DEALMAKER, September/October 2007

In the early 1990s, as a junior at the University of Pennsylvania’s Wharton School, Joshua Kopelman pitched Infonautics, a startup online library, to venture capitalist and Wharton professor Howard Morgan. In 1996, its IPO raised $31.5 million.

In 1999, the pair started Half.com, an online seller of used books and music, which was sold to eBay a year later for $350 million. Now Kopelman, 35, and Morgan, 61, co-run First Round Capital, a venture-capital fund they launched three years ago.

KOPELMAN: Howard had a great reputation as an angel investor and a coach to entrepreneurs. I realized very quickly he was also one of the smartest people I’d ever met. He’s only two degrees of separation from everybody else. His passionate encouragement gave me the confidence to trust my gut and take risks.

MORGAN: Josh immediately struck me as an eager young kid doing some interesting things. He worked tirelessly at trying to learn everything he could about the business, which was a valuable asset — because in small companies you don’t want to hire a lot of people. He had especially good ideas about how to market this new thing called the Internet.

KOPELMAN: We communicate very well. For me, the best ideas come from talking with really smart people and synthesizing disparate views, and my conversations with Howard almost always unearth gems. He has a strong grasp of what is possible in technology and tends to be much more optimistic than I am. When I got the idea to start an early-stage venture fund, the first call I made was to Howard.

MORGAN: Josh is especially skilled at looking at products from the consumer’s point of view. My background is in technology, but by watching Josh I’ve learned a great deal about marketing and public relations. Great marketing wins over great technology any day.

KOPELMAN: Neither of us has to work anymore, but we don’t consider this work. We like helping early-stage companies grow and being involved in multiple projects at once, and we enjoy the challenges of weighing potential new products against historical precedents, which Howard has at his fingertips. He always says, “History doesn’t repeat itself — but it tries.”