Genuine VC

Fellow VCs: Here’s Where to Invest $1B+

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A couple weeks ago my colleague Dimitri Dadiomov published a post on NextView’s “View From Seed” blog which answered the question “Should we take Harvard MBAs Seriously as Startup Founders?”

The Unique but Powerful Way the HubSpot Mafia is Impacting Boston Startups

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It’s official: now two months after the IPO, HubSpot has surpassed the $1B market cap threshold and has become that “pillar” company that the tech ecosystem long anticipated. The benefits have been touted previously : an anchor for attracting and retaining talent in Boston, as well as a breeding ground for the next set of great Boston entrepreneurs and founders.

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Seeking Nonconsensus

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Tales become legends about founders of exceptionally transformative companies who truly struggled to get any investors’ attention early on. These rejection emails to the founder of Airbnb represent just one of the most recent example of this familiar theme. If a startup were obvious, then everybody would be doing it. And it wouldn’t be an opportunity. My partner Lee likes to talk about successful fundraising as “ finding the believers, not convincing the skeptics.”

The “Come-from-Behind” Lead Investor

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As an entrepreneur, if you’re running a venture capital fundraise effectively, you’re treating the process like a sale process: identifying a set of prospects to fill the top of the funnel, cultivating those relationships over a series of meetings, then narrowing down to a handful of contender firms who will ultimately make an offer to invest with a term sheet.

What the Founder’s Email Address Says About Your Startup

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It always feels anachronistic these days to exchange business cards when you usually have someone’s contact information anyway in an electronic format before (via email introduction) or just after (via LinkedIn connection) you meet. Many people, though, take the opportunity with a physical card to make an impression with a unique spin on their card (size, vertical orientation, etc.).

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What the Founder’s Email Address Says About Your Startup

Genuine VC

It always feels anachronistic these days to exchange business cards when you usually have someone’s contact information anyway in an electronic format before (via email introduction) or just after (via LinkedIn connection) you meet. Many people, though, take the opportunity with a physical card to make an impression with a unique spin on their card (size, vertical orientation, etc.).

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The VC Fundraising Timing Paradox

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I’ve commonly heard entrepreneurs recite some version of “I don’t want to waste too much time fundraising because it will distract me from building my business, so I’ll only talk to a few potential funders.” The idea is that a couple of highly-qualified VC conversations will follow the 80/20 rule of a “good enough” financing in a relatively short amount period without taking the time of an extended process to truly optimize the funding outcome.

Myth Busters: Debunking Seven Conventional Wisdom Maxims of Venture Capital

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Compared to most other areas of finance, venture capital is practiced as more of an art, as opposed to a science. For that reason, it’s often said that VCs learn the business best through an apprenticeship model, under the wing of a more experienced pro. The art of venture capital also means that for entrepreneurs raising it, there isn’t one definitive playbook which can be used as a guide.

What A VC Orders for Breakfast Says

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One of the things that surprised me most about venture capital when I got into the business is how much VCs seem to like to meet for breakfast. VCs usually typically reserve dinners for portfolio companies’ CEOs and board members. And “doing lunch” doesn’t happen that often because VCs don’t like going out of the office mid-day much. But breakfast for venture capitalists is an open free-for-all for all sorts of networking meetings and conversations.

The Golden Age of the Boston Internet Entrepreneur

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There are a couple classic archetypes of internet/software founders, including the genius college student cooking up something quirky but ultimately disruptive in his dorm room who launches his company straight out of undergrad.

The Right Question(s) to Ask VCs about Their Availability of Capital

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Most first and second pitch meetings with VCs are fairly lopsided, where entrepreneurs spend the bulk of the time sharing their businesses, rather than being a true exchange of both parties in developing a relationship. However, there is typically (and should be plenty of) time for founders to ask VCs questions about their approach and working-style to help determine if there’s a mutual fit.

Our Newest NextView Team-Member: Jay Acunzo

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Rob, Lee, and I couldn’t be more excited to share that as of Monday, Jay Acunzo has joined NextView as our Director of Platform and Community. Jay joins us from HubSpot, where he was a senior manager on the marketing team, specifically leading the blog and content strategy. In his Boston-based career, he’s also worked for Google and local startup Dailybreak, in addition to co-founding the community group Boston Content which has grown to hundreds of members.

Your Office Space is the Face of Your Startup

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Your office space is the face of your startup. Not only does it communicate an outward message, but like a face, a startup office provides insight into what’s going on underneath the surface. A startup’s space tells a story to everyone who is involved with a company spending time there: founders, employees, investors, and (potential)

(First Annual?) List of Go-To Early-Stage Service Providers in the NextView Ventures Boston Portfolio

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Recently, we surveyed our Boston-based NextView portfolio Founder/CEOs asking them about which service provider firms they’ve been using. The goal was to assemble data in order to share it back to our portfolio companies (especially the newer ones) so that they didn’t have to recreate the wheel in determining a short-list of firms to talk to when evaluating new options.

