Barclays Global Investors lost another prominent staffer to the siren song of the Internet, but in a different direction.
Frederick Grauer was the co-chairman of indexing giant BGI in San Francisco until he resigned in spring 1998.
During the next year he developed a venture that sells Oriental carpets over the Internet. And during the funding stage of that venture, Mr. Grauer met Ron Conway of Angel Investors LP, Redwood City, Calif.
Their thinking meshed and Mr. Grauer since has become a general partner in the firm.
Mr. Grauer brings years of business strategy, portfolio management and operational experience to 11-month-old Angel, which provides seed money to Internet startups.
The firm matches the new ventures with the money and intellectual capital of high-profile, limited partners, all wealthy Internet entrepreneurs themselves.
In its first year, Angel invested its two funds, with more than $150 million in capital, in 150 startups, a feat that would take two years in traditional venture capital firms, Mr. Grauer said.
"We're really a high-touch marketing business, a manager of networks of people and ideas, rather than investment managers," he said. "This is really the opposite of what I used to do. I moved from the very large, very liquid world of securities, where you were very restricted about what kind of information was public or private, to a world of very illiquid private equity without any securitization at all.
"It was a move from a world where it was very difficult to generate any alpha on investments to a world where it's very easy to create alpha."
Mr. Grauer loves the change. "This is much more intense than anything I did at the old place. The pace, everything, is so exciting - living on the edge of the envelope. I wasn't know as a shrinking violet in the past business. I went at it very aggressively, but there is so much more opportunity and demand at this end of the spectrum."
