis carries on with questions like ‘Is this good for Silicon Valley’, ‘Is he disrupting the Angel investing scene’, ‘Is it good for the startups’ etc.

As an entrepreneur, I feel that this is good for the startups, the investment community, the valley and not to mention DST and Yuri.  YC batch has some of the best and brightest people and their ideas have been shaped to become investment grade.  Most of these companies will get acquired and mostly by companies like Facebook, Zynga, and Groupon who have raised a lot of money, and by companies like Google, Microsoft, Yahoo etc who have money and need to find their groove in the new social world.  Its a no brainer for Yuri’s investment; he will do good on this USD 6 million personal bet.

For the others in the startup ecosystem, this is great news.  Startups are froth with risks and uncertainty.  When strong players (investors, buyers, startups, entrepreneurs) exhibit confidence others with lesser appetite for risk in the same set follow.  More players means more chances of successes and more chances of failures too.  It also, yields to many mediocre businesses (some call these lifestyle businesses) which is not bad either in my books.  

So heres to interesting times ahead and cheers to Yuri!