A VC Walks into Your Pitch Meeting Biased

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VCs rarely go into an entrepreneur’s pitch meeting with a completely open mind. Of course they have biases given their past experiences, like with any human interaction. More importantly, though, they have biases about whether or not they are going to find the opportunity attractive even before a word of the dialog has been spoken.

Three Magical VC Pitch Questions

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There are plenty of places throughout the blogosphere which talk about the typical VC meeting, delivering both advice and tips. (In In that corpus, a while ago I blogged about seven mistakes that entrepreneurs often make during a pitch session.) Along those lines, I think the proverbial 12-slide deck helps provide structure to a conversation where a multitude of information needs to be communicated in a short (often an hour or less) period. There’s a reason that’s become “standard.”

Optimizing Series A Fundraising Around…Partnership Buy-In

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Whether a startup’s initial Seed round is comprised of individual angels, seed-focused funds, larger VCs , or some combination of the three, when it’s time for the entrepreneur to raise a true Series A round, of course the goal is run a process to “optimize” it. You can find quite a bit of advice in the blogosphere about how to optimize around the most salient dimension: valuation.

Unusual Rounds of Early-Stage Funding & What to Know

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This is an excerpt from the original post, found on NextView’s blog, The View From Seed , launched this week. Find the original post here. As the VC seed market has institutionalized, especially over the past five years, there has emerged a prototypical seed round profile: $1M-$1.5M

Back to School – VC Homework Assignments

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VCs like to give out homework. They won’t call it that, though. But rather they use words like “diligence” and “information requests.” Just like in school, the homework can actually be productive, as in this case it can lead to a new customer or advisor. But just like bad teachers did in grade school, VCs sometimes assign completely useless busywork.

The Market Is Hot for Code Climate, NextView’s Newest Investment

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When Chad Pytel introduced me to Bryan Helmkamp , CEO/Co-founder of Code Climate , I knew that I had to pay attention. Chad is the CEO of thoughtbot, a consulting firm that makes web + mobile apps for early-stage startups. The two companies had been working together for a while, especially as both are deeply embedded within the Ruby on Rails developer community, with a strong following for their respective offerings.

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How to Find the Perfect Startup Job: Part I "Start with 'When'"

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Much of the VC blogosphere commentary about startups covers venture and angel financing with advice focused on company founders. But most people in the startup game aren’t VCs nor are they founders (yet)… but rather they’re employees of startups.

A Choir of Angel Investors Sing Different Parts

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We at NextView Ventures often invest in a startup’s first round alongside other funds; either seed stage focused ones like ourselves or larger traditional firms. Just as often, however, we’re investing alongside individual angel investors who are participating in the round as well. Angel investors come in many shapes and sizes, however. And it’s not always easy to recognize the pros and cons of taking money from individual investors, or how to even seek them out in the first place.

Authenticity is Experience

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People ask us at NextView all of the time: “What is the typical profile of an entrepreneur in your portfolio?” Subtly behind that question is often one about the experience-level of the founders. The answer, however, doesn’t fit into a neat soundbite. We have and will continue to fund young entrepreneurs in their twenties – and as my partner Rob Go likes to say, we’re proud of it.

Overly-Direct Feedback to VC Pitches

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When I first started in the VC business in 2004, I usually shared some reactions with entrepreneurs whenever we passed on pursuing an investment, but I admittedly erred towards communicating generic thoughts that were fairly non-specific but perhaps mildly helpful. After a few years into this role, however, I developed a style and approach where I always try to share some type of real meaningful constructive thoughts as to why an opportunity wouldn’t be a fit for my firm.

Pull the Plug or Keep Searching for the Believer? When Fundraising is Tough.

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My partners and I at NextView talk a lot about how fundraising is about finding the true believers rather than convincing the skeptics. The energy that it takes persuading someone who starts with a bias not to invest is much better suited searching for additional prospects who want to believe in what you’re building.

Super Pro-Rata Rights Aren't Super

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I recently received a email from an entrepreneur who I know with a genuine question about terms of his financing: " How do you guys at NextView feel about one of our investors holding super pro - rata rights for the next round?" We at NextView Ventures have more recently seen super pro-rata rights introduced by other investors in a couple of the rounds which we've participated, and have started to see a pattern emerge of the consequences of this insertion.

A New Dawn for Consumer Internet Acquisitions

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Over the past decade, VCs have been lamenting about the poor state of the IPO markets and that the number of real potential acquirers for consumer internet startups has dwindled down to a handful, if that.

