https://www.rizvitraverse.com/at-twitter-working-behind-the-scenes-toward-a-billion-dollar-payday/

At Twitter, Working Behind the Scenes Toward a Billion-Dollar Payday

November 7th, 2013 via New York Times

Prince Alwaleed bin Talal of Saudi Arabia looks like a big Twitter winner. So do the moneyed clients of Jamie Dimon.

But as you’ve-got-to-be-joking wealth washed over Twitter on Thursday — a company that didn’t exist eight years ago was worth $31.7 billion after its first day on the stock market — the non-boldface name of the moment is Suhail R. Rizvi.

Mr. Rizvi, 47, runs a private investment company that is the largest outside investor in Twitter, with a 15.6 percent stake worth $3.8 billion at the end of trading on Thursday. Using a web of connections in the tech industry and in finance, as well as a hearty dose of good timing, he brought many prominent names in at the ground floor, including the Saudi prince and some of JPMorgan’s wealthiest clients.

Twitter’s successful opening also made gushing winners out of the usual suspects, including its co-founders Jack Dorsey and Evan Williams and a spate of more traditional tech investors. But Mr. Rizvi’s rise illustrates how a new tech investor class with deep Wall Street connections is carving new paths into the unfamiliar and insular terrain of Silicon Valley.

Traditionally, stalwart venture capital firms like Kleiner Perkins Caufield & Byers and Accel Partners use their location in the Valley and their sizable funds to buy a piece of a start-up and have a hand in the company’s direction. And Benchmark Capital and Spark Capital, two such companies, did get sizable pieces of Twitter.

But Mr. Rizvi and others like him have formed a network of investors, including prominent mutual fund companies like Fidelity, T. Rowe Price and BlackRock, that sometimes have even deeper pockets and a willingness to buy smaller pieces and assume no management control.

Many start-ups say they value the new source of hands-off capital from these investors outside Silicon Valley’s palace intrigue. Aaref Hilaly, a venture capitalist at Sequoia Capital, a top venture company in the Valley, said the new type of investors could offer entrepreneurs some breathing room.

The entrepreneurs “don’t have to have all their assets tied up in a company, which is inherently risky,” he said. “It lets them have their cake and eat it too.”

Still, some of Mr. Rizvi’s counterparts on Sand Hill Road, the epicenter of venture capital, say the influx of new money will drive up start-up valuations in what is already a crowded part of the market.

“We all know how this plays out,” said Paul Kedrosky, a venture capitalist and entrepreneur. “There is no question that this is fueling some kind of bubble.”

Investors taking part in this new strategy include Chase Coleman, of the Manhattan hedge fund Tiger Global, who rolled a large pre-offering stake in Facebook into other hot start-ups, and Thomas Laffont, at Coatue Management, another Wall Street hedge fund that recently set up shop on Sand Hill Road.

But Twitter’s public offering represents a coming-out party for Mr. Rizvi, who remains largely a mystery in Silicon Valley despite his growing number of tech investments. In Silicon Valley, and even at Twitter’s San Francisco headquarters, prominent investors and executives said they had not heard his name until it popped up in public disclosures by the company last month.

Mr. Rizvi declined several requests for an interview. But interviews with nine people who are close to Mr. Rizvi or have worked with him on past deals, all of whom would speak only if they were not named, painted a picture of him as a strategic power broker who prefers to operate behind the scenes.

His money and connections have also led to slices of several other hot start-ups: Flipboard, the social news app; Pinterest, an online pinboard; Square, Jack Dorsey’s payments service; and of course Twitter, Mr. Dorsey’s other company.

Mr. Rizvi was born in India and raised in Iowa Falls, Iowa, and although he is known as a quiet man, he has built a powerful and diverse group of friends from his perch in Greenwich, Conn. Those in his circle include Richard Branson, founder of the Virgin Group, and Salar Kamangar, chief executive of YouTube. And Mr. Rizvi has been seen partying atop Eric Schmidt’s yacht, the Oasis, at Cannes.

Before finding a path to Silicon Valley, Mr. Rizvi invested in telecoms and manufacturing, but his biggest moves were in the entertainment industry. In 2004, he asked a mutual friend to introduce him to Jeff Berg, then chairman of International Creative Management, the talent agency, which was looking to expand. A year later, Mr. Rizvi led a private equity investment in I.C.M., taking a controlling stake for $100 million — with $95 million in debt financing from Merrill Lynch.