Brad Feld

Month: September 2011

We recently invested in an exciting company called Sympoz. They are searching for a great head of marketing.

Sympoz, based in Denver, was founded in May 2010 by an experienced team. They are growing rapidly, generated over a million dollars in revenue in their first year, and are now looking for an experienced VP of Marketing to join the founders as an integral member of the executive team to lead all aspects of marketing.

If you are interested and think you fit, please email

The official TechStars Store is up. Shirts, hats, hoodies, and stickers. And of course the books Do More Faster and Venture Deals. What – no sweatbands? Cohen – we need sweatbands. C’mon man.

Don’t forget to check out the new TechStars website while you are at it. And apply for one of the upcoming programs, including the brand new TechStars Cloud program



I spent the day in Kansas City yesterday at the Kauffman Foundation for my first Startup Weekend board meeting. I’m very stingy with my non-profit board activity after deciding in 2005 to get off any non-profit board that wasn’t focused on entrepreneurship and until yesterday the only non-profit board I’m on is the National Center for Women & Information Technology.

I was at the first Startup Weekend in Boulder in July 2007. It was created by Andrew Hyde (he was the Community Manager for TechStars at the time). While I didn’t stay the entire weekend, my partner Seth Levine and I spent a bunch of time there on Saturday, had a blast, met some new people who became long term friends (my first extended experience with Micah Baldwin where Vosnap was created), and paid for a bunch (all of?) the food, which I recall included a lot of beer, chips, and bagels. In was a completely awesome experience.

Andrew ran about 80 Startup Weekends around the world before selling Startup Weekend to Marc Nager and Clint Nelsen in 2009 who were quickly joined by a third partner Franck Nouyrigat. Marc, Clint, and Franck turned Startup Weekend into a 501c(3), got a bunch of smart people involved as advisors such as David Cohen (TechStars CEO), expanded rapidly, got a grant from the Kauffman Foundation, and are now launching an even broader effort called the Startup Foundation.

My view is that the goals and behavior of Startup Weekend, going back to the very beginning when Andrew Hyde conceived it, are completely aligned with my view that entrepreneurial communities can be created in many places and a key attribute is activities that engage the entire entrepreneurial stack from aspiring entrepreneurs through experienced entrepreneurs and include all of the various constituencies around the entrepreneurial ecosystem. I saw that in Boulder in July 2007 and I see that when I hear of other people that have participated in Startup Weekends around the world.

I’m psyched to join some other super smart people on the board, which includes Carl Schramm, president and CEO of the Kauffman Foundation; Steve Blank, serial entrepreneur and author; entrepreneurship lecturer at U.C. Berkeley and Stanford University; Greg Gottesman, managing director at Madrona Venture Group; Laura McKnight, president and CEO of the Greater Kansas City Community Foundation; and Nick Seguin, manager of entrepreneurship at the Kauffman Foundation.

If you’ve never done a Startup Weekend, try one. I bet it changes your life.

I’ve often said that two emotions that are irrelevant for an entrepreneur are fear and anxiety. My favorite quote from Dune is “Fear is the mindkiller” and many people get confused and don’t understand the difference between panic and urgency (where panic is just a more extreme version of anxiety.)

Several weeks ago I spent an evening and a day in Colorado Springs. I participated in a number of entrepreneur-related events, but my favorite was a talk that I gave to a freshman class at University of Colorado at Colorado Springs with John Street. John is a long time friend and one of the first entrepreneurs I met when I moved to Boulder (I actually met his wife Mary through YEO’s Birthing of Giants program in 1993 when I was still living in Boston.) In addition to being a good friend, John is a very successful entrepreneur who has had plenty of ups and downs and ups, but has perserved through it all and created several important companies.

The class that we spoke to was a freshman seminar about “Being Your Own Boss.” John and I quickly told our stories and then spent the majority of the time answering questions. One of them was something like “what characteristics have made you successful.”

John went first and stated the two most important things about him were that he is “tenacious” and “oblivious”. Having known John for many years, tenacity defines him. He simply does not give up. While he can appear stubborn, he’s a learning machine, open to any feedback, constantly asking questions – especially when faced with challenges, and searching for better approaches on his quest to solving any problem he encounters. I view this as a perfect example of a tenacious entrepreneur.

