The Breakout Tech Company Of 2017

For a while, on this blog, I attempted to pick one startup for that year which truly “broke out” of its shell. Dialing back the clock, one could say 2011 was Uber and Airbnb; in 2012, I wrote about Stripe; in 2013, I wrote about Snap; in 2014, I prematurely said there were none but then backtracked when Slack exploded; in 2015, I didn’t write one, and in 2016, my thesis was the big tech incumbents would grow even more powerful from the web’s and mobile’s network effects that startups wouldn’t even have the chance.

Now with 2017 nearing the end, I’m back to the point where I can point to this year’s tech breakout company: Coinbase. I know, it’s likely an obvious pick, but I unpacking “why” is a fun exercise I’ll attempt below.

Right Person(s): Founded by Brian Armstrong and Fred Ehrsam, blending backgrounds in Continue reading "The Breakout Tech Company Of 2017"

The Story Behind My Investment In Perlara

Almost two years ago, I met a founding team during Y Combinator batch. It was in a field I haven’t invested in before, but I have spent time in during a previous life and career. We met for coffee on the Embarcadero, and while my “life sciences lexicon” is quite rusty, I somehow managed to carry on an entire conversation and even (I hope) earned the respect of the founding scientists for being able to recall some of the core elements of why their company, Perlara, had a chance to make a big impact.

What was able to recall from my previous life in the world of life sciences? I remember that while traditional pharmaceutical companies needed to develop drugs to address large markets, a new wave of biotech firms emerged that would be able to more efficiently identify and serve less “popular” afflictions, often referred to as orphaned diseases. Continue reading "The Story Behind My Investment In Perlara"

The Story Behind My Investment In Optimus Ride

About a year ago, thanks to an investor friend who, in this particular case, shall remain nameless (but you know who you are, and thank you!) was kind enough to tip me off about a great team he met on the east coast but one that he couldn’t invest in. Often investors only take referrals from other investors if that introducing investor has invested him- or herself; here, this was a close friend, and it was a very interesting company. I’m glad I took the referral.

That is how I came to meet the team from Boston’s Optimus Ride. This week, Optimus Ride announced a large Series A investment led by Greycroft. You can read more about that news here. And, read this great piece by Xconomy on how Optimus fits into the landscape.

I was lucky to be involved in the seed last year, a round led by Continue reading "The Story Behind My Investment In Optimus Ride"

Podcast: The Backstory Of Raising Haystack IV (The Full Ratchet)

As my Podcast 2017 Tour continues, Nick Moran from Chicago’s The Full Ratchet was kind enough to have me on his show again a second time. Two years ago, I was a guest on The Full Ratchet discussing the intricacies of how seed-stage companies graduate to institutional Series A rounds. For version 2, in this episode, Nick and I dissect my earlier post on the process (and emotions) of raising a first-time institutional VC fund — I process I tried to capture in this post earlier this year.

The feedback to that post a few weeks ago has been deeper than I had imagined. Folks also listened to Harry Stebbing’s recent pod with me. And, they should listen to this one with Nick, too — Nick’s podcasts are longer (this one is about an hour) and Nick goes through every detail on his notes page. He knows the right questions Continue reading "Podcast: The Backstory Of Raising Haystack IV (The Full Ratchet)"

My Second 20 Minute VC Appearance: The Mechanics Of Raising A First Institutional VC Fund

About a year and a half ago, I had my first experience on as a guest on Harry Stebbings‘ famous podcast, The 20 Minute VC. In that older episode, we mainly covered the importance of individual and firm branding in today’s ecosystem. Fast-forward to today, Harry was kind enough to have me back again, and this time, as Harry is getting even better as an interviewer and expanding his own knowledge of the business (his brain feels encyclopedic!), there’s a fresh new episode with me on that was released today.

Click here to listen to today’s new episode on iTunes, or click here to listen on your desktop browser.

