How many young entrepreneurs had heard of Mohr Davidow before the recent announcement of their investing $20 million in Hi5? You might remember them if you’re an older technologist, but the venerable VC firm has basically sat out web 2.0.
I've met some of the partners (like Erik Straser and Sam Jadallah) over the years ... great guys ... but guys who have made their money in companies you've never heard of. Just go to their web site (they have a great domain name, mdv.com, which shows just how long they've been around) and you'll see that they're bragging about companies that made great returns but you'll be hard pressed to recognize more than three of the companies.
So enter Hi5
Young VC David Feinleib pushed the deal there that is a no-brainer to me. Here's why the deal makes sense to MDV at almost any valuation:
1. great branding. Hi5 is one of the most high-trafficked sites and is one of the only major social networks that's left to invest in. This helps put Mohr Davidow on the map as a VC to talk to for consumer Internet companies.
2. little downside. Even if things go very wrong, there is still a very high likelihood that MDV at least gets its money back.
3. Hi5 is actually an awesome company. Without taking any venture capital until now, they built a great business. And founders Ramu Yalamanchi and Akash Garg are very impressive ... This is definitely an A team.
Congrats to MDV & Feinlab to winning this deal and looking forward to great things from Hi5.
