That new era of Venture Capital is here
A couple of years ago I posted about what I thought would be the “new era of Venture Capital.” Specifically I was predicting that we’d see a strong barbell effect in VC fundraising. From that post: I believe what we’re going to see in the venture industry is a bifurcation of fundraising– basically a barbell on the graph of fund sizes. Large, well known, multi-sector and multi-stage “mega-funds” will be able to raise $750MM or greater at one end of the scale, and smaller, more focused funds will raise $250MM or less on the other end – with a relatively small number of funds in the middle. [note: not sure what the problem is with the graphic from the original post, but I do know that it’s not rendering correctly) …
January 7, 2013· 2 min read
California, Massachusetts, New York, Colorado
California, Massachusetts, New York, Colorado. That’s the order of states with the greatest dollar value of seed and early stage investment according to a PWC MoneyTree study that my partner Jason blogged about today. $290M invested in 41 companies based in Colorado in 2011. Compare that with 2006 when Colorado ranked 12th on the list with just under $90M invested in 32 companies. That’s an incredible achievement and says a lot about the state of the entrepreneurial ecosystem in Colorado and our rising profile on the national stage. I’ve written extensively on why Boulder specifically, and Colorado in general, are great start-up markets (see here, for example). And these data show that the work and effort of many people in our state is paying off. I often tell people when they ask me how to replicate the success we’ve had here in Colorado that the journey is a long one. When building an entrepreneurial community one needs to take a 10+year view of the effort. When I think back to what the Colorado market looked like when I joined the venture industry about 12 years ago (based here, but working for a CA firm), it’s almost hard to fathom the changes. And while the number of venture firms located in Colorado has diminished significantly in that time, the overall entrepreneurial environemnt has really flourished. All giving support to what I believe to be a key truth about our industry – entrepreneurs come first! …
May 1, 2012· 2 min read
I’m getting sick of the bullshit
I love the start-up world. I love working with founders and young companies. I love the excitement of working on business ideas that are new and different. I love seeing the success that often comes from this hard work. I’ve never before in my professional life seen a time of such innovation and creativity. At Foundry we see more business plans now than we ever have. And what’s more, more of those business plans are really interesting (and fundable). …
March 5, 2012· 4 min read
Is there age bias in VC investing?
I recently waked into a pitch meeting for a social networking related business and was surprised by what I saw. I had interacted with the entrepreneur over email – taking a look at the initial business plan and setting up the meeting – but we hadn’t met in person before. In front of me were three guys in suits, each in their late 40’s or early 50’s, with an older Dell laptop and a paper print-out of some product ideas. And as I sat there listening to their pitch I couldn’t help but think about how differently I might have reacted if this team was in their 20’s or 30’s, dressed in full tech/nerd hipster outfits (or at least jeans and sneakers), and whether there is a negative age bias in venture capital. Here were three guys with 20-30 years of business experience, but I was having trouble getting past my expectation of what they were going to look and act like, versus what was in front of me. …
October 12, 2011· 2 min read
The real bubble
great business plan tweet.jpg While there’s been plenty of discussion and debate about whether we’re in some kind of valuation/venture bubble right now for early stage tech, there is one bubble that I’m pretty sure of. I’m seeing more great business ideas right now than I can remember seeing at any time in my 10 year venture career. We typically see around 1,500 business plans a year at Foundry (we actually see more than that, but this is the approximate number that are relevant to our investment focus). On average we’ll take a meeting with somewhere around 10-15% of these and hear a bit more than what was in the introductory email or initial business plan. And we typically invest in 8 (our Foundry blog does a pretty good job of tracing our investment history and pace if you flip through our old posts). These numbers work for us and for our strategy and part of our operating philosopy is not to deviate significantly from our investment pace (depending on the mix of seed investments this number could go up or down in any given year but overall we’re comfortable at roughly the 6-10 new investments per year pace). …
March 4, 2011· 3 min read
The new era of venture capital
You already know the about the state of the venture capital industry in 2009: venture investing down (32%), exits down (14%; slowest exit year for VC backed companies since 1995), fundraising down (56%), IPO’s almost non-existent (8 venture backed IPOs in 2009). It’s a bleak picture for the industry overall, even if there’s a group of us that continue to believe this is a great market in which to be investing (and it clearly is). These stats got me thinking about the future of the venture industry and I thought I’d offer up some thoughts on where we might be headed. …
March 22, 2010· 3 min read
VCIR Success – by the numbers
This is a cross post from the VCIR blog. We recently put together an analysis of companies that have presented at VCIR over the last 10 years. And the numbers are pretty impressive – reinforcing why the conference is such a great opportunity to see great companies from around the rocky mountain region. For more information on the conference itself, including how to register, visit the VCIR Winter website. VCIR By the Numbers: …
February 5, 2010· 1 min read
The VC Model is “broken” (again? yawn!)
In the latest lob into the morass that has become somewhat of a sport amongst journalists and those that follow the venture capital industry, Carl Schramm and Harold Bradley write in BusinessWeek about “How Venture Capital Lost Its Way”. The evidence? Venture capital funding is down – from an “astonishing” 1.1% of US GDP in 2000; and in the 3rd quarter of 2009 down 33% from the same period a year earlier. To add to Schramm and Bradley’s collective horror, “two areas crucial to American progress cry out for capital-intensive investment: clean energy technology and biotech. And the VC industry isn’t delivering it. (Info tech, which by now requires few capital investments, still accounts for the lion’s share of those shrinking VC investments)” …
November 24, 2009· 4 min read
Putting entrepreneurs first
Shout-out to Sequoia for featuring Omar Hamoui on their home page today (he’s the CEO of AdMob which was acquired by Google today for $750M). Well done! image
November 9, 2009· 1 min read
Don’t Panic!
I was recently talking to someone about an issue in one of their portfolio companies (this was not a Foundry or Mobius company). The issue was pretty serious (it related to safety standards at the company that were being ignored and a resulting accident at the business) and the person relating this story was (understandably) pretty worked up and asking me what I thought they should do. My advice? image …
September 15, 2009· 2 min read