One of the great trends we’ve been witnessing over the past decade, and in particular the past 5 years, has been what you might call the “democratization” of entrepreneurship”. It’s a powerful trend and one that I think will have a huge impact not just on the US economy and workforce, but perhaps even more intensely on other areas of the world – particularly developing economies. There are several underlying factors that I think underpin this sift that are worth noting: – The breaking down of geographic boundaries that confined entrepreneurial communities. Fundamentally entrepreneurial communities are networks (not hierarchies). And as such they thrive best in open environments that lack artificial restrictions. They also thrive best when information sharing is…
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Welcome Costanoa
While the world may not need more venture capitalists, it definitely needs more good ones. Enter Costanoa Venture Capital – launched today by long time investor and entrepreneur (and friend) Greg Sands. As an entrepreneur, Greg is probably most famous for having named Netscape – literally, he was the guy who came up with that name. And of course, working there for quite a while in the seminal days of the internet. As a VC, Greg has been a long time partner at Sutter Hill Ventures. I’ve had the pleasure of working with Greg on a number of investments over the years, including both LinkSmart and isocket in the current Foundry Group portfolio (these are both Costanoa investments). He’s a thoughtful and extremely helpful…
Some thoughts on your ABBA round
I’ve noticed an ongoing trend over the past year or so that’s worth highlighting and commenting on. As valuations have risen (become “frothy” in VC speak, which is our nice way of saying “too high”) companies have started raising much larger Series A rounds. This is anecdotal – I’ll try to validate it when the numbers are released – but where companies used to raise $3-$5M for their Series A, one response to higher valuations has been a much larger number of companies raising larger and larger Series A rounds (say $6M-$10M). I think this is driven both by entrepreneurs who want to take risk out of their business with more cash on the balance sheet, as well as by…
Accomplishment vs. Success
I had a great conversation with an entrepreneur the other day talking about the difference between accomplishment and success. Accomplishment is what happens on the road to success, but declaring something a “success” vs. recognizing that it’s simply one of a handful of requirements to get to success. And of course viewing something this way changes the lens through which you consider that accomplishment and can significantly change decisions you make because of it. Think of it like drawing a line through a single point (or even a couple of relatively closely grouped points) – it’s easy to delude yourself into thinking you’re on one path before you actually have the data to prove it. And for a start-up, this…
Process vs. outcome
I’ve had a few conversations recently about the right balance between process and outcome. I’ve been involved with a group that’s been very (very) process focused- which has lead to some great discussion, but has hampered action/outcome and it’s got me thinking about where the balance lies between the two. When I was younger (and apparently somewhat more patient) I was much more process oriented. Outcome alone as the measure of success wasn’t enough – there needed to be a solid process behind it. I’m reminded of my days at a Quaker camp in Vermont where we’d hold lengthy “town meetings” to make decisions. All decisions were made by consensus and often discussions on relatively mundane topics extended for hours….
How much should a start-up CEO make?
I was asked this question at a talk I gave to the recently graduated TechStars Boulder class and thought it deserved wider dissemination than to just the group in the room at the time. This is a loaded question and while there are many variations I do actually think there are some general norms that are followed in most cases. So here goes with some guiding principals and then below that some numbers. Keep in mind that I’m talking about Seed and Series A stage businesses. – Pay yourself as little as you can. Cliché, of course, but true. At the seed stage the modest amount of money you have raised is best spent on product and attracting initial customers…
The most important provision of the JOBS Act
When the JOBS Act was passed several months ago there was much fanfare about the key provisions. Especially the raising of the number of investors that a private company could accumulate before being forced to report as a public company and the so-called “crowdfunding provision” which allows companies to raise up to $1M of private capital from an unlimited number of investors (regardless of whether they are accredited or not). The Act also changed the rules around general solicitation and advertising for certain private capital raises and eased the regulatory burden on some newly public companies. One of the provisions that didn’t get much attention but that I felt was perhaps the most important of the Act was the provision…
Getting it Right the 2nd Time (our investment in SEOMoz)
It’s not often in this business that you get a second bite at the proverbial apple, but with our funding of SEOMoz announced today we got just that. I first met SEOMoz founder and CEO Rand Fishkin in late 2008. It was a pretty memorable meeting in the lobby of the Vitale. At the time I was deep into the SEM side of the search world and was thinking about whether we wanted to place a bet on the organic side of search (aided at the time by what seemed like a large number of SEO agencies trying to productize their service into some kind of software package). It was clearly a big opportunity. I liked Rand a lot and…
Glue 2012 will be the best Gluecon yet
As you may know from reading prior posts on the subject the two days that comprise the Glue Conference (May 23rd and 24th, 2012) are some of the most information packed and interesting days of my year. To me what sets Glue apart is that it stands almost alone in the conference circuit as a show that’s neither company specific (Google I/O, Dreamforce, Chirp) or startup celebrity focused (DEMO, TC50, etc.). There are only a sparse few events that are developer focused – which makes Glue that much more important. Glue is an incredibly well run conference and you can tell by looking at both the substance and structure of the agenda that Eric and Kim have put a lot…
Impressions of Android and the Galaxy Nexus
About a month ago I switched from my iPhone 4S to the Galaxy Nexus from Samsung. I was finally making the move from AT&T to Verizon and I couldn’t bear the idea of paying $450 once again for another 4S “upgrade”. I’d been meaning to try Android and figured now was as good a time as any. And since I wanted to run Ice Cream Sandwich that meant a Galaxy Nexus. I switched cold turkey and have been using the Nexus exclusively. Since a lot of people ask me how I like it I thought I’d post some thoughts. First, the conclusion (in case you don’t want to read any further). I like the Nexus and Android and it’s definitely…