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Seed Capital From Angel Investors: George Zachary, General Partner, Charles River Ventures (Part 1)

Posted on Saturday, Sep 25th 2010

By guest author Irina Patterson

This is the twenty-fifth interview in our series on financing for entrepreneurs. I am talking to George Zachary, general partner of Charles River Ventures, one of the nation’s oldest early-stage venture capital firms.

CRV invests in the data communications and software & services sectors and provides entrepreneurs with access to a combination of financial backing, start-up operations expertise, and strategic business services. Over the past ten years, CRV’s funds have been ranked among the industry’s top performers. George’s personal focus is consumer Internet. He is based in Menlo Park, California.

Irina: Hi, George. Why don’t we start briefly with your background?

George: I’m about forty-four years old and I grew up in New York City. My parents emigrated to the United States from Greece. I went to MIT and studied computer science, and I went to the MIT business school as an undergrad as well.

I worked for Apple Computer while I was in college, both remotely and here in California on what was to become the Macintosh II. After graduating I did a bit of consulting for about a year and a half, which was intellectually interesting, but I wasn’t excited about the work.

I moved to Silicon Valley in 1989 and joined a group of friends in a company that we put together called CATS Software. We were an enterprise software company focused on financial services. We offered front- and back-office [software] for people to trade and analyze trades for derivative instruments, which back then was considered a fairly new innovation and which now looks like a great way to create a disaster.

CATS Software was acquired after it went public. We were acquired by SunGard, which is a publicly traded enterprise software company. I went on to another venture backed company — actually, at the time I joined the other co-founders at CATS we had no venture backing, but we ended up getting it after we scaled up a bit.

The other venture-backed company I joined was called VPL Research. Four other people and I were there, and we coined to term “virtual reality.” I’m not kidding. We built all the original virtual reality equipment, hardware, and software. After about three of four years we were acquired by Sun Microsystems.

I went to Silicon Graphics, where I started and ran the Nintendo 64 business. We did all the development for Nintendo and then Nintendo 64, from vision to implementation, to delivery with both the hardware and the software, at both the chip and system levels for Nintendo.

In 1995 I was recruited by Mohr Davidow Ventures. I was there for about seven years. I had the highest return out of anyone in the history of Morh Davidow in terms of IRR.

I was the lead co-investor in a bunch of companies that went public, including Critical Path, Accrue Software , and Shutterfly, where I was also one of the four co-founders. There were a couple of other companies as well at the time. After that I ended up joining Charles River Ventures because I wanted to focus on the consumer and Morh Davidow did not want to do so.

I ended up leading our investments — I’m one of the original investors in Twitter, the original and the biggest investor for a company called Yammer, and one of the biggest investors in a company called MillennialMedia, which is the biggest mobile ad networks and is headquartered on the East Coast. I led our investment in a company called Scribd, which is a spoken document sharing site.

About four years ago, I started our seed program through which we seed invested in companies. It was originally called QuickStart and it was originally focused on $250,000 investments. Now we do a slightly different version where we make approximately $25,000 to $100,000 seed investments in startups. We’re doing about two per month right now.

Irina: You said you were doing consulting early on. What was your focus?

George: Right after I graduated from MIT, I was building large-scale mathematical models for two different companies. One was Shell Canada, where I was building a mathematical model for oil and gas discovery, and I built an architecture and information system for them to be able to trigger — to kind of connect explorations to oil refineries which they had not built before, and they used that information system in scenario planning. In the late 1980s and early 1990s, Royal Dutch Shell — Shell Canada was a part of Royal Dutch Shell – was probably the most advanced company in the world for scenario planning. So, I built an information system to help them specifically in Canada. Their headquarters were in Calgary. I remember it was the coldest winter of my life.

Irina: Being a Russian myself, I know what you mean [laughing].

This segment is part 1 in the series : Seed Capital From Angel Investors: George Zachary, General Partner, Charles River Ventures
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Great interview, myself as an entrepreneur all my life I find it most rewarding and frustrating but I would not do it any other way. Dealing with investors can be difficult but if you listen you will learn what they want and need.

Robert Woltz Saturday, September 25, 2010 at 11:07 AM PT

Trying to get a business up and running can be a real nightmare. I am glad there are people out there who are willing to take risk when local government who spout about helping usually end up making things impossible. Really great article, exactly what I was looking for, thanks. I have to agree, excellent comments. Keep them coming.

John Wednesday, August 22, 2012 at 2:04 AM PT