Sometimes New York City feels like a small town. So it is when Ben Lerer arrives to dinner on a recent Tuesday night at Empellón Taqueria in the West Village. Sitting at one table is a girl he met in Ibiza a few summers back. At the next is one of the founders of Birchbox, one of many companies backed by the venture-capital fund Ben runs with his father, Ken. And behind the bar, mixing a pair of complimentary lageritas, is one of the restaurant’s proprietors, who also happens to be “high-school best friends with my best friend from college,” explains Ben, the rumpled co-founder of bro site Thrillist, who could still, at 32, pass as a University of Pennsylvania undergraduate.
He plops down across from his father, who is peering dubiously at the cloudy drink from behind a silver lock of hair. “Beer-based cocktails are more your sort of thing,” he tells his son before taking a tentative sip. “It’s good,” he reports.
“You stay close to your friends and the people you trust,” Ben continues. “The circle gets bigger as time goes on, but that’s generally our philosophy.”
His scruffiness keeps this from seeming Godfatherly, but the Lerers are a little Mafia-esque. Their company seems to have had a hand in every buzzed-about start-up in New York: apparel company Everlane, 3-D printer MakerBot, lyrics-decipherer Rap Genius. “There are 185 of them,” says Ben. “I could probably name 100.”
A man in a snug black T-shirt materializes. The Lerers are helping him launch a start-up. “Did you get my invitation?” he asks. “I sent it by Paperless Post. You guys own a stake in that, right? Those bastards charged me.” He laughs. “They suckered me into it. I’d invested like 30 minutes making the nicest invitation, and then it was like, ‘This is $50.’ Then you guys probably got an alert on your phone and were like, Yessss.”
“I got like six cents from that,” Ken says, then raises his eyebrows as a shriek from a nearby table pierces the air. “I feel like I’m having dinner with these women,” he says mildly.
This place is definitely more his son’s sort of thing: Ken’s idea had been to go uptown to support the restaurant owned by his friend, former Time Warner chairman Richard Parsons. The Lerers would likely have run into the same number of people, albeit from a different crowd. While the younger Lerer’s Instagram feed features his Ivy-league-bred, zany-hat-wearing, luxury-loft-living peers, the elder Lerer travels in more refined circles. Best friends include former clients of his corporate PR firm and cohorts from his days as a flack for AOL, where he was tasked with talking up the Time Warner merger he knew would be a disaster. “It was horrific,” he says. It worked out for Lerer, though. He sold his stock at the height of the market for $40 million, then used a small fraction of it to finance the Huffington Post, which he would later sell to AOL, of all places, for $315 million.
His main partner, the Huffington Post’s eponymous Arianna, is notorious for her charm, but her quieter partner can be just as beguiling. Within fifteen minutes of meeting me, he’s extracted the name of my infant son and is promising to take him to a Mets game when he’s old enough (the Lerers own a small stake in the team). Though less visible, Lerer was regarded by many, including his son, to be pivotal to the site. “A lot of people get credit for being very smart and doing great stuff, and I think he’s way better than he gets credit for,” says Ben.
“That’s bullshit,” Ken scoffs.
Ben glares at his father. “You want me to really say some stuff? I can say some stuff.”
“No, no,” Ken says. “I was at the Huffington Post, and I was doing investment for the family. Then Foursquare raised money. I called Benjamin, and I was like, ‘This sucks, I wish I had known about this.’ He said, ‘You’re an idiot, I know those guys, why didn’t you call me?’ And I said, ‘All right, we’re doing a fund.’ ”
“I think you just wanted to hang out more,” says Ben.
“Well, that’s true,” admits Ken. “But I also thought it was a good business. Benjamin lives with the men and women who are creating these companies, socially, in a way that I never would.” Ben knew the people who had the ideas; Ken knew the people who had the money—and had the public-relations savvy necessary to excel in a market in which value is determined almost entirely by buzz.
After the Huffington Post sold to AOL, Ken had a lot more time—and money—to devote to Lerer Ventures. They picked up stakes in HuffPo alum Jonah Perretti’s BuzzFeed (of which Ken became chairman), Business Insider (helmed by Henry Blodget, a friend), and Warby Parker (whose founders are UPenn alums). He already had a stake in gaming company OMGPop.
“We got lucky there,” says Ken. “Because it was a stupid-ass company until they did that app Draw That.”
“Draw Something,” corrects Ben.
At the height of Draw Something’s popularity, Zynga bought OMGPop for $180 million, a decision it regretted once the craze was over and it apparently reverted to being a stupid-ass company; it was dissolved last summer. “Timing is the key to life,” says Ken, who earned 25 times his investment on the sale. “Timing is luck and brain and guts.”
I ask if he thinks he sold the Huffington Post at the right time. Some of his investors thought they could have gotten $500 million. “What?” he shouts over the restaurant’s booming soundtrack.
“You heard her,” Ben says.
“I just needed a little more time to prepare an answer!” his father says. “I sold it at the right time,” he affirms. “The right year, the right month.” He pauses. “Maybe not the right day.”
“I’m a firm believer in not waiting until things crash,” he says. The Huffington Post hasn’t exactly crashed. “It’s clearly a different site from when we launched it,” Lerer says carefully. His relationship with Huffington reportedly deteriorated toward the end of their partnership. “I’m not saying it’s better or worse, but it’s different.”
Filling the media void for him currently is Nowthisnews.com, which distills the news of the day into short videos. He has big plans for the site (which will probably have been announced by the time this is published). And this week marks the launch of another site close to his heart: the Dodo, an animal-rights-centered website from the former editor of Salon Kerry Lauerman and another member of the Lerer Circle of Trust—his daughter, Isabel, a Columbia Ph.D. student who studies human-and-animal interaction and whose passions prompted Ken to give up meat, though “prompted is too polite a verb,” says Ken.
“She bullied him into it,” Ben interjects. “Her boyfriend is only ever allowed to eat meat on the weekends,” he says in horror. “I ordered bacon at lunch, and she thought I was doing it to spite her.” The Dodo will perhaps not take such a hard line. “It’s about animal rights, but not in-your-face,” says Ken.
Sure, he admits, part of the reason that Lerer Ventures is backing it is so they can all hang out. But then again: “The New York Times has an animal-rights story, broadly defined, on the front page every three weeks,” he says, chewing a tortilla. “I think we will have tons of advertisers. I think,” he adds, “it will make a lot of money.”
“Timing is the key”
Lerer Ventures’ five biggest exits of 2013:
MakerBot sold to Stratasys:
Bluefin Labs sold to Twitter:
About $90 million
Pulse sold to LinkedIn:
Qwiki sold to Yahoo:
About $50 million
Cue sold to Apple:
About $40 million
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