An Interview With Alan Patricof

Alan Patricof

Image: Jamie Rector/Bloomberg News/Landov

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Is the pioneering venture capitalist Alan Patricof trying to be the grand old man of new media? As the chairman of Greycroft Partners—the small ($75 million) venture capital firm he started in 2005 after leaving Apax, the $30 billion behemoth he co-founded nearly four decades ago—the 73-year-old Patricof is again on the cutting edge.

Patricof, who had the insight or good luck to get in on the ground floor of Apple and America Online, today presides over an investment portfolio of such digital startups and young companies as PaidContent (paidcontent.org), an information and media enterprise; Takkle (takkle.com), the first online social network for sports fans; and the Huffington Post, the influential news site started by the power pundit Arianna Huffington. Some of these companies’ services and products are so technical that Patricof acknowledges even he doesn’t fully understand all of them. But profits have already begun to roll in: Greycroft’s modest investment—between $500,000 and $3 million—in Pump Audio paid off with a 700 percent return in June, when the digital-music-licensing company was sold to Getty Images for $42 million.

“I can be very dramatic and poetic and say I hope we find a Facebook or a Google,” Patricof told Portfolio.com in an exclusive interview. “I think that’s looking for a needle in a haystack, but it’s certainly possible. That’s the dream that stays alive when you’re in this business, of finding that unique company that does have that potential for growth.”

Sitting in his glass-walled office on the 53rd floor of Citigroup Center, Patricof also discussed his passion for encouraging entrepreneurship in Africa, his labors as a top fundraiser for the presidential campaign of Hillary Clinton, his habit of riding subways and flying commercial, and his claim that he’s having fun. “Oh, God, yes. I wouldn’t get here at 6:30 or 7 in the morning and stay until 7 at night if I didn’t enjoy it,” he said.

Lloyd Grove: So you just returned from Egypt. When did you get back?

Alan Patricof: Yesterday afternoon. I was in Alexandria. I was there for the first award of the Mo Ibrahim prize for good governance. It was established by a guy named Mo Ibrahim, who was one of the leading entrepreneurs in Africa and who sold his company Celtel last year to another cellular company in the Middle East for $3 billion. And he personally came away with a billion dollars, and now he’s doing some good things to give back, in effect.

L.G.: He’s an Egyptian?

A.P.: He’s actually a Sudanese who lives in London. So he’s created a fund for investing in Africa again, and he’s created this prize. It’s going to be given annually to the leading African statesmen, I guess primarily presidents, who retire democratically from office and who have left behind a legacy that is outstanding.

L.G.: Beyond a Swiss bank account.

A.P.: Exactly. It’s to avoid Swiss bank accounts. And the chairwoman of the prize committee is Mary Robinson, the former president of Ireland, and [former U.N. secretary general] Kofi Annan is on the committee. I’m not on the committee, but I’m a good friend of Mo. I’ve known him because of my interest in Africa and entrepreneurial activities in Africa. I met him four or five years ago, and we’ve had similar interests in trying to develop an entrepreneurial culture in Africa.

L.G.: You’ve been focused on that for about five years. What got you into it?

A.P.: Well, I decided to turn over the management of Apax, which I started in December 1969 or January 1970, however you want to count. And when I decided to turn it over to the other partners about five years ago, I wanted to kind of trifurcate my life—and continue to do venture capital investing in some form, spend part of my time giving back in the developing world, if it was applicable, and then a small part of my time is spent in politics, helping Democratic candidates get elected.

L.G.: Is it mostly Africa?

A.P.: No, I’ve traveled a lot for the International Financial Corp., which is part of the World Bank. I have been an adviser for several years, but I’ve also been on several commissions, and I’ve decided to spend my own personal philanthropy with organizations that are working in developing countries and entrepreneurial activities. And I’ve just recently joined the Millennium Challenge, which is the new foreign-aid program of the U.S. government, as a Democratic nominee.

L.G.: Why developing countries?

A.P.: Because in my experience, in my life, I thought I could be more productive and more involved here than in other areas. Where else? I mean, I’ve done Europe; I’ve been involved in Japan. This is pro bono work. I’m not doing this for profit. And it just intrigued me. I guess I’ve always been interested in the developing world. In fact, when I originally got out of Ohio State, I nearly went to work for the Agency for International Development in Latin America.

L.G.: What diverted you?

A.P.: I guess I decided that I’d go into the financial world and Wall Street instead.

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