A Deep Dive into What Has Really Changed in Venture Capital

Both Sides of the Table

I’ve heard a lot of people question whether there is too much money in venture capital chasing too few great deals. “We’re Others believe that new business models are emerging that could replace venture capital all together.

When Is the Right Time to Raise Outside Seed Capital?

View from Seed

The following is a real (but anonymized) email to us at NextView where a founder debates the timing of his seed raise: I met with someone today who said I should push to close a seed round before I launch the product. They also said it’s best to raise a seed (if you can) just before the launch so that you aren’t as dependent on the immediate results/traction and you can sell the vision a bit more. The post When Is the Right Time to Raise Outside Seed Capital?

[Checklist for Entrepreneurs] Critical Tasks to Complete After Raising Seed Capital

View from Seed

Raising venture capital at any stage of company growth requires tremendous effort from entrepreneurs. That drive to focus on helping customers and growing their companies is even more commendable than the ability to raise capital.

The Rise of Chinese Venture Capital – (Part 3 of 5)

Steve Blank

This post is about the rise of Chinese venture capital and how it helped build the countries entrepreneurial ecosystem. The Rise of Chinese Venture Capital. SBIR and STTR programs, the Torch Program’s funding for new ventures was limited to seed funding the front end.

Can Pre-Seed Capital Hurt an Entrepreneur’s Chances to Raise Seed from VCs?

View from Seed

In the last year or so, the debate over the definitions of seed versus pre-seed capital (sometimes called genesis rounds) has exploded. Much digital ink has been spilled about what dollar amount constitutes a pre-seed and how that might affect a startup’s ability to go raise a “normal” seed round from institutional investors. Is there an amount you see companies having raised, before they get to you, where you think, “These folks have already raised seed”?

The Rise of Chinese Venture Capital – (Part 3 of 5)

Steve Blank

This post is about the rise of Chinese venture capital and how it helped build the countries entrepreneurial ecosystem. The Rise of Chinese Venture Capital. SBIR and STTR programs, the Torch Program’s funding for new ventures was limited to seed funding the front end.

Got "Founder Fit?" If You Want Venture Capital, You Need It

Up and Running

A few weeks ago I spoke with Boris Wertz, founder of JustBooks, COO of AbeBooks and founding-partner of Version One Ventures. In ” At present, Version One Ventures portfolio includes startups from all over the United States and Canada. Boris Wertz. Image credit Flickr.

The Role Venture Capital is Playing in Online Schooling (Guest Post)

VC Cafe

Venture capital and other forms of seed funding have been crucial for the development of the best online colleges. Many smaller development firms receive seed funding to develop technologies used by public and private schools across America. By Estelle Shumann*.

Are Individual Angel Investors Starting To Get Tapped Out?

Feld Thoughts

“I’ve had a few conversations recently about how individual seed investors are getting kind of tapped out – for a variety of reasons, but in general it’s not that easy to find people who are still actively investing. Lots of talk about Series A crunch but maybe there is a seed crunch too?” There is also a huge amount of seed capital available from seed funds. Venture Capital Angel Investing capital market seed

What’s Happening Today That No One Sees?

Feld Thoughts

” When I go back a decade, we were just making the decision not to raise another Mobius Venture Capital fund. Venture Capital and entrepreneurship was dramatically out of favor. Early stage and seed capital was extremely difficult to find.

A Quality Benchmark for Accelerators: The Global Accelerator Network

Feld Thoughts

Provide some sort of seed capital to their founders. Accelerators business david cohen entrepreneur global accelerator network Seed money TechStars United States Venture Capital When David Cohen and I came up with the idea for the Global Accelerator Network (GAN) in 2010, we counted roughly 100 accelerator programs around the US that were founded following the Techstars model.

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The Silliness Of Recapping Seed Rounds

Feld Thoughts

A company raises $1m of seed money from angels in a convertible note with a $6m cap. So the new investment gets 60%, the founders get 39.9%, and the $1m of seed money gets 0.1%. As part of this, all of the seed investors get a chance to participate in the round prorata to preserve their ownership percentage. We have no interest in re-investing alongside a VC firm that doesn’t respect a $1m investment by seed / angel investors. Here’s the scenario.

Fund Raising is a Means Not an End

Steve Blank

If you don’t have scale as a goal then you shouldn’t be raising money from angel or venture investors, you should be getting a commercial or government small business loan.). • Search. A seed round can come from friends, family, Kickstarter, angels – and most importantly, early customers.

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Fund Raising is a Means Not an End

Steve Blank

If you don’t have scale as a goal then you shouldn’t be raising money from angel or venture investors, you should be getting a commercial or government small business loan.). • Search. A seed round can come from friends, family, Kickstarter, angels – and most importantly, early customers.

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Giving up the ghost early

David Cohen

There is four times as much seed capital in the venture market this year as there was 1 year ago. Because of this, it’s easier to attract seed funding than it has been in the past. The founders shut the business down, and either take a job or go out and start a new company with more of that plentiful seed funding. The thing I worry about is that the Facebook movie and tons of seed funding have made it almost too attractive to get into entrepreneurship.

