The sale of Diapers.com to Amazon for $540 million was a grand slam in the venture capital world. So it was fitting that Accel’s Sameer Ghandi presented founders Marc Lore and Vinit Bharara with autographed Yankees jerseys.
“These guys started their first online business in 1999, not exactly the best timing,” Ghandi said last night at the Soho House, where Accel was throwing a party to celebrate the expansion of its presence in New York. “The second time around they decided to compete on low margin items with giants like Amazon and Walmart, no easy task.”
Lore accepted a signed Derek Jeter jersey and recounted the timing of Accel’s investment. “When they approached us it was early 2008 and we had gotten a few terms sheets from other firms already. Then the DOW decided to drop 500 point for a few days in a row and a lot of the other offers on the table disappeared pretty quick.”
Accel, which has been around since 1983, built its reputation long ago. But it was also an early investor in the current crop of internet stars, getting in well ahead of most on Facebook, a move that cemented its relevance at a time when many traditional VCs were playing catch up in social.
For a lot of the entrepreneurs in the room, Accel’s move was a reminder of how much things had changed in the city over the past decade. “I can’t count all the times big West Coast VCs told me they would be happy to fund me, if I moved out to California of course,” said Steven Krein, co-founder and CEO of Organized Wisdom. Over the last three years Accel has invested in 15 New York companies, including Etsy, LooseCubes and Complex Media.
Currently Accel is operating out of 11th and Broadway, but partner Theresia Gouw Ranzetta promised the sweaty crowd that the next event would be from their roofdeck atop the Googleplex this summer. Medialets CEO Eric Litman mused that there was very little travelling left for him to do. “I live just at the southern end of the Highline, so my morning commute is up and along that track, then down the stairs at 16th to get to our office.” If Accel sets up shop at the old Port Authority Building on 111 8th Ave, Litman won’t have to change his route to take a meeting.
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