Both Sides of the Table

MAY 19, 2013

I have a very public seed stage investment policy and awe.sm The decisions were endless, the choices not obvious and the VC involved a pain in the ass. The financial pressures of running a startup started to hit Jonathan. I saw it first hand. So I wrote another check to extend our runway another year.

Technical Review 303

Technical Review Cofounder Analytics Founder 303

Both Sides of the Table

MARCH 1, 2016

Another Area of Concern is in the Seed Investor Class. I have also heard LPs express concern over the last few years about the seed stage of venture. One narrative is that too many funds have been created, and without a strong sense of differentiation, there will be too many mediocre seed funds.

Venture Capital 150

Venture Capital LP Silicon Valley Marketing 150

Both Sides of the Table

OCTOBER 12, 2014

But with the massive growth of seed funds being raised and the huge value increase of prorata rights many more LPs have stepped in to take their VC (industry term is GP) position. What would you do as an LP fund if you backed a seed-stage GP who had a position in Twitter, Pinterest, etc. But there is never a simple answer.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

FEBRUARY 6, 2017

In case you’re keeping score at home — that’s approximately the size of 65 US seed-stage funds managed by one company. Those two investments represent the equivalent of another 32 US seed-stage funds just in two deals. WeWork raised $690 million from Chinese investors, NextVR $80 million and Meta AR $50 million.

Venture Capital 150

Venture Capital Saudi Arabia Kuwait Burn Rate 150

Both Sides of the Table

APRIL 2, 2010

A fund size of $100 million – $200 million is likely to either be an A round investor or “stage agnostic&#. A round investor implies they are the “first institutional money in the deal.&# GRP Partners is stage agnostic.

Venture Capital 269

Venture Capital Balance Sheet Early Stage Software Review 269

Both Sides of the Table

JULY 25, 2010

. “Yes&# was given to me by one of my favorite angel investor / seed VC’s to work with – John Greathouse of Rincon Venture Partners and author of the blog InfoChachkie that you should check out because it is filled with great info from a guy who has been a very successful operator.

Silicon Valley 293

Silicon Valley Technical Review Southern California Angel Investor 293

Both Sides of the Table

SEPTEMBER 9, 2009

Pitch 1: I had an awesome young entrepreneur come in this week to talk about his seed stage business. He wasn’t really ready to raise VC but wanted to meet me early in his process and wanted some help thinking through potential angel or seed stage investors. It was a 1-on-1 meeting between the two of us.

Seed Stage 288

Seed Stage Advertising Widget Video 288

Both Sides of the Table

JULY 15, 2010

Crosscut is a seed-stage fund based in Southern California that has been in some hot local deals like ShoeDazzle (Rick discusses how they get in when it was a super competitive deal – great story), DocStoc, GumGum and others. I talk in the video about the economics of venture capital and how we make money.

Southern California 210

Southern California Venture Capital Seed Stage Angel Investor 210

Both Sides of the Table

MAY 9, 2012

I met with local seed fund investors like Mike Venerable who is the MD of CincyTech (a local seed stage fund), Tony Shipley who is a director of Queen City Angels as well as some local entrepreneurs including Blake Shipley of CoupSmart and Sameer Mungur of ZipScene. It’s easy to discount Cincy – it’s a “flyover state.”

Houston 364

Houston Dallas Los Angeles Chicago 364

Both Sides of the Table

SEPTEMBER 28, 2011

Separately, in the morning I called a seed-stage investor in NY and talked to him about investing in one of my companies. He turned me down for a job in 2005. Yesterday I offered him a term sheet. I spent time today negotiating it with him and getting my partners bought into some changes. Fund raising. Yes, we have to do it to.

Email 314

Email Product Term Sheet Portfolio 314

Both Sides of the Table

SEPTEMBER 5, 2012

” And some seed stage investors told me, “I prefer not to fight over price now. Nobody I know accepts multiple liquidation preferences in early-stage deals. And every seed stage VC tells me they don’t ever even ask for them. I just want into the hottest deals. That’s all that matters.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

SEPTEMBER 27, 2010

Now we can call you a seed-stage VC or a micro VC. .&# If you’re investing other people’s money you’re a professional money manager. If you invest it in startups you’re a VC professional money manager. We can even acknowledge that you might work differently than traditional VCs.

Liquidity Event 308

Liquidity Event Silicon Valley Seed Stage Finance 308

Both Sides of the Table

DECEMBER 13, 2010

“Reality is, at the seed stage, most rocketships look more like the cardboard variety you’d make as a kid than something NASA developed. I was reminded of all this this when I read a blog post by one of my favorite thinkers on the VC market, Bryce Roberts, who talked about “ unfundable companies.&#.

Turkey 302

Turkey Differentiation IP Technical Review 302

Both Sides of the Table

OCTOBER 6, 2010

Mostly by early stage investors talking about getting smaller exits. But whether you’re talking with micro VCs, seed stage investors or series A,B investors they all want to believe that your company CAN be big one day. Market Size - There is a lot of talk about “dip sh**&# companies these days.

Early Stage 360

Early Stage Startup Venture Capital Seed Stage 360

Both Sides of the Table

JULY 26, 2022

The other argument I made to LPs at the time was that if we combined $650 million or more into a single fund it would mean that writing a $3–4 million would feel too small to each individual investor to be important and yet that’s the amount of capital we believed many seed-stage companies needed.

San Francisco 408

San Francisco Early Stage Venture Capital Los Angeles 408

Both Sides of the Table

OCTOBER 17, 2009

Many VCs who do lots of seed stage deals are very supportive and active. I think they definitely qualify as a VC and not a seed fund. They do many early-stage deals. If a VC term sheet comes in they begin their due diligence process. I recommend you do your own due diligence before deciding whether to take this money.

Software Review 283

Software Review Term Sheet Due Diligence Southern California 283

Both Sides of the Table

JUNE 29, 2011

Tomorrow’s post will focus on the coming brick wall that I see in Venture Capital caused by a massive increase in seed-stage & angel deals couple with a reduction in the number of VCs by 2/3rds. In either case, venture capital will remain an attractive option for teams who want to pursue their business ideas and scale.

Venture Capital 296

Venture Capital Software LP Early Stage 296

Both Sides of the Table

MARCH 18, 2014

You have a seed-stage company who had raised $500,000 and then later raises $8 million still acting like a seed-stage startup. But at want point do you need to flip from scrappy to “scale-y”? Um, well, that word choice doesn’t exactly work. I have seen this problem up close so many times.

Seed Stage 352

Seed Stage Startup Retention PR 352

Both Sides of the Table

MARCH 6, 2011

I still think it’s best to take money from Dave when you’re also partnered with a more focused, hands-on seed-stage VC who brings different things to the table – like more ability to write larger checks in a downturn (for one) or solving a deep crisis that involves super hands-on involvement.

Valuation 292

Valuation Deal Flow Lead Investor Cofounder 292

Both Sides of the Table

OCTOBER 18, 2015

Cendana founder Michael Kim was amongst the earliest and certainly the most focused LP to spot the changes in venture capital leading to seed stage funds and has backed many of the best in the industry so it’s always a pleasure to come and share thoughts with all of these great peers.

IPO 150

IPO Venture Capital LP SEC 150