It Looks Like Twitter's Early Investors Are Cashing Out
It's a magical time in young Twitter's life. At the end of last week, CEO Dick Costollo called some reporters over to the company's headquarters for some big announcements. Twitter's hit the 100 million user mark, even more important are tweeting (85 percent of US Senators!) and their revenue, well, they'd figure that out. It felt kind of like a high school graduation ceremony. The end of this week brings another set of big announcements. Twitter veteran and chief scientist Abdur Chowdhry has left the company, and early investors Fred Wilson and Bijan Sabet are stepping down from Twitter's board. We'd compare it to the first day of college.
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We all know that Twitter's growing up, and the motives behind the shake-up in the family are unclear. Chowdhry joined the company in 2008 when Twitter bought his company Summize and has been the paternal force in shaping key features like Search, Recommendations, and Trends. Wilson and Sabet are actually a bit more like the rich grandparents. The two seasoned venture capitalists helped Twitter onto its feet in the early days. In the company's own words, "Both saw what Twitter could become before most anyone else." Having just closed a massive round of $800 million in funding, Twitter has most definitely become something huge.
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Without many clues from Twitter itself about the motivations behind them, most people think think the departures are directly linked to that round of funding. "People familiar with all three companies tell me there's no bad blood behind the move," reports Kafka. Nicolas Carlson at Business Insider suggests that Wilson and Sabet "sit on a lot of startup boards" and may have felt "felt that they didn't have as much to offer Twitter at this stage." TechCrunch editor Erick Schonfeld makes this observation about the timing and the money element:
Twitter's $800 million funding is very much like a mini-IPO within the company in the sense that early employees and shareholders are able to cash out. When people cash out, they leave. It's just as true for shareholders as for employees. Whenever you infuse that much cash into the system, things are going to change.
We're tempted to keep extending our metaphor, dub it Twitter: The College Years and make a couple of jokes about student loans. But we'd rather point to Fred Wilson's Twitter account, where he waxed nostalgic on Friday morning. "I'm never gonna be a Phish fan," said Wilson. "I went through that stage before Phish was a band."
