By Ronald Grover and Gerry Shih
LOS ANGELES/ SAN FRANCISCO, Oct 3 (Reuters) - When Twitter
goes public in coming weeks, one of the biggest winners will be
a 47-year-old financier who guards his secrecy so zealously that
he employs a person to take down his Wikipedia entry and scrub
his picture from the Internet.
Over the past two years, Suhail Rizvi, founder of New York
private equity firm Rizvi Traverse Management, has quietly
amassed a stake of more than 15 percent in the microblogging
phenomenon for himself and his investors at a cost of more than
$1 billion, according to three people with knowledge of his
The previously unknown extent of Rizvi's involvement in
Twitter comes as the eight-year-old company prepares for Silicon
Valley's biggest coming-out-party since Facebook Inc in
Twitter will soon file its IPO registration document with
U.S. securities regulators, revealing the identities of top
shareholders. Because the shares Rizvi purchased are distributed
among investors via multiple vehicles, it is unclear whether the
filing will list Rizvi or his individual investors. The size of
his personal stake has not been disclosed.
People with direct knowledge of his investment activities
say that Rizvi, backed by Chris Sacca, a former Google executive
and Twitter investor, were instrumental in attracting large
private investors to the microblogging site, serving as
matchmaker between the company's founders and global financiers
from Wall Street to Riyadh.
Rizvi declined to comment for this article. Sacca, a
longtime friend, gave him an entree into tech investing in 2011
- when Twitter was still struggling to make money - and from
there, Rizvi scored stakes in some of the most sought-after
Internet startups, from Facebook Inc before it went
public to Square and Flipboard.
Rizvi's string of tech deals came amid intense competition
among hedge funds and private equity investors to secure shares
in startups, highlighted by Russian billionaire Yuri Milner's
2009 investment in Facebook.
With tech companies waiting later than ever to go public,
some investors believed they may miss out on the biggest gains
if they wait to buy shares in public markets, when a company's
value may no longer rise exponentially.
The son of an Iowa psychology professor, Rizvi has networked
with rich and powerful people including Queen Noor of Jordan and
Google Inc's Larry Page and Eric Schmidt, devising
financing schemes that leveraged his access to deep-pocketed
investors, according to people who know Rizvi.
Those who invest with Rizvi include British billionaire
Richard Branson and Jeffrey Skoll, the former eBay
executive and film producer, according to people with knowledge
of the matter. It is not clear whether they are among the
investors he brought into Twitter.
Before turning his attention to the Internet, Rizvi's
deal-making focused on Hollywood. He helped Hugh Hefner take
Playboy Enterprises private; bought and then sold the Hollywood
film studio behind the "Twilight" series; and led the buyout of
a leading talent agency, International Creative Management
Rizvi is not alone among entertainment investors who have
turned their focus to Silicon Valley. Former News Corp executive
Peter Chernin's Chernin Group has invested in Tumblr, Pandora
and Flipboard, while Michael Ovitz, the talent agent and
former Disney CEO, has invested in Ron Conway's SV Angel
funds, the tech incubator Y Combinator and venture capital firm
But few have operated on the scale of Rizvi. Twitter has a
policy of restricting outside investors to only a handful, but
Rizvi has had more freedom to bring in additional investors
since he bought a large slice of the company.
"He's not to be underestimated. His approach to traditional
media as well as technology has put him in a great position,"
said Jeremy Zimmer, chief executive of United Talent Agency, a
competitor of ICM. "His ICM investment was viable and gave him a
seat at the table and a chance to make a sound investment in
In late 2010, Sacca approached Rizvi with an offer: Sacca's
friend, Evan Williams, had stepped down as CEO of Twitter and
was seeking to sell 10 percent of the company. Rizvi soon
snapped up the shares for $340 million, according to people
familiar with the matter.
Following that first transaction, the two men formed a
highly efficient tag team, the sources said. Sacca would seek
shareholders who wanted to cash out, while Rizvi helped raise
money to purchase the stock.
The friends successfully pitched JPMorgan Chase on a
deal to buy more than $400 million worth of Twitter shares in
2011. Months later, Rizvi recruited Kingdom Holding Co
, Saudi Prince Alwaleed's investment company, to buy an
additional $300 million in stock in a separate vehicle.