As the number of smaller VC firms seems to increase each year with no end in sight, Harry thought it would be interesting for his growing audience to hear more about the backstory of how a new Continue reading "My Second 20 Minute VC Appearance: The Mechanics Of Raising A First Institutional VC Fund"

“Leveling Up”

I have been emailing Haystack founders a bit more often with some stream-of-conscious thoughts, and many of them have encouraged me to publish them publicly. Below, I was thinking about how relatively easy it is (in the Bay Area) to raise a seed round versus raising from larger institutional VCs, and how that’s connected to my own experienced of raising small VC funds with individual LPs but then what I had to do to make the transition to an institutional capital base. Here’s the original email, to what I add a few suggested concrete tips for company founders to consider when attempting to make this transition.

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Hello Haystack founders,

This a post for seed-stage founders only. It is not for founders who have gone on to Series A or those founders who don’t seek institutional VC dollars. As always with these emails, please delete, disregard, or ignore if not Continue reading "“Leveling Up”"

Notes From The 2017 Cendana MicroVC Summit

Yesterday, I attended my fourth Cendana Micro VC Summit in San Francisco. As I’ve done in years past, I wanted to briefly summarize how I perceived the mood of both LPs (the money source) and GPs (those who allocate to founders) in today’s current environment. [For a look back on my notes from previous years, click on either 2014 or 2016.]

Briefly, and in no particular order, here’s what I thought about in finding patterns from the panels and chatter:

1/ LPs seem more resigned to the fact that exits will take longer, perhaps never materialize. Think about that. After years of being on stage asking for quicker exists, the data has come in and unless someone holds an LP position in a fund with an outlier exit, these are simply really hard to come by and manufacture right now. It will be interesting to see what this implies Continue reading "Notes From The 2017 Cendana MicroVC Summit"

How To Transform A VC Fund Capital Base From Individuals To Institutional LPs

Lots of people have raised small VC funds. There are more startups, and there’s more LP capital from various sources to meet that demand. After the rise of institutional seed funds in the late 2000’s, we’ve obviously witnessed a pure explosion of new (mostly seed) fund formation, with seemingly no end in sight. Many of those 400+ microVC funds (sub $100M) are also trying not only get bigger, but also trying to convert their LP capital base from mostly individuals to mostly traditionally institutional capital. It’s a heavy lift to make that conversion. While I would never give advice on how to do this, as I’m still learning and each individual case is very different (each fund manager is his/her own special snowflake!), I can share a bit about how I prepared myself for it, how I launched my campaign, and how it all closed. My hope is that Continue reading "How To Transform A VC Fund Capital Base From Individuals To Institutional LPs"

Brief Thoughts On VC Fund Management

If you’re a new or relatively-new VC, you simply must download or stream this new 20 Minute VC interview of Michael Dearing of Harrison Metal (download here). Harry Stebbings does a great job with this one. There are two key reasons to spend the time to listen to this — One, Michael is obviously known to be one of the Valley’s pure outstanding investors, and two, as he rarely opines so publicly, the wisdom he shares toward the end of this podcast with respect to fund management is gold. While a new investor can raise capital, build a network, and pick companies with somewhat relative ease, the art of managing a fund, portfolio, and multiple funds and companies across rounds and markets is very difficult to just pick up. Instead, fund management takes time, requires making mistakes, needs mentorship and guidance, and so forth. For me personally, it Continue reading "Brief Thoughts On VC Fund Management"

Brief Thoughts On VC Fund Management

If you’re a new or relatively-new VC, you simply must download or stream this new 20 Minute VC interview of Michael Dearing of Harrison Metal (download here). Harry Stebbings does a great job with this one. There are two key reasons to spend the time to listen to this — One, Michael is obviously known to be one of the Valley’s pure outstanding investors, and two, as he rarely opines so publicly, the wisdom he shares toward the end of this podcast with respect to fund management is gold. While a new investor can raise capital, build a network, and pick companies with somewhat relative ease, the art of managing a fund, portfolio, and multiple funds and companies across rounds and markets is very difficult to just pick up. Instead, fund management takes time, requires making mistakes, needs mentorship and guidance, and so forth. For me personally, it Continue reading "Brief Thoughts On VC Fund Management"