I was puzzled by oblivious until John explained it. He said that he’s oblivious to why something can’t be done, or why something is difficult, or why someone doesn’t want something to happen. That made perfect sense to me and is a characteristic of many of the great entrepreneurs I’ve worked with over the years.

I followed up John with my rant on fear and anxiety. I explained that these are normal human emotions that often are helpful, especially when you are in physical duress (fear = fight or flight) or struggling to understand something new or uncertain (anxiety). However, when viewed from a business perspective, my view is that “fear is the mindkiller” and “anxiety slows you down at a moment when you should increase your urgency.”

I added two new thoughts to my view of what makes a great entrepreneur – tenacity and obliviousness. Think of your favorite entrepreneurs – do these apply?

StillSecure has been nailing it in the service provider segment with deals with XO, ViaWest, CoreSite, and others recently. StillSecure fundamentally believes that service providers – telcos, datacenter, cloud providers – will be the channel to market for security solutions and I agree. They have built an amazing set of solutions for colocation and dedicated server environments and have solutions that can apply to some higher-end cloud users. Today they are announcing a new host-based firewall management solution in conjunction with SoftLayer – a leader in the cloud market. Aimed at all cloud users, StillSecure’s new solution is the start of a major initiative for the company and is also a new category of solutions.

As most cloud users know, securing their systems is incredibly hard. The solutions are either just “cloud-washed” products that aren’t a fit or they are so expensive that they cannot fit within the elastic cloud model. StillSecure has taken nearly 12 years of history and experience and have built a product from the ground-up with the cloud users’ customer experience and profile in mind.

The solution, called Cloud SMS, is a free today and will expand into premium offerings very quickly. StillSecure and Cloud SMS are in the SoftLayer Tech Partner Marketplace, being promoted to SoftLayer’s 23,000 customers. The two companies are also beginning to explore offering the complete spectrum of StillSecure’s managed security services into SoftLayer’s broader offerings.

I’m excited for the StillSecure and SoftLayer teams – building a secure cloud is an incredibly important goal and one that many companies can take advantage of. Do yourself a favor – if you have any cloud instances out there, go download StillSecure’s cloud security product and please secure them.

On Friday, I saw a tweet from Chris Sacca about super pro-rata rights that said “Seeing a lot of VCs cram super-prorata terms into deals. Feels uncool to me. Any good arguments for why it’s helpful to entrepreneurs?” I quickly responded to Chris on Twitter with “@sacca just say no to super prorata” and then opened up a WordPress window and scribbled some thoughts for a draft post on that that I was planning to put up Monday morning (now).

On Sunday, I saw a phenomenal post from Mark Suster titled Why Super Pro-rata Rights are Not a Good Deal for Entrepreneurs. In it, he covers many of the reasons I was planning to cover. He also does a great job of setting up how pro-rata and super pro-rata rights work. It’s a must read post for any entrepreneur doing a seed or early stage financing.

Mark talks about why super pro-rata rights are suddenly appearing regularly, but I think he’s being too nice about it. He says:

“Often it’s when a larger fund (e.g. non seed / micro VC fund) wants to put in $500k (less than their typical investment) but wants to have a marker on your company if you end up being super hot. In my mind, it’s almost like a dog pissing on its territory. Read: it’s an option for that investor and a super expensive one to you, the entrepreneur.”

This behavior is not limited to large funds. I’ve had two investments over the past year where smaller funds tried to argue for super pro-rata rights in the seed round. In one case they argued that they were going to do more work than the other two investors (which included me); in the other case they stuck with the 20% argument but said “we have to have 20% after the next round in order for us to want to work on this investment.” In both cases the entrepreneurs ultimately decided not to include the firm insisting on super pro-rata rights in the round.

I’ve also starting seeing this ask all over the place with the “new” seed programs that large funds have. This is a subset of the case Mark is referring to, but it’s actually more annoying than Mark makes it out to be. In the last two years, many large established VC firms have created “new” seed programs. These are firms that have historically positioned themselves as early stage investors, but in some cases explicitly stopped doing seed rounds while in others simply drifted away from them. Suddenly, they are back, with seed programs aimed at making high velocity investments in brand new companies.

