The Humiliation of a Creepy Russian Sugar DaddyS

Russia's Digital Sky Technologies might be the toast of Silicon Valley, but the investment firm gives the Russian founder of Chatroulette the creeps. Sometimes it takes a teenager to say the obvious, rude things adults can't bring themselves to utter.

Digital Sky recently invested big money in social networking companies Facebook and Zynga, and is thought to be considering an investment in the likes of Foursquare and Twitter. CEO Yuri Milner is a featured speaker at the upcoming TechCrunch Disrupt conference.

But Milner and Digital Sky have had no luck seducing a fellow Russian, the 18-year-old founder of Chatroulette. Although they hired a driver to chauffeur young Andrey Ternovskiy around during a recent visit to the New York, the teen wants nothing to do with them, according to the New Yorker:

The Humiliation of a Creepy Russian Sugar Daddy

"I am not planning anything with him," [Ternovskiy] said, flapping his fingers against his thumb to imitate Milner talking. "I want to meet with American investors."

... Ternovskiy had told no one he was taking the Sunday-afternoon flight out of Moscow's Sheremetyevo airport. But when he arrived in New York he found a car from Digital Sky Technologies, the Russian company, waiting for him at the airport...

Andrey, ensconced in a New York hotel, was scornful. "Is that even appropriate for an investor?" he asked me. "Harassing and hounding are the only words which come to mind."

"Creepy" comes to mind, too. And we've learned plenty about Digital Sky over the past year to reinforce Ternovskiy's instinct that American investors are preferable to Russian ones.

The case against Digital Sky starts with its co-owner Alisher Usmanov. CEO Milner has dismissed his influence, but Usmanov's stake in the investment firm amounted to 32 percent last year, according to Usmanov's own newspaper, making him, by simple math, a big fish among DST's five known investors. In fact, he may well hold a bigger stake than any other owner, given than Milner himself shares a 50 percent stake with partner Gregory Finger, as of last year.

A summary of what we know about Usmanov, aka "the hard man of Russia:"

  • Usmanov has been dubbed a "gangster and racketeer," rapist and mafia drug trafficker by Britain's former ambassador to Uzbekistan. Usmanov denies the charges.
  • To fight the aforementioned accusation, Usmanov's lawyers launched a much-derided legal campaign to keep British bloggers from even talking about the charges. There's more in the video report "Blogs vs. Usmanov," from British Channel 4's cable network.
  • A subsidiary of the De Beers diamond cartel named Usmanov in a suit alleging fraud and "unjust enrichment" in a fight over a diamond mine in northern Russia. Usamov's people denied this publicly in strong terms.
  • There are clues Usmanov could have been part of a violent plot to acquire mobile-phone operator Megafon. A former co-owner of Megafon disappeared from his bloodstained vacation home in Latvia after telling a U.S. federal court he had been physically coerced into selling his Megafon stake to IPOC, a Bermuda entity, as part of a "plot by high-profile individuals to secretly take over Megafon." Two months after he disappeared, it was announced Usmanov had acquired 39 percent of Megafon, in part by buying IPOC's Megafon shares.

You can read more in our Usmanov Field Guide and later coverage of him.

Of course, no one does business in Russia without getting their hands dirty, and it's possible Milner is telling the truth when he insists that Usmanov has no influence over Digital Sky, holdings be damned. Plus it's an awfully long trail from Usmanov, in Russia, through to Digital Sky, Digital Sky's U.S. investments, and the actual American offices of those investments. It would seem tough for Usmanov to do too much damage at such a great distance. Perhaps we should be grateful Digital Sky is plowing so much money into otherwise illiquid technology startups which, by the way, are owned and operated in America and stand to enrich this country.

But it's worth at least asking why the nefariousness of Digital Sky seems plain as day to the company's fellow countryman and the internet entrepreneur of the moment, Mr. Chatroulette Andrey Ternovskiy. And it's worthwhile to throw some tough questions at Milner when he's up on the American tech conference dais — alongside all the desperate funding pitches.

[Top photo: Usmanov in 2008 via Getty Images]