Who Startups Truly Compete With — Each Other

When a founding team is raising institutional money — either an institutional seed or Series A/B round — those founding teams may have a slide in their pitch deck which shows the competition in their market or sector. This is often referred to as “the competition slide.” Yet, while many investors do want to know what other incumbents and upstarts are competing in the space, oftentimes the startups pitching miscalculate who their real competition in that moment is. For instance, say an education marketplace company is about to pitch a firm for their Series A. That team may assume they’re competing for investment dollars against other education marketplaces who seek money. It’s slightly true, yes, but what is often more true on the ground is that startup is actually competing with every other single investment opportunity an investor sees on a daily or weekly basis.

I’ll illustrate with an Continue reading "Who Startups Truly Compete With — Each Other"

The Story Behind My Investment In IronClad

Sometimes, picking a company to invest in is just easy. The hard part is getting in. About two years ago now, I met Jason Boehmig of IronClad during YC’s Summer 2015 batch (before Demo Day). One of my founders who was in YC singled out Jason as outstanding. Jason’s pitch was exactly what I love to hear, paraphrased: “I was an attorney (at a prestigious Valley fund). I taught myself to code. I quit my job. I founded this company to bring systems intelligence to the legal department of enterprise companies and beyond.” I had to pitch Jason to let me in and also to make a gracious consideration for me. I started to help Jason with his round immediately and got working some customers. Jason put me to work right up front but he was easy to work with. In fact, I would say he’s one of the Continue reading "The Story Behind My Investment In IronClad"

The Story Behind My Investment In WorkRamp

About a year ago, a few ex-Box friends mentioned one of their colleagues “Ted” was starting a new company. That was enough for me to swing into action. I googled around and targeted “Ted Blosser,” found we had a few close friends in common, and a few email requests later, found myself sitting in his makeshift office near Facebook HQ. In the first meeting, it was clear that Ted was driven, had a vision for the product he wanted to build, and took a sober approach to testing and refining his hypotheses as he built. We talked about general investment strategies, not related to his company, “WorkRamp“, and I liked Ted so much that I offered to start making customer introductions for the product. Generally, I like this way of getting to know a founder and product. I prefer to make introductions in advance of investing Continue reading "The Story Behind My Investment In WorkRamp"

The Story Behind My Investment In WorkRamp

About a year ago, a few ex-Box friends mentioned one of their colleagues “Ted” was starting a new company. That was enough for me to swing into action. I googled around and targeted “Ted Blosser,” found we had a few close friends in common, and a few email requests later, found myself sitting in his makeshift office near Facebook HQ. In the first meeting, it was clear that Ted was driven, had a vision for the product he wanted to build, and took a sober approach to testing and refining his hypotheses as he built. We talked about general investment strategies, not related to his company, “WorkRamp“, and I liked Ted so much that I offered to start making customer introductions for the product. Generally, I like this way of getting to know a founder and product. I prefer to make introductions in advance of investing Continue reading "The Story Behind My Investment In WorkRamp"

The Story Behind My Investment In Pillow

As I began to raise my first fund back in early 2013, I reached out to my friend Satya to see if he’d like to make a small LP investment. We met up in The Mission and I walked him through what I was trying, and he said he unfortunately couldn’t and it was related to something new he was doing with his old friend. He couldn’t participate and share more details about his new thing. It was too bad, but I understood, and was now curious what new company he’d start so I could invest! Fast-forward a few weeks, and he sent me a note right before the news about Homebrew hit. “Ah….so that’s why!” Always looking out for those around him, I began investing and Satya was kind enough to share a new deal he was working on with Homebrew. It was there that I mean Continue reading "The Story Behind My Investment In Pillow"