I applaud these firms, but only if they are doing their seed investing in a way that is consistent with how they position the activity as “entrepreneur friendly.” Specifically, if you are entrepreneur friendly and you do a seed investment, you do not need or even want a super pro-rata right. Instead, you should earn the right to invest above your pro-rata in the next round through early engagement with the company, hard work, and active help for the company. This behavior is “entrepreneur friendly” and is the spirit of how many firms are talking about their seed programs (e.g. we make decisions quickly, we treat you like any other company we invest in, and we help as much as we can.)

Now for firms that insist on super pro-rata rights, they should call it how it is. Which is “we are tossing a tiny amount of money in you now but we want to reserve the option to own a lot more if you are successful.” Mark calls this dynamic out specifically in his post, but doesn’t put it on the VCs. It doesn’t actually bother me that a VC might want to take this approach; I just don’t think an entrepreneur should ever accept it if he has any other choices.

In many cases, I’ve seen the VC request for super pro-rata rights collapse in the context of a hot seed investment. The entrepreneur holds all of the cards in this case and should use them, as it gives the entrepreneur many more options in the next round. If the VC insists on the super pro-rata right, make sure you really understand what is going on, as this negotiating posture (and philosophy) on the part of the VC will likely surface again in the future.

To all my VC friends – take a page from the super angel playbook. If you want to do seed investments, or have a formal seed investment program, model it after the super angels, especially the ones who have raised small VC funds. These guys make small investments, bust their asses for the companies they invest in, and often get opportunities to invest more in the next round. In a lot of cases, they don’t have the capacity to do anywhere near what you could do, but in all cases I’ve been involved in, the entrepreneurs have fought for these seed investors and as someone who doesn’t feel the need to be the first money in a company, I’ve always tried to accomodate the request for more than pro-rata in the context of the new financing I’m leading.

And yes Chris – it’s definitely uncool.

If you follow our investments, you know that one of our core themes is Human Computer Interaction. The premise behind this theme is that the way humans interact with computers 20 years from now will make the way we interact with them today look silly. We’ve made a number of investments in this area with recent ones including Fitbit, Sifteo, Orbotix, Occipital, and MakerBot.

Last week Bloomberg did a nice short piece on Sifteo. I’m always intrigued on how mainstream media presents new innovations like Sifteo in a five minute segment. It’s hard to get it right – there’s a mixture of documentary, interview, usage of the product, and explanation of why it matters, all crammed into a few minutes combined with some cuts of the company, founders, and some event (in this case a launch event.)

I find the Sifteo product – and the Sifteo founders – to be amazing. They have a lot of the same characteristics of the other founders of the companies in our HCI theme – incredibly smart, creative, and inventive technologists who are obsessed with a particular thing at the boundary of the interaction between humans and computers.

We know that these are risky investments – that’s why we make them. As we’ve already seen with companies like Oblong and Fitbit it’s possible to create a company based on an entirely new way of addressing an old problem, product, or experience with a radically different approach to the use, or introduction, of technology. Having played extensively with the beta version of the Sifteo product, I’m optimistic that they are on this path.

If this intrigues you, order a set of Sifteo Cubes today (it has just started shipping.) In the mean time, enjoy the video, and our effort to help fund the entrepreneurs who are trying to change the way humans and computers interact with each other.

One of the jokes in my little universe is that “every time I hear the word ‘marketing’ I throw up a little in my mouth.” I’ve been joking about this long enough that it’s become conventional wisdom that I hate marketing. Yet, if you look at many of our successful investments, they are extraordinarily good at marketing and some people suggest we (Foundry Group, me) are also good at marketing.

Thirty minutes ago, Chris Moody – a long time friend and COO of Gnip – sent me an extremely thoughtful email titled “Food For Thought”. I read it, thought it was 100% correct, and asked if I could reblog it verbatim both as (a) an explanation of how I actually should / do think about marketing and (b) an example of how I learn through direct feedback.

Chris – thanks for taking the time to write this. You nailed it. The way I articulate how I think about marketing will be permanently different going forward.

