|Michael Ovitz at Allen & Co's Annual Sun Valley Conference|
Allen took over the firm in 2002 following the dot-com bubble burst. "The same year, talent agent Michael Ovitz, a family friend, connected him to Marc Andreessen and partner Ben Horowitz (now of VC firm Andreessen Horowitz), who were then running online-storage company Loudcloud Inc. At Mr. Ovitz's suggestion, they stopped at Allen's glitzy Fifth Avenue headquarters, which housed an art collection and a fully staffed kitchen. Mr. Allen surprised his guests. 'He said, 'We're thinking about diving into tech,' and I remember being just stunned,' Mr. Andreessen recalled. Other banks were trimming tech practices. 'Tech was so dead, and everybody was so miserable.'"
Commitment, loyalty and belief in nascent companies has proven a very successful business model for the firm. By arranging early private financing and investing rounds, Allen & Co. has often been repaid with a role in a later IPO. "Allen helped arrange large private investments in Zynga, Groupon and Coupons.com, each of which gave Allen & Co. a role in its IPO." Similarly, "Allen's Facebook ties date to 2005, when Peter Thiel, Facebook's first outside investor, introduced Mr. Allen to founder and Chief Executive Mark Zuckerberg. At the time, Facebook was a social network for college students and had little revenue. Seven years later, Allen & Co. landed a spot in Facebook's IPO."
One of the more unique aspects of the firm is the method by which it creates and facilitates networking in the tech world. Rather than conventional office meetings, "each March, Allen & Co. invites investors and executives to a resort near Tucson, Ariz., to network. Allen & Co. also hosts a well-known media conference each July in Sun Valley, Idaho, where attendees have included Ovitz, Warren Buffett, the billionaire investor; Rupert Murdoch, chairman of News Corp; and former New York City mayor Michael Bloomberg... Mr. Allen also offers access to two exclusive conferences and expense-paid trips to the family's sprawling ranch near Yellowstone National Park to lure tech's rising stars."
Read the entire Marketwatch article, Allen & Co. Flourishes as a Tech Deal Maker