
How Russian Tycoon Yuri Milner Bought His Way Into Silicon Valley - razin
http://www.wired.com/magazine/2011/10/mf_milner/all/1
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jakeonthemove
"It is his outsiderness that seems most irritating and even alarming" - that's
the main issue that people seem to be having with Yuri. If he was American, he
would be yet another success story, flashier than the others, but still
competent enough to have made it big.

As much as I admire the Silicon Valley investors who live in a normal house
and drive a normal car, it's Milner's choice to go all out and get some
expensive stuff if he wants - I suspect growing up in Russia, they didn't have
access to any kind of luxury items when the Union collapsed, so the desire to
get all the big houses, yachts and expensive cars is understandable.

By the way, I like it how he bought Mail.ru when it was cheap - it was
certainly a smart investment (it's now the biggest mail service in Runet, not
only Russia itself), at a time when most of them thought the fancy American
invention, the Internet, went belly up.

~~~
0x12
If his 'outsiderness' is so irritating and alarming that's just nicely dressed
up xenophobia.

And from what I've seen of it SiliconValley is not much prone to that. So why
is it different with Milner?

~~~
DilipJ
The Valley doesn't care about a person's ethnicity, as long as they generated
their wealth through legitimate means. Milner, on the other hand, is nothing
more than a frontman for Alisher Usmanov, who basically accrued everything
through wholescale theft of state resources. Basically, Milner is a crook, and
if there was any justice in the world he and Usmanov would be in jail for what
they have done. But there isn't, and there are people in the Valley who are
willing to overlook ethics if you have enough money. The fact that Milner is
now working with YC is a sad testament to that fact.

~~~
pg
VCs are not so high minded that they're offended by who his LPs are, believe
me. The reason VCs don't like Yuri is that he is disturbing the cosy world
they formerly inhabited by offering more founder friendly terms.

So morally the situation is not as simple as your comment implies.

~~~
chunkybacon
Actually, it would seem to be just as simple as he implies. VCs in the valley
care only about money and don't give a hoot about morality. You haven't
debated the fact that Milner is linked to the looting of state resources;
you've simply said that anyone else would also take his money if they could.

Makes all you VCs and Angels in the Valley seem like dogs fighting over a
doggie biscuit -- or in this case, the looted flesh and bones of the Russian
people.

~~~
pg
Let me be more precise. When I said the situation was not as simple as his
comment implied, I meant that even if Yuri's money was tainted in some way, it
was being used as a counterweight to another bad thing.

~~~
DilipJ
"The reason VCs don't like Yuri is that he is disturbing the cosy world they
formerly inhabited by offering more founder friendly terms."

I greatly respect and admire you pg, and god knows you're far more intelligent
than I am, but surely you can't be so naive as to think that Milner is doing
what he is doing out of some altruism for founders?

He is spending outlandish amounts on startups for the same reason Abramovich
spends hundreds of millions on yachts, why the Sultan of Brunei spends
millions on cars, and why the Saudi princes spend millions on trips to the
Riviera. Because he never worked hard for the money, and so he doesn't care
about throwing it around.

When a man works hard, he is loathe to spend it carelessly, because he knows
the sacrifice in time and effort it took to acquire the money. In the words of
the great Milton Friedman: "Nobody spends somebody else's money as carefully
as he spends his own". This applies not only to government officials but to
the criminal element as well, from hoodlums to ponzi schemers and everything
in between.

People like Milner and others associated with Russian oligarchs spend lavishly
because the money they have came with no sacrifice on their part. The
sacrifice came from all those miners working in subzero temperatures in the
Kazakh steppe for kopeks a day, their bodies broken down prematurely, with the
share of wealth that was promised to them stolen away. And instead of those
who betrayed them being brought to justice, they instead depart to the West
where they are greeted with applause by those who mistake cunningness with
intelligence.

~~~
jorgeortiz85
Pg is implying that Yuri's LPs are no more questionable than the LPs of the
top VC firms in the Valley. They've all taken dubious money.

