Why is VC Jeremy Levine lying for Jimmy Wales?Owen Thomas · 11/03/08 02:40PM
Money is a commodity. What venture capitalists really bank is their reputation. And Jeremy Levine of Bessemer Venture Partners has just signaled that he's willing to cash in his reputation to protect a piddling $4 million investment. Levine is not amused by our report of how Levine got Wikipedia cofounder Jimmy Wales fired from his job as CEO of Wikia, calling it a lie. The report is accurate, Wikia insiders confirm; Levine's denial is the lie. The only mystery here: Why is Levine willing to dissemble for Wales?The answer is pure self-interest. $4 million is nothing to a 97-year-old venture capital firm like Bessemer. It could easily write off its investment in Wikia, an attempt to capitalize on the anyone-can-edit wiki concept popularized by Wikipedia. But Levine has invested his reputational capital in Wikia. Admitting he made a mistake in backing Wales means Levine would lose face with Bessemer's partners, who will be more likely to question his subsequent investments. (That he has also invested in Yelp and Diapers.com surely does not burnish his record.) Levine would have us be impressed by the fact that Wales "volunteered to forgo his Wikia salary." This would be more impressive if Wales had not long ago forgone any pretense of doing any work to earn that salary. When Levine first invested in Wikia, Wales promised to spend 90 percent of his time on Wikia and 10 percent on Wikipedia. In fact, he spent nowhere near that proportion of time on either, focusing instead on an increasingly lucrative speaking career. I'm inclined to feel sorry for Levine, who was clearly deceived by Wales, but is stuck defending him, lest he admit to the con. We will give Levine this much. In a recent blog post, he wrote, "Valleywag reported some nonsense about Jimmy getting fired because of a bogus expense report. Nothing could be farther from the truth." What is uncontestably true: Levine was enraged when he learned that Wales tried to get Wikia to reimburse him for a $1,300 dinner with a private-equity investor, at which he primarily discuss ways to profit off of Wikipedia, not Wikia. But it is quite possible that Wales's attempted expense-account flim-flam was the least of his sins as CEO of Wikia, and that Levine actually fired him over more serious matters. If so, why doesn't Levine wash his hands of Wales, write off the investment, and tells us what Wales did? Otherwise, he'll find that he's only just begun his career of lying on Wales's behalf.