Special Report -- Silicon Valley -- The Next Generation
JIM BREYER--Venture Capitalist, Accel Partners
Were you to catch Jim Breyer on the street near his office in Palo Alto, you might take him for just another Stanford University student. Dressed in a pair of tan chinos, dark brown tassel loafers, and a burgundy polo shirt, with jet-black hair and not a wrinkle on his face, Breyer doesn't look a day over 30. Little would you suspect that, at 36, he is one of the most successful venture capitalists in Silicon Valley.
Breyer is one of three managing partners at San Francisco-based Accel Partners, which specializes in early-stage investing in Internet, communications, and health-care-services companies. Since he came on board in 1987 at age 26, he has been responsible for some of the most successful venture capital deals ever. For instance, in 1993 Accel led a $2 million early-stage financing in Internet service provider UUNET of Fairfax, Va. In 1995, on the heels of a $10 million investment by Microsoft Corp., the company went public, and in 1996 it merged with MFS Communications in a transaction valued at $2 billion. Three months later, WorldCom Inc. in Jackson, Miss., bought MFS for $10 billion.
Another big Breyer deal involved Centillion Networks in Mountain View, Calif., a maker of equipment for local-area networking. Breyer helped raise $4.8 million to start Centillion in 1993, and another $6.3 million in 1994. In 1995, the company was sold to Santa Clara-based Bay Networks Inc. for $200 million. "Jim's making some damn sensible investments," says Rolf Selvig, director of business development at San Francisco-based VentureOne Corp., a firm that tracks the venture capital industry. "A young guy doing that stuff is impressive," Selvig adds.
Breyer specializes in managing Accel's Internet activities and investing in client-server software and data communications companies with a goal of building "next-generation companies that will lead to new industries," he says. "We try to find tremendous young entrepreneurs, help them put together their management teams, help them with business strategy, and help them understand what the right corporate partnering strategy should be." For Breyer, that means sitting on the boards of 80% of the companies in which he invests.
It all fits with what he has been doing for years. Born in New Haven, Conn., and raised near Boston by Hungarian immigrant parents, Breyer came to the West Coast as a teenager to attend Stanford. To help pay his way, he got a job in the product marketing group at Apple Computer Inc.; he got hired after writing then-CEO Steve Jobs to ask for work. "He forwarded the letter and resume on--when he could have tossed it in the trash! That's how I got into the entrepreneurial business," Breyer says with a laugh. After getting a B.S. with a double-major in computer science and economics in 1983, Breyer moved back East to work as a management consultant for McKinsey & Co., then left to get a Harvard MBA..
"My first couple of years (at Accel) the venture business was extremely slow," says Breyer. "If we sold a company for two times their money [twice what had been invested in it], that was viewed as a big success." Around 1992, Breyer became interested in the Internet and started backing a new breed of startups that few others would. A few years later, things suddenly changed: "Internet frenzy took over the world. It has been nonstop since then." Which please the universities, foundations, and pension funds that give Accel their money to invest. It currently has manages about $500 million, and its 1993 fund (of $135 million) is currently showing 100% rates of return annually, Breyer says.
Breyer spends the bulk of his 70-hour weeks seeking out new entrepreneurs and investments and going to board meetings (of eight companies). That doesn't leave him much time for his wife, Susan, 35, whom he met while in college on a junior year abroad in Florence, Italy, or for his three kids. "In these times, it's insane," says Breyer, who lives with his family in a comfortable 1925 Hillsborough home. When he's not working, his passions include fly-fishing in Colorado and listening to Wagner operas. But neither seems to compare to his work. "My hope is that there will be a dozen or so companies 10 years from now that I helped start that are each market-leading companies in the segments they're pursuing, and that they are making a very significant difference in the community. I would view that as extremely satisfying."By Gabrielle Saveri in San FranciscoReturn to top