The Story Behind My Investment In Pillow

As I began to raise my first fund back in early 2013, I reached out to my friend Satya to see if he’d like to make a small LP investment. We met up in The Mission and I walked him through what I was trying, and he said he unfortunately couldn’t and it was related to something new he was doing with his old friend. He couldn’t participate and share more details about his new thing. It was too bad, but I understood, and was now curious what new company he’d start so I could invest! Fast-forward a few weeks, and he sent me a note right before the news about Homebrew hit. “Ah….so that’s why!” Always looking out for those around him, I began investing and Satya was kind enough to share a new deal he was working on with Homebrew. It was there that I mean Continue reading "The Story Behind My Investment In Pillow"

The Story Behind My Investment In Skysafe

Back in Q1 of 2016, when the technology sector went through a sizable (but apparently now forgotten) correction fueled by sharp hits to public tech stocks, I was happily investing into the very early-stage ecosystem, and in particular, deeper technology opportunities. It was at that time when my friend Julian introduced me to Grant Jordan, a co-founder of Skysafe. I looked up Grant’s background and read up on his work. I was 90% convinced to invest in him after a bit of online sleuthing. In the first few minutes of meeting Grant, the decision was made. Grant’s industrial expertise was off-the-charts and focused in such a way that his approach to Skysafe became, literally, a no-brainer decision. Grant had grown up as a computer tinkerer, to put it mildly, studied CS, security systems, and EE at MIT, went on to work as a core engineer at Wright Patterson Air Force Continue reading "The Story Behind My Investment In Skysafe"

The “Summer Of Semil” Returns To StrictlyVC

It’s that time of year, when Connie Loizos of StrictlyVC takes off in search of east coast summers and long walks on the beach — leaving StrictlyVC’s readership without its veritable columnist and correspondent for a few weeks. While Connie’s work and voice cannot be substituted for, I am excited to get back at posting (and writing more frequently on my site, as well) this summer. Earlier this year, I took the opportunity to pose a Q&A of a number of limited partners (LPs) in venture funds about a series of questions (see here for those). This time around, I wanted to pursue a set of Q&As with folks who have founder VC firms as well as founders of startups. Specifically, the founders of startups will talk about how they were able to secure Series A funding and the lessons they’ve learned about fundraising along the way. The Continue reading "The “Summer Of Semil” Returns To StrictlyVC"

The Story Behind My Investment in Protocol Labs

Almost three years ago now (summer of 2014), a friend said I should spend some extra time looking at a new small company that had formed out of Stanford. I remembered seeing the company at Y Combinator’s Demo Day in August 2014. The presentation was memorable for the scope and clarity of the company’s mission. I got the introduction to the founder and back-channeled him a bit before meeting — everyone I talked to didn’t just say he was smart, they all paused and said something to the effect of, “No… I mean, he’s different. He’s really, really smart.”

Those endorsements became quite evident when I met Juan Benet. You can read about his background here, or even more interesting, I’d encourage you to watch some of many his speeches and lectures on YouTube here. After meeting Juan the first time, I wanted to invest. Looking back on Continue reading "The Story Behind My Investment in Protocol Labs"

The Story Behind My Investment In CARMERA

Years ago, when I was working at a startup, I made my first trip down to SXSW. It was a blast. That weekend, I happened to stay in a house along with a bunch of folks from Disqus. I knew Daniel, the founder, a bit from before, as most people writing blogs online knew and respected Disqus. Daniel was in Austin with some of his team, including Mat (now at Slack), Tyler (now at Bebo), and Ro (the founder of CARMERA). We had a blast that weekend and those folks from Disqus were both gracious and a lot of fun to hang out with. Fast-forward a few years later, I stayed in touch with the team from that trip. Though I haven’t talked to Daniel or Mat in some time (Hello, guys!), I did spend time with Tyler as he was thinking about his next moves. And, I was Continue reading "The Story Behind My Investment In CARMERA"