JPMorgan Chase and representatives for Alwaleed did not
respond to requests for comment on the deal.
By mid-2013, investment vehicles managed by Rizvi and Sacca
had collectively bought more than $1 billion in shares, a stake
that at one point amounted to nearly 20 percent of Twitter
before it was diluted in recent months, sources said.
Twitter declined to comment.
Rizvi's Twitter connections opened the doors to other
investing opportunities. Last year, Rizvi led a $200 million
investment in Square, the mobile-payment processing company
founded by Twitter co-founder Jack Dorsey, at a $3.25 billion
valuation. On Sept. 24, Rizvi led a $50 million financing round
for the news reader app Flipboard, whose founder, Mike McCue,
once sat on Twitter's board.
But he has not always gotten his way in Silicon Valley.
Although Rizvi owns indirectly some shares of Pinterest, Rizvi
failed to purchase a significant stake when the online
scrapboard site raised $100 million in 2012 and $200 million
this year. It was unclear what stymied his attempts.
"He fought tooth and nail for an allocation" but failed, an
angel investor in Pinterest recalled. "He was willing to pay."
It also remains unclear whether Rizvi's Internet investments
other than Twitter will pan out. Some industry insiders note
that he missed out on the huge gains that were made with very
early investments in social media, and companies including
Square and Flipboard remain unproven. Rizvi was able to buy only
$100 million in Facebook shortly before its IPO, thus limiting
his returns, according to people with knowledge of the matter.
FROM IOWA FALLS TO SILICON VALLEY
Rizvi, who owns a sprawling three-home compound in
Greenwich, Connecticut, and a 1.65-acre Palm Beach, Florida,
estate near Bill Gates and Michael Bloomberg, was born in India
but moved to Iowa Falls, a town of 5,200 people, when he was 5.
Along with his older brother Ashraf, a hedge fund manager,
Rizvi graduated from the University of Pennsylvania's Wharton
business school. Both now serve on the undergraduate school's
Rizvi worked as a real estate analyst while at Wharton, then
he started and sold a telecom company. With the proceeds, he
financed his first big buyout in 1995, when he bought the
electronic manufacturing business of a Puerto Rico phone
company. Refocusing it on making higher-cost equipment, he spent
the next four years boosting the company's annual revenue from
$10 million to $450 million.
He would not break into the elite circles of media investing
until 2004, after he founded Rizvi Traverse with John A.
Giampetroni, a New York private equity investor.
In 2005 the ICM talent agency, which represented stars like
Mel Gibson and Robert Redford, was looking for financing as it
struggled with the defection of key agents and stars.
Rizvi took a controlling stake in ICM for $100 million,
including $95 million in debt financing from Merrill Lynch & Co,
according to a person with knowledge of the deal. Rizvi Traverse
put up just $5 million. Later, he refinanced the agency for $300
million against future revenue from assets like "Friends," the
popular show in which ICM holds a stake.
That $300 million loan was enough to repay Merrill Lynch and
provide a hefty return for Rizvi and his partners.
ELUSIVE ON THE WEB
Even as Rizvi's circles have broadened, he has continued to
keep a low profile, both in his personal style - sometimes
flying commercial, one Hollywood executive said - and in his
hands-off approach to tech investing. Despite bringing capital,
he has not taken a board seat at Twitter, Square or Flipboard.
Rizvi's trusted lieutenant, Ben Kohn, has instead been the
face of the firm on the West Coast, several entertainment
industry executives said. Known for an aggressive negotiating
style that contrasts with Rizvi's more reserved stance, Kohn
manages a dozen employees out of a small office in Los Angeles.
Rizvi's growing network includes the likes of Vivi Nevo, the
secretive Time Warner Inc shareholder who also famously
prided himself on being "UnGoogleable," mutual friends of the
two men said.
But while Nevo is now easy to find online, Rizvi maintains
an elusive Web presence. The only readily found picture of Rizvi
is a snapshot of him sitting with Twitter CEO Dick Costolo and
Alwaleed in a New York hotel after the prince bought Twitter
The photo, on a Saudi news outlet, had irked Twitter
executives and Rizvi, as they had preferred to keep the