The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies, 2nd Edition

CHAPTER 10 Emerging Managers: A Promise of the Future

“Our best investment ever was in a first-time fund.”¹

—Sergey Sheshuryak, Adams Street Partners, a fund of funds (FoF)

Chamath Palihapitiya, employee number 40 at Facebook and the founder of venture fund The Social+Capital Partnership, is hailed by many as an unconventional venture capitalist. Institutional investors might label him as an emerging manager. Palihapitiya, who stood 39th on a list of Silicon Valley's 100 most influential people in 2012, was born in Sri Lanka.² His family immigrated to Canada to escape a civil war. Soon after obtaining a First Class Honors degree in Electrical Engineering from the University of Waterloo, he moved to California. Prior to launching his venture fund Social+Capital, he held senior management positions at AOL and Facebook. He joined Facebook when it had just over 50 million users and left with 750 million users. While at Facebook, he was making personal bets on start-ups such as gaming company Playdom and software company Bumptop. His bets started to pay off: Disney bought Playdom and Bumptop was sold to Google. The payout from these investments and Facebook planted the seeds for a career path as a venture capitalist (VC).

“The best VCs are like the best entrepreneurs—they can raise money quickly. Chamath has deep product-market skills, which were further honed as employee number 40 at Facebook,” says one institutional investor. Palihapitiya's angel investment chops, and his own ...