SAN FRANCISCO (03/11/2000) - Alan G. Spoon, president and COO at the Washington Post Co., is leaving one of the country's most powerful media positions to become a venture capitalist.
Spoon will join Polaris Venture Partners, a Waltham, Mass.-based firm that was established in 1996. Polaris has provided early financing for a host of Internet companies, including Akamai Technologies and Allaire. The allure of venture investing, Spoon says, is what drew him away from a company where he has worked since 1982.
"This is a new chapter where I can focus on one of the threads that was most exciting in my job,'' he said in an interview Friday morning, referring to his duties overseeing the Post's investments in Internet-related companies. That thread, he added, "has become a six-lane highway." Spoon is the latest in a series of media executives to jump from established businesses to invest in the new economy. Late last year Tom Unterman left his job as executive VP and CFO at Times Mirror to establish TMCT Ventures, which manages a $550 million fund.
Earlier this month Steven Rattner, the deputy chairman at the investment bank Lazard Frere who specialized in media mergers and acquisitions, left to set up a $1 billion private equity fund. And Frank Biondi Jr. left a job at Universal Studios to start his own venture firm, Waterview Partners, with a fund of $200 million. But Spoon, 48, a graduate of MIT and of Harvard Law School, was flirting with venture capital even before it was trendy. He was one of the eight original investors in Polaris' first fund, and is a member of a Washington, D.C., group of angel investors known as the Capital Investors.
Other members of Capital include AOL Chairman Steve Case and Teligent CEO Alex Mandl.
Spoon's interest in technology has been strong for years. He pushed the Post to invest in cellular communications, technology publications and a range of Net companies - including Junglee, Internet Broadcasting System and BrassRing. The Post's Internet investments totaled some $85 million in 1999. Indeed, Donald E.
Graham, the Post's chairman and CEO, refers to Spoon as "Mr. Digital." "I hate losing Alan, but we're lucky to have had him with us for 18 years," Graham said in a statement released this morning. "The shape of the Washington Post Company today has a great deal to do with Alan's judgment and his choices of people."
In addition to the Washington Post newspaper, the company owns Newsweek magazine, television stations, Kaplan Educational Centers and other newspapers. Critics may ask whether Spoon's departure signals a desire to leave a slower-moving legacy company for a faster-paced new economy career.
While the Post has adapted to the Net more quickly than many other news organizations have, its stock was flat for much of last year. Spoon, however, dismissed such speculation.
Spoon's decision provides a big boost for Polaris, a young firm that wants to raise its profile. The firm, which says its last round of investments generated a return of more than 3,000 percent, just finished raising an $800 million fund. In January Polaris added three general partners to its core group of three founders. One of its partners, George H. Conrades, now serves as chairman and chief executive of Akamai, an Internet software company in which Polaris invested $8 million.
That stake is now worth more than $1 billion. Jonathan Flint, a Polaris general partner and founder, says the firm has done other successful investments besides Akamai, including Wrenchead, Classifieds2000 (which was recently acquired by Excite), and Exchange.com, which Amazon.com acquired for $200 million. Flint predicts that Spoon will fit in easily and will provide valuable experience. "Alan is not only a media executive at the peak of his career, but he's successfully managed an Internet portfolio," Flint says.
Spoon, who joined the Post in 1982, says the decision to leave was not about the money. He noted that if the market were to shift, he and other VCs would no longer find the business to be so lucrative. Besides, he wasn't struggling at the Post. In fiscal year 1998 his salary and bonus amounted to roughly $1.2 million, and he exercised options valued at $1.5 million. Spoon will continue as a consultant to the Post, and expects to start the new job in April. "I've had 18 fantastic years with one of the great companies in America," he said. "I was ready for a change."