It’s no wonder Hoffman was recruited into venture capital. He’s led an active career as an angel investor throughout the past decade. Among his dozens of investments are Flickr, IronPort Systems and Last.fm, to name a few.
Hoffman, who typically invested between $25,000 and $75,000, also has the hottest portfolio on the planet right now. Not only does he presumably have a sizable chunk of LinkedIn—which is expected to have a multibillion dollar IPO in the next couple of years—but he is also an investor in Zynga Game Network, Facebook (which received its first check from Hoffman) and Twitter (through the sale of his portfolio company Mixer Labs).
Hoffman recently talked with PE Week Senior Editor Constance Loizos about his investment activity.
Q: You personally backed the private, home furnishings website One Kings Lane after joining Greylock. Are you still investing your own money in seed stage deals?
No, all of my investing I do now is for Greylock. But Mark Pincus [CEO of Zynga] and Ali Gelb Pincus [wife of Mark and co-founder of One Kings Lane] are good friends. When I joined the firm, I said I have these things I’ve been working on and I’d like to keep good relations with the entrepreneurs, and [Greylock] said they were fine with that.
Q: What’s your role at Greylock?
A: I’m a partner just like any other and I’m an investor in Greylock’s fund. I’m at Greylock on Mondays and at LinkedIn Tuesday through Friday.
Q: How does venture capital compare to what you imagined prior to joining Greylock?
Most of it was stuff I was expecting. You know, as opposed to making a decision as an individual, you make it as partnership. You kind of work on the partnership, too, including helping some of the younger members of the firm and develop their practice. That’s something I hadn’t focused on [before]. You also do portfolio reviews at a regular beat, where normally I keep that stuff in the back of my head as an angel.
Q: Greylock is investing from a $575 million fund. What do you think about the notion of macrofunds vs. microfunds, given that you’ve focused on seed stage investments mostly?
The thought that you can fund successful software companies on much smaller amounts of capital is absolutely correct. But all the companies that get to scale and get to an interesting size—witness Facebook, LinkedIn, Twitter, Zynga—all go through a venture financing; they’re all part of the discontinuously high returns that make a VC firm interesting.
It’s not that I disbelieve in the micro VC market. I think there’s a good opportunity there. I just don’t think it cancels out the opportunity to effectively run larger funds.
Q: Why didn’t you create your own venture practice, a la Marc Andreessen or Peter Thiel?
: In some sense, Greylock is a new practice. It’s in the process of becoming a Silicon Valley firm, and David Sze and Aneel Bhusri and the rest of the team embody the virtues that I’d want if I were building my own firm. They have deep operating experience, a strong ethic around how they partner with entrepreneurs, and multiple levels of experience in building multibillion dollar companies.