By Nazanine Nouri
Pejman Nozad must be the tech world’s most unlikely venture capitalist: He started out as a rug dealer in Silicon Valley. A founding partner of Pear VC, his venture fund was valued at $440 million when the company went public in December.
Nozad has been named as one of the most powerful players in tech. He struck out on his own in 2013, founding Pear Ventures, an early-stage fund with his partner, Mar Hershenson, a startup veteran teaching at Stanford. One of the first five deals they backed was DoorDash, in which they invested $1.9 million. Since then, Pear has invested in more than 100 startups, including Guardant Health, Gusto and Branchmetrics.
“We have one goal with Pear, and that is to be the best seed fund that ever existed,” Nozad told the Founder & Funder Experience podcast in September. “We’re not there yet, but we wake up every morning and think about it.”
Nozad’s journey did not begin at the top.
He grew up in Iran and was 10 years old at the time of the Iranian Revolution. He attended the German school in Tehran before it was shut down, and spent his teenage years living through a revolution and an eight-year war. Pejman was a very good student and passionate about soccer, and he played professionally while in Iran. At 16, he started writing for a sports magazine, and at 18, he hosted Iran’s most popular sports radio talk show.
After two years in college, he decided to leave Iran with his family and move to Germany, where he got a scholarship playing soccer. Persuaded by his brother to apply for a U.S. visa, he put in an application at the U.S. consulate which was accepted thanks to his skills as a sports writer, and moved to America.
As he recalled in a September tweet, “I dropped out of college in Iran and came to America with just a few hundred dollars. I didn’t speak English. America opened its arms and gave me the opportunity to build a new beautiful life.”
2/ In 1992, I dropped out of college in Iran and came to America with just a few hundred dollars. I didn't speak English. America opened its arms and gave me the opportunity to build a new beautiful life.
— Pejman Nozad (@pejmannozad) September 25, 2020
In 1992, he arrived in San Carlos, California, where his uncle used to live, with $700 to his name — and not speaking a word of English. It was not long before he ran out of money. The love of his life, his childhood sweetheart, stayed behind in Iran.
He started working at a car wash in San Jose, and as his English improved, he got a job in a yogurt shop in Redwood City. He convinced the owner to let him sleep in the attic above the store, so he could save money to go back and marry his sweetheart. (The couple would eventually reunite and have been happily married ever since.)
One day, he saw an ad on a Persian-language television channel for the Medallion Rug Gallery in Palo Alto which was hiring a salesperson. He got the job, moved out of the attic, and started the next chapter of his life.
The store was located on University Avenue, the “mecca” of enterprise at the time, where Facebook, Google, and Yahoo had all begun. Starting out by serving tea and sweeping the gallery’s floors, Nozad quickly worked his way up by learning the trade.
He realized that selling high-end rugs required trust and strong relationships, and that is what he set out to build over time. He became friends with his customers, went to their homes, spent time with their families, got to know them, and closed sales. It was not long before he became the store’s top salesman (selling $8 million worth of rugs in his best year.)
His customers were mostly venture capitalists and entrepreneurs who worked nearby on Sand Hill Road. He was impressed by what they had achieved and wanted to be part of that community.
“It was not because of how wealthy they were,” he told the Angel podcast in October 2017. “These people were creating things with knowledge and I wanted to be one of them. I thought to myself, maybe this is the most important street in the world I am working on and maybe this is the most important time of my life. I have to capture this. So my mindset changed.”
From then on, every time he visited his customers’ homes, he researched them on Google prior to his visit and asked them questions about what they did. They opened up to him as they developed a friendship.
After a few years, he had built up an impressive network that included the most influential people in Silicon Valley. He convinced his boss, the owner of the rug store — the late Mr. Amir Amidi — to start a tech venture fund.
“I said we don’t know tech, but we know a lot of people who can provide advice, and we have this space and we can do a lot of events.”
That is how they started hosting events for investors and startups in the rug store. His boss agreed to start out with a $2 million investment and asked Nozad to put in 10 percent. Nozad didn’t have $200,000, so his boss started deducting a portion of that amount from his monthly commissions from the sale of carpets. “He made me work hard,” he says, “and for the next 10 years, I sold carpets and looked at startups at the same time.”
The magic of Silicon Valley, he said, was that people gave him the benefit of the doubt. They did not judge him. “When I was going to people’s homes, they didn’t say, ‘this kid is selling carpets. How can he do tech investments?’”
One of those people was the managing partner at venture capital firm Sequoia Capital, Doug Leone. Nozad had visited his home in Atherton to sell carpets and after trying for a couple of hours, but hadn’t succeeded in selling anything, as Leone was a tough negotiator.
Nozad recalled what happened at the end of the visit.
“I said: ‘Doug, by the way, I invest in tech.’ He looked at me and said: ‘I’ll come to your office tomorrow at 7 a.m.’ He showed up the next day and said: ‘How can you help us invest in tech companies?’ I said ‘I will put together an event and you bring in your entire senior team and I’ll bring 100 people.’”
“We had an amazing night at the rug gallery, with all the senior partners at Sequoia Capital and 100 entrepreneurs, with Persian food, and things kicked off,” Nozad recalled. “Seven years later, I picked up the phone and called Doug and said that I had just met two great kids, Drew [Houston] and Arash [Ferdowsi] who have this company, Dropbox, and you should meet them. He didn’t hesitate, and we met them the next day and within five days, Sequoia invested in Dropbox.”
In addition to Dropbox, the tech venture fund was the first to invest in Lending Club, SoundHound, Danger, Zoosk and others.
“Today, the companies I’ve invested in are worth more than $20 billion,” he added, “and many of them started as pitches in the rug gallery.”