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 RRE Ventures may be the best-kept secret of the East Coast venture capital community. The prestigious New York VC firm, which was established nearly 15 years ago, is well known to other investors but rarely covered by the media. When RRE is mentioned in press reports, the firm is often misidentified as being founded by James D. Robinson III, the former CEO of American Express Co. It's actually his son James D. Robinson IV (pictured, left) who co-founded RRE with Harvard Business School classmate Stuart Ellman (right) in 1994. "Jim Sr." joined the firm a year later. Over the years, RRE has raised more than $1 billion, invested in 115 companies and had 30 positive exits. "We haven't felt the need for press," says Ellman when asked why the firm's standard response to reporters has been no response. "We're happy to let other VCs grab the headlines. We don't need press to get dealflow." "I remember we talked to a reporter once, about nine years ago," smiles Robinson. "We figured maybe it was time to talk to another one." The conversation took place recently at RRE's elegant offices in midtown Manhattan, the first time Ellman and Robinson say they have granted an interview with a journalist in nearly a decade. While the co-founders are quick to point out differences in their personal styles -- Robinson's taste in office furniture, for example, is far more traditional than Ellman's -- the business school classmates share a low-key sense of humor as well as a desire for a low profile. As long-time friends, they imbue the firm with a friendliness, no doubt aided by the fact that everyone at the firm participates in profit sharing -- even receptionists and occasionally part-timers. So why are Ellman and Robinson talking to the media now? The same reason anyone else does: to get a message out. "We want to make sure the next generation of entrepreneurs knows us," answers Robinson. When it comes to the older generation, RRE couldn't be better connected. High-profile individuals from a wide range of industries and government serve as senior advisers on the firm's strategic advisory board, including Ogilvy & Mather CEO Shelly Lazarus, former Yahoo! Inc. CEO Terry Semel, former U.S. Senator from Georgia Sam Nunn and entertainment industry executive Strauss Zelnick. Now RRE is taking several steps to ensure the firm will be equally connected in the future, including a redesigned Web site. The new home page features photos and testimonials from Ron Gonen, the CEO of RecycleBank, and Kevin Pomplun, the 26-year-old CEO of SkyGrid Inc. RRE invested in both startups this year. RRE partners are also trying to raise their profiles online. Robinson, 46, maintains an active presence on Twitter, where he communicates informally with entrepreneurs, other investors and even the occasional reporter. About nine weeks ago, the firm launched a blog. It's called Five Years Too Late, "because it went live, like, five years after other VC blogs went up," jokes Robinson. Over the weekend, he posted on the similarities between what people are saying about venture capitalists today ("the VC model is broken") and what they said in 1991 ("the VC model is broken"), when he began his career in venture capital as an intern for Bill Hambrecht. Ellman, 42, also writes frequently for the blog, admitting last month, "We at RRE Ventures are terrible at public relations. We tend to want our investments to speak for themselves." In that post, Ellman tries to clear up the misconception that the firm does only later-stage enterprise and financial services deals. Sectors of focus include consumer and digital media, mobility, "green" technology, software and services, financial technology and infrastructure. "Roughly half of the deals in our latest fund are early-stage investments," writes Ellman. That fact will likely appeal more to young entrepreneurs than any PR strategy. The firm often chooses entrepreneurs with a track record, especially ones RRE has backed before such as David Riker whose Storm Exchange Inc. is his third company and the second one RRE has invested in, but the firm is not afraid of first-time founders, such as SkyGrid's Pomplun. Other recent early-stage investments include cell-phone recycler and reseller FlipSwap Inc. and semantic Web developer AdaptiveBlue. RRE's smartest technique for reaching the next generation of entrepreneurs may be its investment in Betaworks, the incubator co-founded by serial entrepreneurs John Borthwick and Andrew Weissman. Since its inception about a year ago, Betaworks has invested in nearly 20 seed-stage Web 2.0 firms, including Iminlikewithyou, founded by 28-year-old Charles Forman, and Tumblr Inc., founded by 22-year-old David Karp, both among the brightest stars of their entrepreneurial generation. - Mary Kathleen Flynn See May 2 profile of Betaworks from Tech Confidential See Oct. 31 story on New York VC firms from Tech Confidential Comments
From: Nate Westheimer,
Great article Mary. Pound for pound, RRE one of the least known VCs for its incredible impact in NYC.
Posted on:
November 17, 2008 8:27 PM
From: Stuart Ellman,
To eminent revisionist historian, Wow, do I sense some hostility? I find it surprising that you claim to know so much about our history, and yet you don't even seem to know my name. Regarding your comments.... first of all, RRE was not the original name of the firm, and second, starting a VC firm was actually the third business plan Jim and I did, not the first. Finally, virtually all of our capital under management comes from outside limited partners, and always has. Though to an outsider today it may seem easy, our early years were actually quite tough, and we have always supported ourselves with no sugar-daddy in site! If you have one handy, let us know. Feel free to espouse your points cloaked in your anonymous persona, and we will continue to try and build great companies here in nyc. By the way, THIS is why we avoid the press.
Posted on:
November 17, 2008 10:49 PM
From: Mary Kathleen Flynn,
Stuart, But of course anonymous commenters are not "the (legitimate) press". LOL Like you, I think your investments speak for themselves. :) Thanks for responding,
Posted on:
November 17, 2008 11:15 PM
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sorry, your just regurgitating RRE's revisionist history
Daddy did found the firm. ostensibly junior and his B-school pal were also founders, but c'mon, where di the capital com from? daddy.
That's why the firm is named RRE -- Robinson Robinson Ellman
Its remarkably generous and nice of daddy to let junior take the credit -- seriously -- but its false