Quickly Unpacking Two Recent Acquisitions (of Cylance; of PlanGrid)

Haystack

venture capital to date (more on this in a separate post), unfortunately relegating billion-dollar exits as “ho-hum” events to the technology crowd. 4/ The Big Winners: Cylance raised around ~$280M in financing, with large equity stakeholders being Khosla Ventures, Fairhaven, and Blackstone. 1/ A Pre-Seed Reminder: According to Crunchbase, PlanGrid was founded and went through Y Combinator in 2012. The company only raised a bit over $1M as seed capital.

Rolling Closes Versus Synchronous Closes

Haystack

I have participated in many different types of seed rounds, but based on my experience of participating in over 100 seeds over the last 5+ years, I’d say the majority of those seed rounds (including around YC) were orchestrated by the founder to close on a specific date. For any investor raising their own funds, you may have to chase down capital calls for each investment. ” Career Culture Technology Venture Capital

How I Got My First Round of Seed Funding

Up and Running

It’s a simple truth that every entrepreneur knows: Getting the capital to start or grow your business is often harder than running the business itself. Venture Capital and Angel Investors Fundraising is hard work.

The Seeds Have Changed: An Epilogue to The New Venture Landscape

K9 Ventures

Note: This is a long post and it’s based on reflecting on a couple of years of observations in the venture industry. In June of 2013, as I was putting together my thoughts for the K9 Ventures annual meeting, I decided to sit back and reflect on what I thought was happening in “Venture Land”. This over-funding at the seed-stage created an increased supply of companies looking for Series A. The risk here is what I refer to as the curse of over-capitalization.

Startups getting caught in No Man’s Land

BeyondVC

Increasingly I am seeing many startups who were ably seed funded get caught in "No Man's Land" between the seed round and a true Series A round led by a venture capitalist. This is happening because there are way too many companies raising seed capital but not enough executing their way to a Series A. This can happen for many reasons including not raising enough capital in the seed round to begin with and of course not getting your product out the door.

Startups getting caught in No Man’s Land

BeyondVC

Increasingly I am seeing many startups who were ably seed funded get caught in "No Man's Land" between the seed round and a true Series A round led by a venture capitalist. This is happening because there are way too many companies raising seed capital but not enough executing their way to a Series A. This can happen for many reasons including not raising enough capital in the seed round to begin with and of course not getting your product out the door.

Knowledge Is Power: Convertible Note Financing Terms, Part II

Gust

At least one well-known Silicon Valley venture accelerator is using a document referred to as a “ convertible security ” rather than “convertible promissory note.” In most cases, an early stage startup will raise seed capital from more than one investor. In practice, given that (1) investors’ interests are mostly aligned most of the time, and (2) Series A investors generally put a much larger amount of capital at risk, this approach seems to work relatively well.

Timing: When to raise seed funding.

Scalable Startup

Raising seed capital is a tricky business. Most are making major mistakes in their approach when seeking capital. High growth startup companies need seed money to get things going. Without seed funding most startups seeking high growth won’t make it.

Immigrants and the Startup Visa

thebarefootvc

At the end of that period, if the business has generated at least five full-time jobs, attracted $1 million in additional capital, or hit $1 million in revenue, the founder would be granted a green card. The proposed legislation is backed by more than 160 venture capitalists and seed capital investors, including Khosla Ventures and Mohr Davidow Ventures.

Disrupting VC

thebarefootvc

As a venture capitalist, I am always looking for highly innovative, disruptive businesses. I am thrilled to see how the seeds first laid in the mid-2000s have taken root and we now have a vibrant and growing startup community that will produce the tech companies of the future. I helped launch NYCSeed in 2008 in response to the lack of seed funding available in NYC. Now we have an overabundance of capital at that stage.

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High Risk + Founders First + Boston: The Atlas Venture way

Fred Destin

In response to a question focused on his philosophy around seed investing, Fred Destin is clear on his priorities. “We We try and exist as the best source of seed capital that we can to as many entrepreneurs as possible. We want to be the best seed investor in Boston.

Why Startups Face Increasing Competition In Raising Series As And Bs

Gust

By Tomasz Tunguz , Partner at Redpoint Ventures. To get some sense of the patterns, I analyzed 917 companies from seed through Series B over the past 14 years, using Crunchbase data. I’ve divided the companies into cohorts by the year they raised their seed investment. The chart shows the narrow funnel seed stage companies must pass through to raise a series A. First, the number of seed investments in the Crunchbase data has increased by 4x in 4 years.

The Future of Health: How We Think About Investing in Healthier Living for Everyday People

View from Seed

We don’t seed companies that are developing drugs or medical devices that will require FDA approval. It’s a world that doesn’t fit our seed-focused model and fund strategy. Outside of life-sciences, we’ve noticed something interesting emerging: There is a huge dearth of seed capital for health care services and software-driven health-tech companies. The seed ecosystem for health companies is much less robust than in traditional software.

