News & Insights
Maveron Turns 20
On June 11, 1998 Maveron closed its first fund. In some respects, 20 years feels like an eternity, but at the same time, the past 7,305 days have flown by quickly.
20 years ago today, the NASDAQ closed at 1,749. President Clinton was in office. Amazon had been publicly traded for only 13 months, Google didn’t exist, and Facebook would not be created for another six years. Only 42% of U.S. households had a PC and only 36% had a cell phone. By the way, smartphones didn’t exist! Although we knew technology was rapidly integrating into consumers’ lives, I can’t say that we envisioned the world we live in today.
I’m feeling reflective on this milestone day. The famous American physicist Arthur Leonard Schawlow summarizes Maveron’s history best, “Anything worth doing is worth doing twice, the first time quick and dirty and the second time the best way you can.”
Looking back, I realize that the unique circumstances that occurred when we started Maveron in 1998 gave me a false sense of confidence. Our first investment was eBay on June 30, 1998. The company went public three months later and within two years, our investment was valued at over 50x our initial buy-in price. Next came drugstore.com, worth 13x our cost nine months after we invested in late 1999. I didn’t spend a lot of time thinking about our people, our culture, or the consistency of our stage-agnostic strategy, but things just seemed to work. At the time, I mouthed the words “don’t confuse brains with a bull market,” however I didn’t really have context for that intuition. The 2000-2002 downturn slowed us down a bit; but, we raised our first institutional fund in 2004 without a huge challenge. In fact, it wasn’t for another decade that I truly appreciated another lesson about the venture capital business – the ability to raise money has no near-term correlation with the ability to repeatedly make money.
Then the fall of 2008 arrived. Over the next two years, we saw a recession that battered the core of where we invest – the American family. On top of that, some of our endowment investors were feeling a mass liquidity crunch and pulled back from venture capital and private equity investing almost overnight. As a result, we retrenched – smaller team, smaller office, smaller fund – and after asking ourselves what we do best, we returned to our roots of early-stage investing in consumer brands. In the fall of 2009, we made a Series A investment in a team we believed in at pre-launch zulily and the Maveron we are today was born. We saw what right looks like for us and made sure our team and strategy were set up to execute on that focus. We committed to finding great entrepreneurs in obscurity and doing everything we could to help them scale to ubiquity. We committed to investing early – only seed and Series A rounds – before success or traction are obvious. This new approach enabled us to be the first institutional round of capital and develop a strong relationship with the founders we wanted to back. It also provided us with valuations and ownership percentages we felt were compelling. Competing on check size is not a reliable moat so we decided we didn’t want to play that game. I also took a hard look at myself – who I was as a leader, a firm-builder, a person, how I wanted to be remembered – and committed myself to act differently going forward.
It’s now ten years since the firm almost shuttered during the Great Consumer Recession. Our investment in zulily returned 117x times the money we invested and our 2008 vintage year fund is amongst the best of its class. Today we are a small team that I love, executing on a strategy that is working well. The strategy plays to our strengths and what makes us different in a highly competitive market. I know we still have a lot of work to do to be recognized as the best, but that’s the fun part. Our team wakes up every day to tackle the opportunity in front of us, and it’s an incredibly exciting environment in which to back consumer brands.
So, where does Maveron go from here? The world is an ever-changing and chaotic place. The NASDAQ is over 7,600. The country is highly polarized, Washington is a mess, and the significant bifurcation of wealth that exists in America is worsening. Venture dollars deployed and valuations for successful private companies are at an all-time high. Fund sizes have ballooned across all stages of private capital. Consumers – whether Gen Z, millennials, or baby boomers – are empowered with technology and want more than value and convenience from their brands. More than ever before, today’s consumer wants the brands they buy from to stand for something. And entrepreneurs and investors shouldn’t be any different. Entrepreneurs today should expect their investors to stand for something. As our co-founder and my friend, Howard Schultz, often says, “Our grandchildren will look back at this time and ask us what we stood for.”
So, when I think about the next 20 years at Maveron, I will be most proud when we back consumer-tech companies that achieve outsized success because they stand for things that matter, are ubiquitous, and improve the lives of millions of consumers.
I will be most proud when the founders who created those businesses come from all walks of life, are fully representative of the gender and racial diversity that make up our country, and choose to partner with Maveron because our brand and network attract world-class entrepreneurs who refuse to accept the status quo. We are going to treat the Maveron team, the founders we back, and everyone who comes into our world with humanity, respect, and curiosity. We will continue to look for products that make people’s lives better and brands that build us up and bring us together. We will continue to partner with a diverse set of non-normal, maverick entrepreneurs with the vision to see where consumers are going. In fact, 20 years ago our name — Maveron — was created from the combination of Maverick + Vision.
There are so many people I’d like to thank who have contributed to our firm over the past two decades. First and foremost, I’d like to thank my dear friend, mentor, and co-founder Howard Schultz. Without his incredible support and encouragement, I never would have had the opportunity to start Maveron in 1998. It was his unique consumer insight and brand-building acumen that eBay sought out at our inception. I’d also like to thank the founders and leaders of the companies we’ve had the privilege to back. We are only as good as the great entrepreneurs we partner with. I would like to thank my Maveron mentors – Joel Peterson, the late Coach Bill Campbell, and the late David M. Silfen. As the years pass, the perspective and wisdom that you have shared is so appreciated. I’d like to thank the Maveron team, especially Jason, David, Anarghya, Pete, and Elise – it’s great to be partnered with you. Also, a shout out to past team members who have helped get Maveron to where it is today. I also want to thank Maveron’s limited partners, many of whom have been doing good work and contributing to building a better world for many decades longer than we have been in business. We are motivated by the great missions you support. Especially, Phil Rotner of Boston Children’s Hospital who has never stopped believing in us.
Thankfully, we’ve been blessed with some successes over the last 20 years. It’s been a lot of fun and a ton of hard work. However, as I reflect on where we are twenty years in, I’ve never had more fun or been prouder of the firm than I am today. We are just getting started!
With much gratitude and respect,
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