A week ago I had just gotten home after a month in Homer, Alaska. I was totally chilled out – I worked plenty in July but had very little physical human interaction with anyone other than Amy. I’m sitting here in my Boulder condo today thinking about the entrepreneurial tour de force that was the last six days. I think I interacted with more different people each day than I did cumulatively over the previous 30 days in Homer.
The Boulder New Tech Meetup double header (Tuesday and Wednesday) started things off. The second Boulder Open Angel Forum delivered. Then we had TechStars Demo Day which was amazing, followed by an Open House at Jive Software (they acquired TechStars Boulder 2007 company Filtrbox last year and are growing like crazy), a Return Path board dinner at Black Cat, and the the TechStars Afterparty at the Draft House. Friday saw a Return Path board meeting and lunch with the folks at Return Path followed by TEDxBoulder on Saturday. Oh, and in between I had piles of “regular work.”
There were numerous blog posts and tweets from the week, but my favorite post about an event from the week is up on the True Ventures web site titled On The Road With TechStars Boulder. In addition to all the locals, there were a huge number of folks from out of town who participated in the various events and I smiled a big smile when I read the post.
Last night during the TEDxBoulder intermission break, I had a few quiet moments to myself as I wandered around the grounds of the Boulder Chautauqua. I was filled with a deep satisfaction about the amazingness of the people of Boulder. While there are lots of other great places in the world, I am most at home here. And it’s good to be back home.
I attended the second Open Angel Forum in Boulder tonight. Simply put, it was dynamite.
This is an intense week for seed stage stuff in Boulder as TechStars Demo Day is tomorrow where 11 new companies are having their coming out party. The Boulder New Tech Meetup had a special double header (Tuesday and Wednesday) where six teams practiced their pitches to a room of 300+ people on Tuesday followed up by the other five on Wednesday. The streets are crawling with angel and early stage investors – local and from other parts of the country – and the vibe feels great as tomorrow is the big day.
I had high expectations for Open Angel Forum after the first one in Boulder in the spring. Jason Calacanis came up with a great format when he created Open Angel Forum and David Cohen has done an awesome job of hosting and coordinating the two Boulder events.
The format is ideal. 20 qualified angel investors – to qualify you must be active making angel investments (at least three in the past year). Six companies all raising seed rounds ($1m or less). Dinner and drinks paid for by sponsors. No fee to either the entrepreneurs or the angels. Casual setting (we did it in the TechStars Bunker) – some mingling before it got started, followed by five minute pitches + five minutes of Q&A for each company. The whole thing took an hour – just the right amount of time.
All six companies – Pavlov Games, Rapid.io, Adapt.ly, Awesomebox, PlaceIQ, and BrowseAndPay did excellent jobs. They were each high quality and totally fundable and I heard several commitments happen during the evening. I left about 45 minutes after the pitches ended – the event was still in high gear and with Jason leading a table full of angels and entrepreneurs in a game of Texas Hold’em while the beer drinking and discussions continued.
The thing that is so cool to me about this is that it’s a super high signal to noise ratio – all the companies had clear, tight, and relevant pitches and the entire audience was accessible angel investors. No BS, no posturing, no fees for anything – just entrepreneurs and angels doing their thing.
Over two days, 17 early stage software / Internet companies are having high quality exposure to angel and seed investors in Boulder. And on Saturday, we have TEDx Boulder. It’s good to be back in town.
On June 20th, I declared that I was going to try A Month of Mac. I took my Macbook Pro (an older model from about 18 months ago) up to Alaska, left my Lenovo x300 in Boulder, and went native Mac.
I’m typing this on my brand new spiffy MacBook Pro 2.66 GHz Intel Core i7 with 8GB RAM, with a 500GB solid state hard drive. I can’t figure out why I’ve been so stubborn about really switching to the Mac. This is a beautiful computer.
The key to this switch was that the native mac apps (Mail, iCal, and Address Book) sync seamlessly with Exchange. So I don’t have to deal with the abortion that is Entourage but at the same time I don’t have to mess around with our email server and impact everyone else in our organization. That’s sweet. I had a feeling this would work this time since it works flawlessly on my iPhone and iPad, and it did. The only thing missing is Tasks, but I started using Evernote instead which actually worked even better than the Outlook Task manager.
So – no Parallels or Fusion – I don’t even have a Windows image on this machine at this point. I didn’t use Windows a single time in the last month and now that I’ve rewired my brain for Mac shortcut keys I think it’d be a pretty amusing thing to watch.
