Benjamin D. Black ’97: The Accidental Venture Capitalist
Ben Black '97 was, in his words, "a hard core law geek." And yet he had what he terms "the world's shortest legal career," a three-month stint in 1998 at Latham & Watkins in San Francisco. Why did he leave?
"There was this little thing called the Internet that was happening, and the world was exploding out here in a way that was incredible," laughs Black. "If you'd stayed a lawyer in Silicon Valley in 1998, when all your twenty-six-year-old clients were making millions of dollars, you lacked imagination."
Black had imagination, and he applied it to his family business, Harris Interactive. It was a small telephone-based market research firm. But after two years of Black's efforts, it had become the leading Internet-based market research firm, earning $80 million dollars more in revenue. Black and his father took the company public in December 1999 on the NASDAQ and raised $113 million dollars, which they used to acquire their competition.
Black still needed his law skills, however, when Microsoft and AOL started blocking their emails, claiming they were spamming. "I ended up having to sue Microsoft and AOL and got them to back off," explains Black.
For the next few years, Black learned the venture capital field working for Rosewood Capital and Maveron. In 2006, he started his own firm, New Cycle Capital. One of his early projects, CitizenHawk, exemplifies how his legal training underpins his venture capital investing.
"CitizenHawk is a technology company providing digital brand protection services for major brands," says Black. "I understood the legal issues involved and why that service would be relevant to companies who would want to protect their intellectual property." Today this profitable company has hundreds of major brands as clients.
Black cites classes with professors Cynthia Farina, Robert Hillman, Peter Martin, and Pamela Samuelson (now of the University of California, Berkeley School of Law) as preparation for such issues.
Black finds his legal training to be especially relevant for his new business, Akkadian Ventures, in which he purchases high growth technology stocks in the secondary market, often from tech company founders themselves.
"Buying private company stock in the secondary market is highly technical and driven by legal considerations," says Black. "It leverages a lot of my legal background because the securities laws issues are very significant. I've done a tremendous amount of work in coming up with strategies that enable us to buy these shares that are very locked up in these complicated contractual structures."
Black calls himself "the accidental venture capitalist," because if you talked to him in law school, he would have told you he planned to be a lawyer his whole life. "You have no idea of the opportunities that are going to present themselves!" he laughs. "Do things you like with people you like. As long as you follow those two rules, good stuff is going to happen."