Yuri Milner: saving physicists from Wall Street
Aug 22, 2012
Russian tech investor Yuri Milner is generally acknowledged to have rewritten the investment rules of Silicon Valley, says Sarah Lacy on Reuters. He bet very big, very early, on companies including Facebook, Spotify, Zynga and Groupon. He is a man so driven by return on investment that even his wife describes him as “a robot”. Yet clearly Milner has a “very different side”: he’s just spent $27m setting up a foundation for fundamental physicists, “with the aim of doing nothing more than advancing our knowledge of the universe”.
Philanthropy is nothing new to Silicon Valley. Even so, this marks quite a turnaround for Milner. Having stormed onto the scene as an unknown entity in May 2009 with a whopping $200m “night raid” investment in Facebook, he swiftly emerged as “the most controversial money guy in the Valley – sought-after, feared and derided in almost equal measure”, says Wired.
Unsurprisingly, the recipients of his cash love him: probably because the modus operandi of his investment fund, Digital Sky Technologies (DST), is to pay up big for equity without seeking board representation. But to many others his success was “just too much, too fast” and his “outsiderness” was alarming. By shelling out huge sums for relatively small stakes in his favoured start-ups, he essentially shut out other venture capitalists.
Milner was born into a family of Moscow intellectuals, says Forbes. His father, Boris, was a professor specialising in American management practices. During high school Milner took classes in programming, but his real love was physics – he dropped out of a PhD at Moscow University. Milner’s introduction to business came in 1989 when the Soviet Union was crumbling: he joined a friend selling computers, eventually making 1,000 roubles a week. But his father disapproved and, in 1990, drew on his contacts to line up a scholarship at Pennsylvania’s Wharton School. He was the first non-émigré from the Soviet Union to attend.
Milner returned to Russia to join a brokerage firm, says BusinessInsider.com. It was a 1999 report by the former Morgan Stanley analyst Mary Meeker on the future of online business that convinced him to quit and start his own venture capital firm. His most noted success was Mail.ru, which he took over post-crash, and has rebuilt into Russia’s largest internet company. Since then, his investing juggernaut hasn’t stopped.
Could it all end in tears? Milner will doubtless be looking at the slashed stock market valuations of some of his Web 2.0 babies with some anxiety. But he’s unlikely to be deterred, says Reuters. Indeed, his attention is now fixed on the Chinese tech scene. If there’s one thing that defines this enigmatic Russian it is the ability “tirelessly to circle the world continuously looking for holes and gaps in the investment world to exploit”.
“If these ideas prove beautiful, but wrong, so be it”
Yuri Milner regularly invites Western technology journalists to Russia to view him in action on his home ground. Few come away disappointed. Milner’s penthouse apartment in Moscow alone is enough to impress. "The hallways are painted a wild combination of orange, purple and green. A glassed-in area... has a small grove of lemon trees," observes Parmy Olson of Forbes, who was invited to dinner. But the most striking thing is the screens – there are walls of them: airing overseas news channels, Twitter feeds, international indices… you name it. Milner’s watching pretty much 24/7. "It’s hard work bankrolling the web."
The next part of the tour often reveals him in a different light. Michael Wolff of Wired, for instance, was introduced to the parents in a small set of rooms "without a recent paint job, filled with too many tchotchkes and... books", conveying that, at heart, Milner "is just a nice Jewish boy". It’s perhaps this side that was to the fore when he dreamed up his Milner Foundation.
Every year, Milner intends to dish out $3m to the most influential thinker in fundamental physics – jump-starting things this year by stumping up for nine prize-winners, picked by himself. The beauty of the fund, he told Reuters, is how impractical it is. "Fundamental physics is like an art, more or less," says Milner. "It’s about the world and how it came into being. You can’t use it for anything... and yet it defines us as human beings."
The specialisms of this year’s winners range from cosmology to quantum computing, says The Economist. But unlike, for instance, Nobel Prize winners, the winners earn the prize for inspired theories that have not yet been experimentally verified. "If these later prove beautiful, but wrong, so be it." The idea, Milner says, is to afford the world’s best brains the financial freedom to pursue their ideas. "It may have the added benefit of keeping some imaginative physicists away from Wall Street."
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