The Story Behind My Seventh Investment, Gyft

Last summer, a friend had an extra ticket for the U.S. Open at the Olympic Club in SF. Wow. I grew up working the grounds on a golf course and would play every afternoon into twilight, hacking my way into a great short game (for a while). But I’d never been to a real tournament, let alone one like the U.S. Open. A few years ago, I went to one of the shoot around days before the AT&T Pebble Beach Pro-Am – that was incredible, it was February and about 82 degrees. I’ll never forget that. Anyway, my wife and I had a very important trip to take on Friday night and the tournament ticket was for Friday morning, and it was a pain to get to. I remember promising to my wife that I’d be back by 2pm so we could get ready and head to SFO.

My friend Ryan was driving there, and we caravanned with his friend, Vinny. The three of us eventually made our way to the San Bruno BART station, took the bus to the club, forfeited our phones, and then went into the tournament. Tremendous day on the course, and the three of us had a blast. (As a side story, I ran into a friend randomly on the course who introduced me to someone who has truly helped me out. That’s for another post.) Vinny needed to get back around the same time, so met up and drove back and, surprisingly, had a really good conversation. I didn’t realize who he was, how he built companies in South Africa, and what he was trying to do here, in the Valley. His viewpoints were so different from what I was used to hearing, he just sounded like an entrepreneur who learned tough lessons through the course of his previous companies. On the spot, I asked him to be on my show.

Over the next few months, I got to know Vinny better. I learned of his company Gyft and they’d just closed a seed round. I had him on TCTV with me for a fun conversation. At first, I wasn’t really interested in a mobile gift cards company. That was my mistake. At the time, I wasn’t investing, yet I didn’t really take it seriously. Nevertheless, Vinny and I became friends naturally and started meeting up in Palo Alto. From time to time, I’d help him on a few things. Then, earlier this year, we grabbed some coffee and went on a walk. I’m not sure what his goal was. I think he was trying to recruit me. I’ve been focused on a few projects this year so wasn’t in the mindset, but then he shared some details about the company that piqued my interest — I wanted to explore investing in Gyft.

Gyft has been on a hot streak and I was kind of late to the game. In addition to being on iOS and Android (with a slick cards interface), the team has launched Gyft Registry, enabled purchasing via the web, won approval to sell gift cards to mega-brands (which will be announced soon), and sold over $1M of new gift cards, not to mention other activities…and what are those?

In the beginning of 2013, I wanted to make one of my first investments in a Bitcoin company. I was introduced to the founders but couldn’t sync up by phone. For whatever reason, we never connected, and as a few months passed, Bitcoins exploded and, as one of the best companies in this space, was funded by one of the best investors. During this process, I researched Bitcoins like crazy, and bought some too (luckily). I found there were a few types of Bitcoin companies, and Gyft allowing customers to convert Bitcoins into gift cards, where the retailer would pay Gyft for selling a gift card (common practice) and where Gyft would convert the Bitcoins for the customers using a third-party exchange. The result? Margins. As soon as I heard that, I asked to invest. Vinny thought about it, and graciously made room for me. There are so many layers to what Gyft is doing beyond gift cards. I wasn’t sharp enough to see that at first. That is the case with great entrepreneurs, actually — they’re so far ahead of the market and, of course, investors. Gyft is really about mobile commerce, about payments, about giving consumers new choices, and about creating rails for new digital currencies to feed back into retail. Now I know, and am lucky to be involved.