~~~
jakeweineberg
From reading this post, I am surprised that this story is not on top of the
Hacker News....anyway, i agree 100% with what the above comment says....PG and
Hacker News sold out and sold their Souls to Yuri and all the corrupt Souls
that Digital Sky Technologies (DST) is associated with. Good Going Paul.

------
pg
If there's one mistake this story makes, it's in trying to come up with
complicated theories about why Yuri does well. He's simply smart. That's what
DST has in common with Andreessen Horowitz, though they have little else in
common.

~~~
mapgrep
Come now, Paul. Yes, Yuri is smart. But he also has huge sacks of money to
throw around, most of which comes from oligarch Alisher Usmanov. Wolff
confirms here for the first time (I believe) that "Milner has created a
separate fund to invest in international—and especially American—Internet
companies, with Usmanov taking the biggest stake."

And we've yet to see any sort of track record for the piles of money Milner
throws around, at least the big new money he is spending in America. In what
sense is he "successful?"

It's kind of sad, to me at least, the extent to which a sort of amorality has
really taken hold in Silicon Valley. It's nice that he's helped your
investments out, Paul, but where does Yuri's money come from? Have you looked
into him and Usmanov? I mean, the sad thing about Yuri Milner to me isn't that
he's an ostentatious outsider, it's that he fits in so darn well in Silicon
Valley. I wish this was the sort of place that looked completely alien to
someone from Moscow or Wall Street. Every year, it seems that's less and less
the case, at least in terms of culture.

~~~
pg
_In what sense is he "successful?"_

Financially, in the same sense Mark Zuckerberg is.

~~~
vizzah
I though Zuckerberg's success is in the creation, not in the bank balance?
Really, 'financial success' and life's success (for achieving something
worthwhile for the history of this planet) must be two absolutely different
achievements..

~~~
pg
That's why I qualified my answer by with "financially."

That is the type of success mapgrep is asking about: his returns as an
investor.

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vizzah
The wealth in hands of all these xUSSR oligarchs (Usmanov etc) was once a
social wealth of all Soviet people. It is nice to see this wealth is now being
converted 'back to social'. Our Facebook accounts are supposedly worth $100+
already, so it seems like a very clever plot to pay these money back to where
they belong. Let's hope Mark will provide payouts for those choosing to close
their accounts.

~~~
pwang
> so it seems like a very clever plot to pay these money back to where they
> belong

Um... you seriously believe this?

~~~
vizzah
of course it was sarcastic, how could a sane person believe in that? you scare
me with such question.

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adlep
pg is extremely naive if he thinks the this guy's money is not tainted.
Actually, it does not take a genius to figure this out. IT IT IMPOSSIBLE to
make that kind of money in Russia by playing according to the rules.

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alexro
Why not anybody thought that what Milner does is he paves the road to even
more money coming from legit and not-so-legit investments from Russian
oligarchs. Once Milner gets settled in the SV and proves his operations are
successful, then Russian money will start flowing in in amounts that's hard to
comprehend.

Why is this desirable for oligarchs? Simple: businesses in Russia are
profoundly insecure - remember Khodorkovsky? So, Milner will find a great
amount of willing investors among the second-tier oligarchs once he's ready to
start doing money heavy lifting.

And when you pave the road that will go "pay-to-pass" you can spend few
unnecessarily billions.

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krookoo
Sounds like money laundering.

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budu3
I wonder if it is possible for a YC startup to take Andreessen-Horowitz $50000
investment and pass on Milner's investment.

~~~
0x12
Sure it is. But nobody did.

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dustineichler
The story angle is wrong. Why would someone like him care if he bought into
anything, when he can buy everything. It reads like an insecure fable which I
doubt.

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yonasb
The man is making people's dreams come true and taking chances on young and
hungry entrepreneurs, legally. Some of you make it sound as if he's a
murderer. Leave him alone and let him and all the companies he's funding be
great.

