The greatest risk is not taking one

Ventures

The best way to predict the future is to invent it and the second best way
is to finance it.

Berkeley Rice


The way to accelerate your success is to double your failures.

Thomas Watson

Companies Founded

Company Description Exit Founded
Governing Dynamics is a forward looking & pioneering early stage technology venture fund. We specialize in disruptive Web Services, Web Exchanges & Market Places, Clean Tech & Communications services. We empower innovation & invest in creative people who want to change the world. We combine managed investments where we develop young visionary companies with co investing with other leading funds in a more traditional VC model. Active 2008
GroundLink is a global technology leader that aggregates, manages and executes ground travel services worldwide. GroundLink's marketplace provides access to 45,000 ground travel vendors - the largest network of its kind. Our state-of-the-art technology enables retail customers, web publishers, corporations and travel agencies to easily find, price, book and pay for any ground travel worldwide!
Groundlink received an investment from The Comvest Group
Active 2008
Transit Wireless (TW) is the exclusive provider of GSM/CDMA/WiFi and other wireless services to the 7,000,000 daily commuters in the NYC subway system. As a neutral host TW operates the service on behalf of AT&T, T-Mobile, Verizon and Sprint. This $200m project was founded and funded by GD since 2004.

NY subways get wireless
Subway Wireless Options Increase
You talkin' to me? (NY subways get wireless)

Active 2004
Limores has raised over $24m to transform the $20B global ground transportation business. The company has concluded several acquisitions and has deployed a global service offering with over 6000 affiliates covering over 5000 airports and major cities worldwide. With expected 2008 revenues of over $30m and over 150,000 worldwide customers it is one of the largest operators in the world. Alex Mashinsky is the Founder and CEO as well as the largest shareholder in the company. Active 2002
Elematics was founded by Alex in 2001 and raised $23m from Warburg Pincus. The company has created the leading technology necessary to allow real time optical provisioning and network management in a multi carrier and multi vendor environment. Alex is serving as the companies Executive Chairman and its technology architect. 5x 2001
VenturiFX is an investment vehicle created by Alex Mashinsky and Jeff Parness to create leading edge telecommunications companies, it creating the ideas that accelerate the Venutri effect (FX) created by the convergence of the telecom and computer industries. VenturiFX invested the seed capital behind Elematics and Qratings. Active 2000
Comgates is the world leader in media gateways and soft switch technology, It was spun off Arbinet in 1998 and raised 13M$ in capital. Alex Mashinsky serves as a board member and advisor to the company. In Jan 2004 Comgates was sold to Telco (NYSE - BVC) 2x 1998
Arbinet - TheXchange is the world's largest electronic marketplace for communications trading. Founded by Alex Mashinsky in 1996 it raised over $240M and has over 130 employees and 1000 carriers who conduct over $500m in transactions via Arbinet. Alex served as the company CEO until Jan 2000 and is a board member and large shareholder. (nasdaq - ARBX)
+10x 1996

Failures

Most of what I have learned over the years came primary due to my failures. Looking back at the decisions I have made in both selecting ideas to work on and deciding how much to invest in them it is painful to see how many times I have repeated the same mistakes.

It all comes down to decision making and the ability to predict the future and the timing of when things will take off. It is also critical to either do it yourself or only entrust a person who is more passionate than you about the subject.

While most of the projects I failed in where good ideas I usually dramatically underestimated how long it will take for adoption to take place or how much money will be needed. I also have discounted the level of commitment and ability management have presented thinking I could solve things later.

The hardest part I had to deal with was learning to cut my losses and admit my mistakes quickly. Again and again I tried to save these ventures and paid the price of being distracted and drained of resources to only prolong the inevitable.

A focused mind is one of the most powerful forces in the universe my fortune cookie read in a recent trip to a local eatery in Manhattan and I could not agree more.

It is amazing how some lessons take 20 years to learn.

Here is a list of my most spectacular failures and misses. I review them again and again to see what else I can learn and each time as I visit them in a new context a new side of this learning process reveals itself.

2008 Business was great and all my ventures were funded and doing well, I felt invulnerable and agreed to leverage two of my ventures with debt, it turned out to be disastrous as we entered the recession and my lenders refused to be patient. I lost all my equity in one of the ventures and another got refinanced but I have learned my lesson to never put debt into early stage growth companies.

2006 I had a very bad feeling about the housing market for years and finally decided to bet against it by shorting the home builders, I lost money for all of 2006 as they continued to do well and eventually i decided to cut my losses early in 2007 just to see home builders loose over 70% of their value in the following 12 months. I did not make the connection between home builders collapse and the collapse of the banking and financial system which followed. Lesson learned - stick to your guts and beliefs if you have a track record of being right.

2004 I knew there was going to be a better way to publish new information on the internet so I wrote a patent with a new way of publishing information in real time to a list of followers. At the same time I had also started working on GroundLink and had to make a choice between the two ventures. I chose GroundLink while the other idea turned out to become Twitter.

Novacure had the opportunity to invest in this revolutionary cancer treatment process but decided it was too revolutionary. 2004
Skype I got a call from a VC asking about my opinion on a small startup doing a VOIP product, since I know the space too well I did not think they prospects were good. 2002
ICG was the seed investor in Arbinet and I got pre IPO equity but wired the money too late to participate. Stock went from $7 to $212 in 6 months. 1999
Google I was introduced to Sergey by Ester Dyson and after listening to his presentation of how a link based algorithm would provide better search results I said "who needs another search engine, we have AltaVista". 1998
Tradeum I contracted to buy software and negotiated equity upside and co-investment but I switched at the last minute to another firm. Tradeum got sold for $1.2b just one year later. 1998
ICQ Yosi Vardi offered me equity in his company as barter for bandwidth from Arbinet. I said no and ICQ was sold to AOL for $450m a mere 8 months later. 1996
Vocaltech I had the opportunity to invest in the company twice before their IPO. 1996
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