Twitter’s stock exchange listing has seen lead law firm Wilson Sonsini generate another major-league name to its marquee, just as the listing created a value of over $31 billion in its first day’s listing, including creating major new wealth for investor Suhail Rizvi.
The New York Times reported that Rizvi’s 15.6 per cent stake in Twitter was worth close to $4 billion after the end of trading on Twitter’s first day.
Using a web of connections in the tech industry and in finance, as well as a hearty dose of good timing, he brought many prominent names in at the ground floor, including the Saudi prince and some of JPMorgan’s wealthiest clients.
Twitter’s successful opening also made gushing winners out of the usual suspects, including its co-founders Jack Dorsey and Evan Williams and a spate of more traditional tech investors. But Mr. Rizvi’s rise illustrates how a new tech investor class with deep Wall Street connections is carving new paths into the unfamiliar and insular terrain of Silicon Valley.
Traditionally, stalwart venture capital firms like Kleiner Perkins Caufield & Byers and Accel Partners use their location in the Valley and their sizable funds to buy a piece of a start-up and have a hand in the company’s direction. And Benchmark Capital and Spark Capital, two such companies, did get sizable pieces of Twitter.
But Mr. Rizvi and others like him have formed a network of investors, including prominent mutual fund companies like Fidelity, T. Rowe Price and BlackRock, that sometimes have even deeper pockets and a willingness to buy smaller pieces and assume no management control.
Many start-ups say they value the new source of hands-off capital from these investors outside Silicon Valley’s palace intrigue. Aaref Hilaly, a venture capitalist at Sequoia Capital, a top venture company in the Valley, said the new type of investors could offer entrepreneurs some breathing room.
The entrepreneurs “don’t have to have all their assets tied up in a company, which is inherently risky,” he said. “It lets them have their cake and eat it too.”
Still, some of Mr. Rizvi’s counterparts on Sand Hill Road, the epicenter of venture capital, say the influx of new money will drive up start-up valuations in what is already a crowded part of the market.
For law firms and investors alike, the float of Twitter has reinvigorted the new-age, tech economy like few others.