The move is part of a shift from a primarily venture effort to a software-driven capital platform
Social Capital, the Silicon Valley investment firm founded by Chamath Palihapitiya, has hired Marc Mezvinsky as its vice chairman. The hiring of the investment banker and hedge fund founder is part of a wider effort by Social Capital to morph itself well beyond its venture roots.
Currently, Social Capital has been making venture and seed investments, as well as some public ones, and also has a unit devoted to incubating startups. It has also been developing a software-based product-market fit platform called 8-ball, to do the quantitative part of due diligence for possible investments.
But, as part of a longer term master plan, it has been exploring a wide range of other financial products to support its companies across their lifecycle, said Palihapitiya in an interview with Mezvinsky earlier this week.
“Venture is good, but venture firms are not really well built to make successful companies,” he said. “We want look less like an investment firm and more like a company with capital as a service.”
Thus, enter Mezvinsky, who has a deep background in the financial arena. In his new job, he will quarterback the coordination of changes at Social Capital and also focus it more on its new capital efforts.
A derivatives specialist who has been focused on emerging markets strategies, Mezvinsky has been a longtime investment exec, working at Goldman Sachs, 3G Capital and as founder of Eaglevale Partners. (And, yes, he’s the Marc Mezvinsky who is married to Chelsea Clinton, which means, Hillary Clinton is indeed his mother-in-law.)
Mezvinsky said that while he liked working in the broader market, he also felt that is was time to shift toward a focus on tech and its possibilities as its impact continues to grow.
“I wanted to be on the right side of history,” said Mezvinsky, talking about the efforts to create at Social Capital a kind of California version of Blackstone, the New York private equity firm that has vast efforts all over the capital landscape. “We can plant a stake on the West coast that understands the giant opportunity ahead.”
“Mega-scale” is a word that Palihapitiya used a lot in the interview, although he declined to comment on the kind of fundraising such an endeavor needed to succeed. It’s a lot obviously — tens of billions, really. He also added that venture ambitions need to grow, as there is more opportunity in using machine learning and other computing to make investing decisions better.
“I know everyone here talks about reinventing venture capital, but it never really happens,” said Palihapitiya, the former Facebook exec, who is well known in tech for his outspoken views on, well, just about everything (see below!). “Why not do exactly what we tell our startups to do and disrupt and innovate?”
Mezvinsky will work out of a new office in New York, but will be in Silicon Valley regularly, where there are about 40 employees in Palo Alto. There are also plans to open a unit in London.
Here is a little taste of Palihapitiya’s thoughts on the VC world and more, and we are now booking a new podcast session for him and Mezvinsky soon to get some more of Chamath unplugged: