Spark Capital isn’t the only existing investor buying Foursquare employee stock in an up round, I’ve learned. Legendary investor SV Angel is, too. That’s an unusual move considering that the firm typically focuses on early-stage deals. Why?
Yes, there’s the promise of Foursquare becoming the way that you find interesting people and locations around you, the source of data for deals, discovery and yield management. But there’s a more human reason why these investors are going out of their way to get more stock at a higher price, too. And its name is Dennis Crowley, chief executive officer.
When Foursquare was younger, he would make investors wince by talking about how much he loved working with a small team. One needs a big team, after all, to become the multi-billion dollar business that gets returns on big investments.
That has changed. Foursquare has over 100 employees now, and is successfully recruiting top engineers from industry leaders like Google, and from top technical universities like Stanford, Berkeley and Carnegie Mellon. You can get a sense for this from LinkedIn data, which shows technical hires surging in recent months.
Investors love having a founder CEO, the person with the vision, the moral authority and the drive to make it all happen. SV Angel, who didn’t comment for this story, publicly says that this is what they always look for.
But Crowley’s evolution as a chief executive, and the growth of the company overall, could also be related to the departure of Naveen Selvadurai. Om got the scoop today and Foursquare has since confirmed the news with us. As a company goes from startup to billions, new executives come in, the problems change… and sometimes cofounders come to feel that they’ve done all that they can. That’s what Naveen says today in his blog post on the move:
….i’ve worn a ton of hats: from product to engineering, from funding rounds to roadshows, from recruiting to evangelizing. but, after three years, i feel i’ve done all i can do and i’m moving on. dennis and i have been discussing timing for a while, and we decided that now, on this anniversary, it feels right to begin the transition. so this will be my last month working at foursquare. over the course of the next few weeks, i’m going to be taking a step back as my final projects near their release.
He’ll continue on as a board member and adviser, but otherwise move on to new projects. The transition feels reminiscent of the evolution of another huge new company. Facebook’s Mark Zuckerberg saw a number of cofounders and early employees leave left years ago, but he steadily grew into the CEO role and today is now leading the company towards a blockbuster IPO.
A few other notes on the new investment. I’m hearing that the amount Spark put in was large, but under $50 million, that the SV Angel funding is a small portion of it all, and that other investors may be buying up stock, too.