Start Your Marketplace Engines

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At NextView Ventures, we have a number of companies in our portfolio which are “marketplace” businesses, where buyers and sellers meet to exchange a good or service. And along the way we’ve met with or observed a larger number of seed-stage startups attempting to start them. All of these companies face the challenge of the marketplace cold-start problem : simultaneously attracting both sellers and buyers to generate enough liquidity so that meaningful transactions can result.

Searching for the Kinect Killer App

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We at NextView have been thinking about and looking for investments in seed-stage startups which leverage the megatrend of transitioning computing away from a standard fixed-web PC world. Of course that includes “mobile-first” applications and companies which ride the adoption of tablet devices (more on those in upcoming posts). But this exploration also includes alternative user-interfaces and inputs, like gesture controls.

How to Find the Perfect Startup Job: Part III "Selecting the Right Venture"

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Evaluating a startup as a prospective employee is tough, especially when you compare to VCs. Venture capitalists have an information advantage – startups are required to be fully transparent about everything before a VC invests in it during weeks if not months of diligence, but prospective employees are limited to just a few questions they ask during a series of interviews with only a few people at the company.

Our Investment in CustomMade: Riding the Next Wave of E-Commerce in High-Consideration Shopping

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Over the past fifteen years on the internet we’ve seen a few waves of e-commerce innovation. From the initial humble beginnings of simply selling books online, to shopping/pricing comparison engines for electronic and other feature-laden items, to this current wave of “ social commerce ” which includes local merchants’ deals propagated by friends’ recommendation-driven purchases.

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How to Find the Perfect Startup Job: Part II "Sifting Through a Sea of Companies"

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Once you’ve figured out whether you want to find a very early stage startup or a late stage one (the topic of my first post in this series ), the real hard work begins. There’s a sea of information, both in the blogosphere and residing in the heads of everyone your informal network, which an individual job-seeker needs to wade through to find strong startup and the right role in it. My advice: search for heat, but don’t follow - evaluate.

Do Startup Location Matters Even Matter?

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About a year ago, I wrote a post about how office space is the face of a startup – it communicates both an outward message and provides insight into what’s going on underneath, as the physical environment in which startup employees work inevitably match the company’s story and culture. Recently I’ve been thinking that it’s not just the space of a startup itself which matters, but that perhaps also the location of that office which matters as well.

The Startup Offsite

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When was the last time all of your startup’s management team came together to take a step back from day-to-day minutiae and think big picture? I think it’s actually incredibly valuable for startups to occasionally, and regularly, have offsite planning sessions. Unlike at “big companies,” a startup offsite isn’t about a boondoggle, it’s not about fancy hotel rooms, nor is it about silly team-building exercises so dilberts in accounting can interact with dilberts in marketing.

VC Fundraising is Neither a Sprint nor a Marathon

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A lot has been written for entrepreneurs about optimizing a venture capital fundraising process, but one aspect which isn’t discussed very often is the pacing of it. Two (seemingly contradictory) maxims that are often repeated in this context are: “it goes slow until it goes fast” and “time kills all deals.”

Beer Kegs and the Future of Venture Capital: What It Means for Entrepreneurs

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Last September I wrote a post outlining my view of the venture capital industry: increasingly evolving like the beer industry as it continues to mature. Large VC firms resemble Budweiser-type macrobrews, competing based on scale and brand with a standardized product across multiple geographies, sectors, and stages.

A Beer Drinker's View of the Venture Industry

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Most VCs drink beer, but how much do they realize that their industry is increasingly resembling that of the beer industry? Forgive me if I start a bit theoretical. The famed business strategist Michael Porter described a set of successful general strategies which firms employ to achieve a sustainable competitive advantage: differentiation strategy and cost leadership strategy for those firms with a broad market scope, and a segmentation strategy for those with a narrow market scope.

VC Ground Game

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Conventional wisdom says that the best way to meet with a venture capitalist is to get a warm introduction. While it’s a good rule of thumb, it’s not entirely true, which I’ve blogged about previously.) However, there’s another way that I’ve seen entrepreneurs use mutual connections that’s even more impactful than a warm introduction: a proactive inbound reference.

Are you an Inventor or a Founder?

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As a VC, I end up meeting some amazing people of many different backgrounds and profiles. But there are two categories of people which are tightly correlated, but distinctly different. The difference between what I’d call an “Inventor,” someone who has many ideas for businesses to start, and a “Founder,” an entrepreneur who starts a company, is subtle. Many of the qualities of the former are necessary, but not sufficient attributes, for the latter.

Time & Money - Fundraising for VC When It’s Natural

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When is the right time of the year to fundraise for a venture round? There’s a lot of conventional wisdom disguised as insight which entrepreneurs follow about optimizing the timing of their fundraising. It’s correct in principle, but in reality should be used as a guide rather than as a rule. I hear all of the time that “you shouldn’t fundraise in the summer (especially August) because VCs are all on vacation.”