Joe Lacob's Last Business Venture Didn't Go So Well. Could That Be A Good Thing?

This might mean something. This might mean nothing. But the Wall Street Journal article on Lacob does illuminate a few things about Golden State’s new boss.

Lacob will hope this investment goes better than one he made in another company that pulled down some $450 million.

That would be oil and gas exploration company Terralliance Technologies Inc., of Newport Beach, Calif., which raised that capital from Kleiner and other firms – and burned through most of it without the results its investors hoped for.

Terraliance, which bought up oil and gas leases in places such as Mozambique and Kazakhstan, purchased satellite data to use in analyzing potential drilling sites, and dug test wells, certainly started off full of promise. It gained a series of large funding rounds starting in 2004 and reached a valuation of nearly $1 billion by 2006. But by March 2009, it had closed its foreign offices and laid off half its staff. VentureWire reported last year that the company had been in violation since the previous fall of the terms of a $150 million bridge loan it received from Passport Capital, after a $1 billion or more investment from Singapore-based Temasek Holdings fell through, according to sources.

Lacob was a board member of the company by virtue of Kleiner Perkins’ stake, and he got a first-hand look at the pitfalls of backing a capital-intensive company with somewhat experimental technology. Terralliance claimed that its mapping technology was more than 90% accurate. Results, however, never approached that level, and the company failed to find commercial quantities of petroleum.

So, you can interpret this in many ways. The two things that come to mind for me are:
1) Lacob takes a lot of risks.
2) He’s willing to lose a lot of money.

The fact that he was willing to outbid one of the richest men in the world for ownership of the Warriors shows massive cajones. And people need to spend a lot to net the big players in the NBA, so that’s also a good sign.

Maybe this is the type of guy Warriors fans have been looking for. Then again, anyone BUT Cohan would probably work for Warriors fans.

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