I’ve found peace and happiness with iWork as a replacement for Microsoft Office – it’s more than adequate for what I do. MarsEdit is a spectacular blog post editor, Chrome works happily on the Mac as does Skype and TweetDeck, and Adium replaced Digsby. Pogoplug works just like it did before – all my files are where I want them to be. Best of all, my iPhone actually does what it’s supposed to with iTunes.
Did I say that this is a beautiful piece of hardware? Sleep mode – check. Flawless super high resolution screen – check. Super fast everything – check. Find a piece of software you want to play around with – download and run.
The most remarkable thing was the transfer of all my data, applications, and settings from my old MacBook Pro to my new MacBook Pro. I connected them by Firewire. I restarted my old MacBook and held down the T key. After the transfer started, I went and had a meeting for a hour. I came back and my new Mac was set up exactly like my old Mac. Perfect.
Ross – you owe me $100.
Last week saw an explosion of discussion around seed investing, including plenty of negative comments around VCs as seed investors. While I agree that many VCs are crummy seed investors, I think there are some that are excellent seed investors. This prompted me to write a post titled AngelList Boulder and Some Thoughts on Seed Investing where I promised to write up some of my thoughts on how and why VCs could be good seed investors.
Before I got around to starting, there were three excellent posts that, if you are interested in this topic, are must reads. They are:
All three of these posts lay out clear points of view on the authors seed strategy. And importantly, Mark encourages all entrepreneurs to make sure they understand a VC’s seed strategy before taking money, which I strongly agree with.
Before I start talking about good and bad VC seed strategies, I thought I’d explain mine. For context, about 25% of the investments we make at Foundry Group are seed investments. But before Foundry Group, my partners and I were involved in many seed investments, both at Mobius Venture Capital. In addition, I’ve made many seed investments as an angel investor in two time periods,1994-1996 and 2006-2007, and seen many more through my involvement as a co-founder of TechStars. Our strategy has evolved from this experience and is different from my angel investor strategy (which I’ve explained in my post Suggestions for Angel Investors.)
As a VC, I do not differentiate between a seed investment and any other investment that I make. At Foundry Group, we are comfortable investing as little as $250k in a round (a seed investment for us) all the way up to $10m in a round. We think about each investment – whether it’s $250k or $10m – the same way, and commit to participating in the business for the long term.
Specifically, our seed investments are not “options on the next round.” We price our seed rounds as equity investments, always lead or co-lead (as Fred describes in Lead Investors, Dipshit Companies, and Funding Every Entrepreneur), and treat them the same way we would with a $10m investment.
I have three partners and all of us are involved in all of our investments. So, 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, we are all emotionally involved in the investment (a phrase you’ll see in later posts about this topic) which I believe is both beneficial to the entrepreneur and extremely important to the VC firm.
When we make a seed investment, we fully expect to invest at least the same amount that we invested in the seed round without thinking hard about it. One of our strongly held beliefs is that it often takes several years for a company to find its mojo and we are willing to work through the challenging first few years. As a result, we don’t believe that there is a particularly critical “go forward or not” decision point immediately following the seed round. Now, this doesn’t mean that the follow on round is blindly done – we are very internally critical of the progress a company is (or isn’t) making, but we try to firmly put ourselves on the side of the entrepreneur in this discussion and work together when things start off slowly, or differently, than expected.
At Foundry Group, we describe ourselves as being “syndication agnostic”. This means we are completely indifferent as to whether we fund something ourselves or with other VCs (e.g. each are equally happy situations.) In addition, we are equally delighted to co-invest with angels and super angels, or not. Basically, we are happy in any case, are making a decision to invest independent of anyone else, and defer to the entrepreneur on who they want to have involved.
Finally, we are deliberate about the areas we invest in (our “themes”). We see a ton of seed investment opportunities, but only invest in a few. Many of the opportunities we see are outside of our themes. We have consciously decided to only invest in areas we know well and think we can be meaningfully additive to and constrain our focus to these themes (although the themes expand and evolve with our experience.) This lens allows us to spend the vast majority of our time on companies we are either investors in or likely to be investors in, and limits our time “exploring lots of things that have a low probability of being an investment for us.”
Taking Mark’s lead from his post, I’m going to put up a more specific post on the Foundry Group blog that lays this out in a very specific way. I’ll also follow this post with some examples, as I’ve got seven to choose from: AdMeld, Gnip, Lijit, Mandlebrot, Next Big Sound, Standing Cloud, and Trada. And, in case you are wondering, here are two recent examples of how seed investments blossom: AdMeld Raised $15 Million Round from Norwest Venture Partners and Time Warner and Trada Raises $5.75 Million Round From Google Ventures.