NY TIMES– Aug 5 — When Neil Clark Warren and Greg Forgatch, the founders of eHarmony, a popular online dating site, were making the rounds last fall looking to raise venture capital, they weren’t merely seeking money to bankroll a big TV marketing blitz. Rather than wait for eHarmony to go public, which might never happen, or for some bigger company to acquire it, which also might not happen, the company’s founders decided to look for venture capitalists willing to cash out some of the stake they and others held in the company. They had no trouble finding eager venture investors, even though a big chunk of the investment would end up paying for vacation homes and other personal luxuries, rather than building the company. In eHarmony’s case, 116 people benefited financially when the company, which was started in 1999, announced last December that it had raised $110 million. The word within the venture capital community is that less than $30 million of that sum went into the company coffers. Mr. Forgatch said that was inaccurate, but he would provide no specifics. FULL ARTICLE @ NY TIMES
