Yuri Milner, Fresh Air to Silicon Valley

Yuri Milner is the Russian entrepreneur who built Mail.ru, which went public on the London Stock Exhange some months ago. So far, nothing extraordinary. But when a Russian businessman takes an ex-CEO of Lukoy Petrol to become the new CEO of his company, you can suspect that he has direct relationships with the Kremlin. And when a Russian investor takes a big stake in late stage in internet companies like Zynga, Groupon or Facebook, you should think that something new is happening.

Putting aside where the money from the Milner's Digital Sky Technologies (DST)  investment fund comes from, you can not deny that he has invested at really high valuations, even if those companies are internet treasures. The logical thing is to bet  on an IPO to make those investments profitable. Late investments are the statement that Yuri Milner has made to gain entrance into Silicon Valley's VC world. He has broken some rules that have always been there. Yuri does not want to be on the board of those companies and he is more focused on personally knowing the founders and management team of every company. It is a clear approach based on the truth of smart money, trying not to upset the balance of a great job done by the founders. With this clever approach, Yuri can win in late stage rounds like no one else: paying high valuations, without being on the board and talking, talking and talking to the founders from an entrepreneur's perspective.

But what was really surprising after having understood Milner's US investment strategy is that he also invested 6 million dollars in the startup incubator Y-Combinator (Start Fund). He did it by changing the rules of Y-Combinator and giving every startup 10 times more money than usual. So we have now Yuri Milner with a mixed investment strategy based on early and late stage companies, having disrupted the typical Silicon Valley VC approach in both cases. I believe that Mr. Milner is here to stay and this is very good for Silicon Valley. I can imagine how rich entrepreneurs from India or China could do the same thing, bringing some fresh air to the Valley. It is the sort of fresh air that cheaper money can give in a very competitive landscape. Now, the only thing that we have to track is how much money Yuri and his partners will make. Wanna make a bet?

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