Yesterday I had a long conversation with an entrepreneur about the relative value of time versus money in start-ups. Our conclusion: Time is more valuable than money Of course both are critical assets of any business – particularly an early stage business – but often companies make the wrong trade of time vs. money. This happens in dozens of different ways at businesses every day and ranges from big decisions on accelerating hiring to small ones like how to prioritize product features. I’m not suggesting that companies should run out and double their engineering teams (which would presumably accelerate the timing of their product at the expense of cash burn) but I am saying that in many companies the fundamental…
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There is no “Foundry Group Boulder Signaling Problem”
Forbes published an article yesterday by Maureen Farrell stating that there’s a “signaling problem” for TechStars Boulder companies who don’t raise money from Foundry Group. “… one byproduct of [Foundry Group’s] generosity for any young Boulder company is that, if it hasn’t been funded by The Foundry Group, it must explain why. Otherwise it has a signaling problem, something that happens when a VC invests in an early round but doesn’t show up for later rounds.” And while I’m going to argue (forcefully) here that neither my partners nor I either believe this to be true or even wish for that kind of market power, I should acknowledge that I’ve heard this before. And not just in relation to TechStars…
My RAIN Makers Conference Interview
I spent a couple of days last week out in the Twin Cities at the RAIN Makers Conference. I have to say I was pretty impressed (and surprised) by the strength of the entrepreneurial community in Minneapolis/St. Paul. I’ve known a few of the key guys from that community for a few years through Defrag and Glue but it was great to see how many people are really involved (there were something like 250 people at the conference). I shot an interview with Jeff from Tech[dot]MN that I thought I’d repost here. Seth Levine – RAIN Makers Conference from TECHdotMN on Vimeo.
There Is No VC Seed Investing Signaling Problem
My partner Brad recently wrote a great post entitled “Addressing the VC Seed Investor Signaling Problem“. This, along with several larger funds reaching out to me to ask for advice about starting their own seed investing programs got me thinking about the hype surrounding the VC Seed Investor Signaling Problem. My conclustion: THERE IS NO VC SEED INVESTING SIGNALING PROBLEM As Mark Suster points out in two fantastic posts on the subject (here and here) signals abound in the investment world. And frankly, as signals go, this isn’t a particularly major one. I’m serious. There are a million reasons that an investor group may or may not be able to continue to support an investment, some of which relate to…
My AdExchanger Interview
AdExchanger just posed an interview that I did with them that touched on some of our ad-tech investments as well as our overall investment philosophy. I’ve cross posted an unedited version of that interview below. 1. Why get into the venture capital side of the business? Do you ever get the entrepreneurial "itch"? I first got into venture capital about 10 years ago and I love my job. I was running a few business units for a small public company and while I enjoyed the operational side of my job, I was also responsible for M&A and partnerships and had a particular affinity for the transactional side of my job. While I consistently have the entrepreneurial itch, I actually think…
StockTwits Ticker Link and Private Company Symbols
StockTwits announced two great new features in the last week that are worth checking out. The first is a partnership with SecondMarket to expand the StockTwits platform to include private company streams. So just as you’d tag a post with $AAPL you can now tag private companies (think $ZYNGA,$4SQ, etc). Just as it is for public equitites, tagging your posts (tweets, blogs, etc.) with private company symbols is a much more efficient way to identify the company you’re talking about and become a part of the broader conversation about a company. StockTwits has put together an impressive database of private company symbols and is adding to this list daily. The second feature was launched with less fanfare – a WordPress…
Trada – from the beginning
Brad has a lengthy post up describing how we think about seed investing at Foundry Group. In it, he describes our philosophy around seed investing and differentiates it from what others (but not everyone) in the market is doing. Importantly, he notes that: our seed investments are not “options on the next round.” We price our seed rounds as equity investments, always lead or co-lead … and treat them the same way we would a $10m investment… when we make a seed investment, it gets everyone’s attention. We try hard not to smother it with love, but we recognize that we usually each have something unique to add to a seed investment and try to help accordingly. As a result,…
Immigration policy for recent grad school grads
I made reference to the issue of immigration policy in a post last week (see “Want more jobs? Support Entrepreneurship”). In that post I referenced a WSJ OpEd piece that my partner Brad Feld wrote last week with Paul Kedrosky about the Start-up Visa Movement (the idea that we should make it easier for foreign born entrepreneurs who are starting their companies and who have obtained financing to stay in the United States to build their businesses). In my post I went on to say: But let’s take this idea further. For example, how could it possibly make sense to deport a recent graduate school graduate (someone with the kind of technical degree that we so badly need here in…
Want more jobs? Support Entrepreneurship
There’s a great CNN opinion piece out today by Amy M. Wilkinson that argues strongly (and correctly) that the government needs to do more to support entrepreneurship and small businesses. I whole heartedly agree. Quoting from the piece: “According to the Census Bureau, nearly all net job creation in the U.S. since 1980 has been generated by firms operating less than five years.” This conclusion is backed up by the National Venture Capital Association which tracks the impact of private companies who receive institutional venture financing. You can read the recent NVCA report on the impact of venture capital on the overall economy here (the quick take-away is that this impact is extremely significant). With that as a backdrop, why…
Revolutionary Angels – Round II
Online technology magazine Xconomy wrote an article yesterday that focused on the controversy surrounding Boston based Revolutionary Angels – the angel group that is sponsoring a business plan competition in which companies are charged a $4,995 “entry fee” and vie for a $250k investment from the group. I wrote extensively last week about my distaste for the “pay to pitch” practice in general and Revolutionary Angels’ spin on that practice in particular. The Xconomy article picked up that post and used it to effectively represent one side of the story. They also talked to Chris Hurley, the CEO of Revolutionary Angles, who defended the group and their practices. Clearly this question has struck a chord with VCs, angels and entrepreneurs…