Sean Parker Splits From Founders Fund

Posted: Mar 6 2014, 5:36pm CST | by , Updated: Mar 6 2014, 5:54pm CST, in Technology News


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Sean Parker Splits From Founders Fund

Founders Fund has one less founder.

Billionaire Sean Parker is leaving Peter Thiel’s success venture firm where he had served as general partner for eight years. According to Fortune, Parker will have no role in the $1 billion “fund V” recently raised by the firm. Parker (Facebook’s first president) joined Thiel (Facebook’s first investor) at Founders Fund 2006.

Parker’s photo and bio have been removed from the Founders Fund Website. But it used to say:

Sean Parker

Sean Parker is an entrepreneur with a record of launching genre-defining companies that reinvent ways to spread information online.

In 1999, at the age of 19, Sean co-founded Napster and changed how people think about and share music. Two years later, Sean co-founded Plaxo, pioneering viral engineering technology for updating contact information. Sean served as Plaxo’s president until 2004, when he joined with Mark Zuckerberg to develop the online social network Facebook. Sean was Facebook’s founding president, helping transform that small start-up into an industry giant. In 2007, Sean co-founded Causes, which promotes on-line philanthropy; in 2010, he joined Airtime as a co-founder, reuniting with Napster co-founder Shawn Fanning at a social video company backed by Founders Fund.

Airtime, the much hyped start-up that seemed to attract money from every V.C. in the valley, was a rare flop for Parker. It overshadows the lucrative investment he made in Spotify on behalf of Founders Fund. As I wrote before, here’s how it went down:

Two years ago a friend told Parker about a Swedish music site called Spot­i­fy that offered unlimited, legal songs. He scoured his network for an introduction, and without seeing the product in action, blindly e-mailed founder Daniel Ek, outlining his ideal music platform, hoping Spotify fit the description.

Ek had been a huge fan of Napster, and Parker’s suggestions caught his attention: “This was someone who had spent more time thinking about this than I had done myself.” After a series of e-mails and a test drive of the platform, Parker was sold and tried to invest. Armed with a cash infusion from Hong Kong billionaire Li Ka-shing, Ek wasn’t looking for any more. Parker would have to prove his way into the company. He introduced Spotify to Mark Zuckerberg (a Facebook integration plan was scheduled to be introduced shortly after this article went to press) and helped open doors at Warner and Universal, winning over Spotify’s board: Parker eventually invested about $30 million.

That $30 million bet on Spotify was made at a valuation of about $250 million. Last fall Spotify was valued around $4 billion–making Founder Fund’s stake (if it hasn’t been diluted) worth $480 million (a 16-bagger).

Reports say Parker will remain on Spotify’s board. He’s also in the middle of relaunching Airtime. I haven’t heard anything back from Parker’s camp–I”l let you know if I do.

Follow me on Twitter: @Stevenbertoni

Source: Forbes

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