When It’s Darkest Men See the Stars

Steve Blank

the wave of semiconductor startups in the 1960’s/70’s, the emergence of venture capital as a professional industry, the personal computer revolution in 1980’s, the rise of the Internet in the 1990’s and finally. The New Structure of the Venture Capital industry.

5 Reasons “Boring” Details Are As Essential As “Big” Ideas For Entrepreneurial Success

YoungUpstarts

A new entrepreneurial venture requires a great deal of assistance in terms of headhunting, business coaching, venture capital etc. A venture should be run and managed only by people who have genuinely bought into and share the entrepreneurial vision. By Jenny Q.

How DogVacay Literally Saved my Thanksgiving

Both Sides of the Table

He wanted to work in venture capital and I was new to the industry and in no position to hire anybody. He turned to Mike Jones at Science who was newly set up as an accelerator of sorts or a venture studio. Without DogVacay my Thanksgiving would have been ruined.

Why Your Startup Hasn’t Gotten Funded

YoungUpstarts

Let’s face it, the rules for getting a startup funded at the seed stage aren’t very clear. Note: When I say “seed stage startup,” I’m specifically referring to software/app startups that are eitherpre-product or early product. TVR: The traditional way of raising seed funding.

Innovation, Change and the Rest of Your Life

Steve Blank

the wave of semiconductor startups in the 1960’s/70’s, the emergence of Venture Capital as a professional industry, the personal computer revolution in 1980’s, the rise of the Internet in the 1990’s and finally. The flood of risk capital into startups at a size and scale that was not only unimaginable at its start, but in the middle of the 20 th century would have seemed laughable. First, Venture Capital and angel investing is no longer a U.S.

Separated at Birth: Techstars and Startup Weekend

David Cohen

Techstars remained involved informally – we hosted and attended events, promoted them, and ultimately funded many companies that emerged from these weekends through our accelerators and venture capital funds.

Entrepreneurs are Everywhere Show No. 29: Ajay Kshatriya and Steven Cohn

Steve Blank

Before co-founding Biota Technology , he was an investor and entrepreneur-in-residence at Seed Capital , a investing in science-based innovation. Switching from venture capital to startup founder required a different mindset, Ajay said: All day in a VC firm, you’re saying ‘no’.

Entrepreneurs are Everywhere Show No. 29: Ajay Kshatriya and Steven Cohn

Steve Blank

Before co-founding Biota Technology , he was an investor and entrepreneur-in-residence at Seed Capital , a investing in science-based innovation. Switching from venture capital to startup founder required a different mindset, Ajay said: All day in a VC firm, you’re saying ‘no’.

6 Strategies When Searching For Angel Funding

Business Plan Blog

With venture capital becoming more and more of a bygone dream for early-stage companies, many startups want to turn to angel funding to raise capital but don’t know where to start. Download our free Raising Capital from Angel Investors eBook.

TinySeed Applications Open January 18th

Software By Rob

We are happy to speak with you at any revenue level, but somewhere in the $150k-range is when founders may start to look for seed capital. Traditionally, venture capital has consisted of unicorn-hunting.

JOBS Act to Change Startup Funding Landscape

ReadWriteStart

The most important belt that the Jumpstart Our Business Startups Act loosens concerns the amount of capital a new company may raise through the sale of securities in a 12-month period. Crowdfunding is an efficient way for entrepreneurs to raise seed capital," the editors wrote.

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What Future for Accelerators?

Both Sides of the Table

I had witnessed a number of early-stage tech startups in LA raise seed capital from the Bay Area and relocate. We formed a partnership with some of our favorite early stage investors and friends including Jim Andelman at Rincon Ventures and Peter Lee at Baroda. And Jim & I went on to raise several more venture capital funds in our day jobs. As we started to focus on what each of us wanted to do, Adam raised his venture capital fund – Plus Capital.

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Here’s How to Do PR on a Budget

Both Sides of the Table

Contrary to popular opinion I actually believe crowd-funding is best used after seed capital or venture capital. So my simple advice is to start PR as early as possible (and certainly earlier than most of your investors will advise) when you have your head around your product plans and are well into execution (or ready to launch) precisely because your recruiting, seed funding and initial user base may depend on it. I raised a small seed round.

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Startup Fairy Tales and Other Tall Tales That Venture Capitalists Tell

Growthink Blog

With this seed capital – more often than not totaling between $100,000 and $1,000,000 - the company accomplishes a number of key technical milestones, gets a beta customer or two, and then goes on a "road show" to venture capitalists around the country for capital to “scale” the business. This venture capital financing - usually between $3 and $10 million - is the first of a number of rounds of outside investment over a period of three to five years.

The 5 Key Stages of Equity Funding

Growthink Blog

When seeking equity investments, the source of capital is, for the most part, tied to the stage of capital being raised. You see, equity capital is raised in stages or rounds. Pre-Seed Funding 2. Seed Funding 3.