Entrepreneurial Density
I’ve been throwing this term around for a while and thought it was worth writing about, as I believe that understanding entrepreneurial how density can shape an entrepreneurial ecosystem is very important. But first, a link back to some ideas around entrepreneurial communities in general. My partner Brad literally wrote the book about this (highly recommended if you haven’t read it already). But the very quick summary is that great entrepreneurial communities are build on the basis of a few key tenets (Brad writes about these in much more detail in the book, which – again – you should read) …
February 26, 2016· 4 min read
What the current markets are and are not telling us
In response to a comment to my post earlier this week about the Profit Imperative, I rattled off some ideas about the current state of the markets. I thought it was worth sharing as a full post (I’ve edited and expanded on the original comment). There are clearly headwinds in the markets – I’m not at all suggesting that there aren’t. And we may be in a period of strong negative pricing pressure in both the public and private markets. As you know, markets tend to perpetuate themselves and pendulum. This cycle of overreacting is how business and market cycles seem to work. Without a doubt we’re in an environment of increasing volatility and that volatility alone may spook some investors. Price shifts at the top of the market, starting with the public markets and quickly spreading to the public market investors who had been dipping into the late stage private markets and continuing from there, will and are clearly changing pricing across all stages of private market financings. …
February 17, 2016· 4 min read
Welcome to Foundry
I send a note to each new company that I work with at Foundry that sets up what I hope will be the key tenants of our working relationship. I thought it might be fun to post it publicly – I think it gives meaningful insight into how all of us at Foundry work with the company in which we have an investment. I’m psyched to be moving forward with our investment! I thought it would be helpful to send a few thoughts on working together – I do this with all of the new companies I work with. It will take a little bit for us to get a natural cadence going but the thoughts below frame my thinking on how to work with me/Foundry. …
February 16, 2016· 3 min read
The Profit Imperative
With the markets crashing around us and the sky once again falling I thought it was time to revisit a few fundamentals and perhaps more importantly share some what what we’re now seeing in the private funding markets. Growing Profitably. Let’s start with what I labeled the Growth Imperative a few months ago in a post, where I pointed out 1) that investors were (over) valuing growth and 2) that when this changed it was going to change quickly (and in a separate post said: “when the growth imperative shifts to a profit focus, companies with high burn and weak operating metrics can get stuck in the lurch.”). It always amazes me how quickly the markets can shift and how rapidly investors change their mind set. But they do, and they are right now. We’re seeing lots of market data points that suggest that the private markets have shifted dramatically to a Profit Imperative, overnight eschewing high growth/high burn with no line of site to profitability and favoring companies that are growing more slowly but doing so profitability or with a clear path to profitability. There’s an increased focus on key metrics – especially those core metrics that drive the spend/growth curve such as LTV/CAC and months to pay back CAC. …
February 10, 2016· 3 min read
Introducing Foundry Group Next
This was also posted on Brad Feld’s blog and a similar announcement is up on foundrygroup.com as well. Over the years at Foundry Group we’ve built an extensive network of companies. While we’ve invested in some of these directly, this actually represents the smallest set of companies that we are involved with. We have also invested indirectly in many others through our investment in Techstars. Yet another, and much larger set of companies, come from our investments in other venture funds. …
December 9, 2015· 5 min read
Boulder needs to VOTE NO on 300 and 301
Below is from a post we just put up on the Foundry blog. It’s critical in this election that the business community in Boulder takes a stand for progress and against closing the doors to the city. The two issues below are of great importance to the city of Boulder. So is electing a strong and reasoned City Council. I’m supportive of OpenBoulder’s approach to that and they have great information on the candidates they’re backing. In particular I’ve been helping my friend Bill Rigler with his campaign and would encourage you to be sure to include him as you vote. He’s a thoughtful, progressive leader who will bring great energy and mindfulness to our city. …
October 16, 2015· 4 min read
This may not be the bubble you’re looking for
At great risk of wading into a debate where there’s no winning, I thought I’d present a few pieces of data that suggest that we’re not exactly in a market bubble right now. Massive caveat here: I’m not trying to predict the stock market. I’m just following my own advice. Plus I agree with my partner Brad, who said recently, “I think everyone will have an opinion and no one will have any real idea,” about what’s going to happen in the stock market (this in an article that appeared after just two days of a down market). But the data are important, so let’s at least pay attention to what’s actually going on. From there you can form your own opinion. …
September 15, 2015· 3 min read
Charts of the Day – The complexity of raising Series A
The charts of the day comes from a new Mattermark report on the current pace of financing. Both relate to the pace of seed funding in the US and the challenge of raising Series A financing. The first chart shows the pace of deals (measured by number of rounds) by category: Pretty hard to miss the huge blip in Seed/Angel deals in 2013 (but really from 2011 and continuing through 2015, with a peak at 2013). Most of you already knew this intuitively, but seeing it in black and white (at least for me) was eye opening. And while there are more Series A deals being done every year, they’re not even coming close to keeping up with the pace of Seed deals. From an ecosystem perspective this is both what you’d expect and ultimately a good thing. We’ve certainly seen markets where too many companies passed through each funding stage and ultimately that had terrible consequences for the market, for investors and for founders. The best markets are those that are acting rationally and efficiently. We may even be running a bit hot from that perspective (subject of a different, upcoming post, by the way). From the perspective of a Seed funded founder, this should be a clear warning sign that it’s not going to be easy to raise your Series A. In fact, if you look at the trend line of Seed companies “graduating” to Series A, you can see in stark relief the challenge ahead of you’re a Seed funded founder. …
September 8, 2015· 3 min read
The growth imperative (but beware)
First off, a note of apology. It’s been months since I’ve posed here. Not for lack of desire – more about some combination of crazy busyness and lack of proper prioritization. I miss it and am going to try to step it up. This is a post about the importance of growth, about the current market environment and a note of caution if the growth imperative changes rapidly to the profitability imperative. …
September 4, 2015· 4 min read
Why Companies Fail
I’ve touched on aspects of this topic before, but thought it was worthy of a full post. Companies in the venture business fail all the time. As I wrote last year, the majority of venture rounds fail to return capital. With all the hype one reads in the startup press these days, that fact can be easily lost. So we know that startups fail all the time, but why do they fail? Here are some common pitfalls based on our experiences (and here I’m referring not just to Foundry portfolio companies, although all of these lessons apply there as well, but also our observations of the broader markets). …
April 2, 2015· 6 min read