At this point I’ve probably heard/read most of your basic philosophical points on the various aspects of building a successful business. I agree with most of them of course. However, there is one area where I’ve consistently felt that you have under represented your true feelings and it feels like your general input on the topic has been mostly nonconstructive. I’d like to try to help change that for the good of the broader entrepreneur community (and to make you look even smarter).

The topic is marketing. I have no doubt missed some brillant thoughts you’ve offered to the community and I’m sure you’ve provided countless pieces of good advice to individual entrepreneurs in one-on-one situations. But, the sound bite version I’ve heard from you on a few occasions goes something like this “I hate traditional marketing. Focus on building a great product or all the marketing in the world won’t matter.” When I think about the first time entrepreneur, this response feels particularly unhelpful. And, the second part of the quote could be applied to almost all aspects of a startup business including sales, finance, etc. If you don’t have a great product, none of the other shit matters.

And yet, when I see how Foundry Group approaches marketing and when I look across your portfolio companies, I see a very common thread around how you guys approach marketing. I would characterize the theme as “marketing through thought leadership.” In more basic terms it is expressing marketing ideas via “this is why we are doing what we are doing and why it is important” instead of “hey, look at me.” Have a new product feature? Sure blog about the feature, but spend way more time on why the feature is important to your overall purpose and beliefs.

To illustrate the point, I’ve recently talked to/interviewed a few current/former people from Rally and ReturnPath. When I ask them “what is the most significant thing you did from a marketing perspective to accelerate the business” the answer across the board has been “we focused on being a thought leader in our space.” As you well know that is the same approach we are taking at Gnip and I see it in many of your other portfolio companies too. Not sure it is always a conscience effort by the companies, but it seems to be pretty consistent across the portfolio..

When I think about FG itself I see tons of “marketing activity” but most of it could also be just be labeled: thought leadership. You sponsor conferences around topics that you care about. Your blog post are rich with “here’s why did it and why it matters” instead of “here’s what we did”. In fact, your whole theme based approach is really about thought leadership focused in a few areas. Foundry Group clearly believes that startups have the power to change the world. You guys spend countless time and effort expressing your opinions on this topic. You write books to support your beliefs. If you only talked about what you do with your startups “we invested in x, we sold y”, the conversation would be short and have a limited audience. Instead, you talk about what you believe and why startups matter. As a result, you have built a real following around people that care about the topic.

If I were going to create the Brad Feld sound bite for Marketing it would go something like this “Don’t do marketing. Focus on becoming a thought leader in your space. Talk everyday with your customers, perspective customers, partners, and the world about why you do what you do and why you think it is important. The reality is you can only talk about what you do one or two times before people think ‘got it’ and stop listening. But, if you talk about what you believe and point to countless examples that exemplify your beliefs , you can build real engagement with people who care/believe the same things.”

Not trying to put words in your mouth. Just saying that the actions that I see don’t match the words that I hear and I think there is easy opportunity to change that for the better.

Today, TechStars announced that they’ve raised $24 million from a broad syndicate of investors to fund an additional $100,000 for every TechStars company going forward. The investors include Foundry Group, IA Ventures, Avalon Ventures, DFJ Mercury, SoftBank Capital, SVB Financial Group, RRE Ventures, Right Side Capital Management and TechStars alumni.

There are lots of good articles on the news – two of them are at TechCrunch (Startup Incubator TechStars Raises $24M, Increases Funding For Each Company By $100K) and Launch (TechStars Offering Extra $100K to All Companies with New $24M Fund.)

One of the principles of TechStars has been to be as inclusive as possible for the VC and angel investors in the communities in which we run programs. To date, there are over 75 VCs and angels that are funding TechStars programs in Boulder, Boston, Seattle, and New York. There are many more who have invested in individual TechStars companies.

With the launch of the new TechStars Cloud program, there are now over 60 new companies a year going through TechStars and getting launched. At $100k / company, TechStars has raised enough to fund each company with the incremental $100k for the next three to four years (that’s a hint that there will be more programs coming.)

When I think about all the amazing investors – and the hundreds of mentors – involved in TechStars, I’m deeply humbled to be a part of it.