Menlo Ventures has added a familiar face to its roster of partners, bringing Shawn Carolan back as a managing partner for its consumer investments. Carolan rejoins the firm after an entrepreneurial stint as founder of the workflow companion app Handle and his return coincides with Menlo’s expansion into San Francisco.
Carolan had been a successful venture capitalist for a decade — backing consumer startups such as Uber, Siri, and Roku — when he decided it was time to strike out on his own. He founded Handle with the aim of helping users manage their priorities for the day, and Handle opened in private beta three years ago. For the first couple of years, he tried to juggle being both a founder and a VC, but he explained that “when birthing something brand new, it’s all-consuming and not sustainable.” Therefore, in 2014, he left Menlo to pursue his dream full-time.
However, after Handles’ public debut and subsequent integration with Google Apps, Carolan realized that Handle was focusing on a niche play and wasn’t considered a “fast-growth venture-backed company.” After exploring potential acquisition opportunities, the company did receive a bid, but Carolan declined to take it, as he didn’t want to feel locked in (he didn’t care to offer any details about the interested party. Handle still remains operational, with one of its mobile engineers assuming control.
“I decided I was going to be an exceptional investor, given this experience,” Carolan said. “After getting over the ego thing about the second race to run as an entrepreneur, I realized I could do a better job at investing and helping entrepreneurs manage the process, avoid mistakes, etc.”
And Menlo Ventures was happy to continue the relationship. “We’re thrilled to welcome Shawn back to the Menlo fold,” said managing director Mark Siegel. “Not only does he have a great track record as an investor, he has an innovator’s mindset and an entrepreneurial perspective that enables him to be a valuable advisor to founders…”
It’s this experience that Carolan said has given him a different perspective during his second investor run, especially as it pertains to consumer startups. He’ll be looking for those that incorporate some of the following aspects: natural language processing, machine learning, augmented reality, wearables, computer vision, and virtual reality. He cites Uber as an interesting example from an early investment standpoint, in that the problem Menlo saw wasn’t “Hey, we hate hailing taxis.” Instead, it was about looking at GPS as part of the computing platform, using mobile apps, reducing the time and friction involved in downloading apps on the fly, looking at web services, and more. For Carolan, it’s less about trying to predict the “next big thing” and instead about examining what he calls “ingredient technologies” that power new breakthrough products.
As part of his return, Carolan will also oversee the expansion of the firm into San Francisco, a move others, like Kleiner Perkins Caufield & Byers, Norwest Venture Partners, and Shasta Partners, have already made. “Moving to San Francisco means focus,” Carolan explained, adding that while Menlo’s partners did consumer deals in the past, no one dedicated 100 percent of their time to looking at consume tech startups. “The team I’m building will have that focus. For us, there’s a big efficiency in being local and [taking advantage of the] serendipity of walking around.” He anticipates incubating some portfolio companies in the firm’s new offices.
A location for the San Francisco office hasn’t been picked out yet, but Carolan will split his time between the Menlo office in Menlo Park and San Francisco. Additionally, the firm plans to bring on a partner and two associates to support Carolan as he invests further in the consumer space.