Many VC Firms Ban Side Investing. Milner’s DST Encourages It (1)

Many venture capital firms frown upon or even bar their partners from using their own money to make side investments in startups. At DST Global, the investment group run by the Russian-Israeli billionaire Yuri Milner, personal investing is institutionalized.

A prevailing philosophy in venture capital is that allowing partners to broker personal investments can put their interests at odds with those of the firm. An investor might choose to bid up the valuation of a startup he holds using his employer’s money, in turn increasing his paper wealth.

DST sees things differently. The firm doesn’t typically invest in young companies, ...