Fundraising

I recently was in an email thread where a Black founder had a powerful and clear response to the question from one of her corporate partners. The question was: How can our (the corporate partner’s) team better support diversity in our work, particularly in our sourcing, diligence, and onboarding efforts? The entrepreneur responded with a long explanation that was a brilliant and extremely helpful perspective for me. It follows. I think one of my core experiences, and a truth that we all have to grapple with, is that programs like yours should be thought of like higher education in 1960, or getting into a NYC Specialized High School today. ...

Yesterday we closed our fifth fund, Foundry Venture Capital 2016, L.P. As with all four of our other funds, it’s a $225 million fund. In 2007 we raised our first fund – Foundry Venture Capital 2007 . We subsequently raised a $225 million fund in 2010 , another one in 2013 , and a late stage fund in 2013 . Our 2013 fund was originally raised in 2012, but we didn’t start investing it until 2013 so we renamed it 2013. ...

We are in a cycle again where how much you raise is the story. It’s what the press likes to write about (e.g. Company X raised Y from A, B, and C). Now that everyone is overly focused on unicorns, the headline number on the valuation (e.g. Company X raised Y at a valuation of Z from A, B, and C) has crept into the story on big rounds. While this makes for press release fodder and ego gratification, it’s of very little use to entrepreneurs. There’s no real story there. No understanding of the human dynamics behind the financing. No understand of what actually went down. No underlying metrics that drive the financing. No real perspective on how people thought about things and the choices they made. Just happy talk focusing on the dollar raised. Zero educational value around anything. ...

I hear some version of this one all the time. “We will never need another financing.” “This financing will get us to cash flow breakeven.” “This is our last financing before we become profitable.” It’s probably bullshit. There are so many reasons companies raise more money in the future that even making an assertion like this is generally nonsensical. But even if you, as the founder, believe it, you are still probably deluding yourself. ...

One of the dynamics of going away for a month off the grid is that you come back to a wall of data. I’ve been absorbing it the past two days and it’s fascinating to ponder how my brain is processing it versus the normal continuous flow of information on a real-time basis. I’m not a predictor. As we enter the time of year where every media-related thingy publishes it’s “best of 2014” and “predictions for 2015” lists, I simply pass on participating in all of them and read none of them. So – I’ll start with that – this is not a prediction, rather it’s a hypothesis, which is as long as there isn’t a cataclysmic macro event, Q115 financing activity is going to be insane. ...

I know many entrepreneurs who feel that VCs have played them, gamed them, deceived them, or bullshitted them. But this doesn’t only happen to entrepreneurs. VCs play this game with VCs all the time. One of our deeply held beliefs at Foundry Group is that there is no value in bullshitting anyone. We screw up a lot of things, make plenty of mistakes, and often look back and say some version of “oops.” But we never bullshit each other or bullshit anyone we work with. ...

I was in the bathroom this morning catching up on all the blogs (via Feedly ) that I hadn’t read this week since my head was in a bunch of other things. I came across one from Nic Brisbourne (Forward Partners) titled I’m a stock picker. I wish he had called it “This Unicorn Thing Is Bullshit For Early Stage Investing” but I think he’s a little more restrained than I am. ...

On April 16, 2013 I wrote a post about the horrific tragedy at the 2013 Boston Marathon . Here’s how it started: At 3:55pm yesterday I cried. I was getting ready for a Google Hangout back to my office with my partners and I noticed something about an explosion at the Boston Marathon on twitter. I did a quick scan of Twitter, clicked through to a few links, and realized a bomb had gone off near the finish line. ...

For all of you out there who are wondering, Amy is doing fine. We’re in Boulder, she’s happy, in some pain, but enjoying the delightful impact of Percocet, and making her way through MI-5 Season 8. Thanks for all of the support, emails, and kind words. I’m about to head out for a five hour run (broken into three separate segments) in preparation for the 50 miler I’m doing in April after I help her take a shower (which ordinarily I would be excited about), but first I thought I’d write some thoughts about a call I had with an entrepreneur yesterday. ...

Every day I get emails from folks either raising money or telling me about their new idea and asking for feedback. The conventional wisdom is that VCs rarely invest in things that reach them randomly (or “over the transom” in someone’s VC vocabulary – I can’t for the life of me figure out why that phrase hangs around.) However, this isn’t the case for us as 10% of the companies we’ve funded in the past two years were initially from “cold call” email inquiries (Brightleaf and Organic Motion ). So – I’m very happy to get a steady stream of random emails – keep them coming! ...