Beware of ASSHOLE VCs
Before Foundry makes an investment we perform extensive due diligence. We meet with various company managers, talk to other people in industry to get their take, call current and prospective customers, exercise our own network of contacts to get background on the idea and team, perform reference checks on key management, etc. While this process varies, we’re always diligent before entering into what we view as a long term partnership with the company. …
July 27, 2011· 4 min read
John Mack on the inside of the financial crisis
A friend recently sent me a link to a talk John Mack gave at Wharton that I think is absolutely fascinating. I’ve read a number of books and articles about the key events surrounding the financial crisis but I find these sorts of first person accounts so much more interesting. And I think Mack is an extremely engaging person. I started my career at Morgan Stanley as an analyst in 1994 and actually had a great personal encounter with Mack that was probably my most memorable moment working in the banking industry. I was just starting my 2nd year at MS and was holed up in an empty office editing a draft of an offering document. Having undoubtably slept only a few hours the night before, I’m sure I was hardly the picture of professionalism with my slightly long hair, undone tie and stocking feet up on a chair, when in walks the head of my group, the head of the Investment Banking Division and John Mack. Mack says to me: “Do you mind if we use this conference room for a few minutes?” Startled, I respond something to the effect of: “Of course. I was just using this for a quiet place to review this document,” and started to gather my things. Walking out of the office, Mack calls to me and says: “I know a quiet place for you to read up on the 42nd floor.” (that’s the executive floor). I sort of chuckle but quickly realize that he’s serious. He introduces himself and picks up the conference phone: “Barbara [I’m making that up – I can’t remember his assistant’s name], Seth Levine is on his way up – can you please make him comfortable in my office.” Five minutes later I’m sitting in John Mack’s office. Alone. Reading (or trying to read, at least) and mark up a prospectus. And for context, at the time my apartment in NY was maybe 300 sq ft. Mack’s office was probably 8 times that size. I was sitting at a small round conference table, but the room also contained a sofa and chairs seating area, at least two desks and plenty of other things I was likely too nervous to notice. About 30 minutes later Mack comes back and proceeds to sit down and talk with me for probably 20 minutes. What did I study in school? how did I come to work at Morgan Stanley? how has my experience been? etc. The man is as engaging as he appears on this video. I can see why so many people are incredibly loyal to him.
July 6, 2011· 3 min read
Introducing Codespace – shared (free!) office space in Boulder for geeking out
One of the many things that makes Boulder a great city for start-ups is its incredibly collaborative environment (see posts on my love of Boulder here and here). From the willingness of mentors to help out TechStars companies, to collaborative efforts around recruiting great talent to our city, I’m constantly amazed at how many people are working to make Boulder an amazing place for businesses to thrive. Today there’s another new initiative launching to help young tech companies in our community – Trada is opening CodeSpace, a free co-working space dedicated to startup developers and software engineers. CodeSpace will be located in Trada’s downtown Boulder offices and will have over 2000 sq ft of space dedicated to the effort. …
July 5, 2011· 2 min read
Exit Numbers – $100M is rarer than you think
Fred Wilson put up a post today that grabbed a slide from a recent presentation Mark Suster gave at a Founder Showcase event. The chart (and Fred’s post) back up with numbers the qualitative argument I was making in my recent post on Pattern Recognition (I wish I had these data when I wrote my original post!). In my post I argued that while there is plenty of talk about a handful of high flying companies (Zynga, Twitter, Facebook, etc.) that vast majority of venture back companies can expect significantly more modest outcomes. In fact history suggests that a majority won’t even return invested capital to investors. All this talk about the stratospheric valuations of this small group of companies however has investors fundamentally misjudging the chance that their latest investment will do the same. As the chart from Mark’s presentation clearly shows, not only is it the extreme exception for a company to hit the kind of valuations that are getting all of the press attention but even hitting the $100M mark is rare. On some level I think we all know this, but seeing the numbers in black and white really puts a exclamation point on exactly how rare it is. And as Fred points out (as did I in my prior post), investing in early stage companies at the kind of valuations that are prevailing today is a losing bet… …
June 22, 2011· 2 min read
Pattern recognition
VC’s love to talk about their pattern mapping abilities. “We add more value because we’ve seen so many companies go through all sorts of situations before and we can quickly map whatever’s happening at your business to what we’ve seen in the past and leverage this experience.” Or so the logic goes. But what’s going on right now with early stage company valuations suggests that VCs may be poor judges of at least some of these patterns. Or at least that they’re incredibly human when it comes to estimating the likelihood of certain events actually happening. …
June 15, 2011· 3 min read
Entrepreneurs First!
A few years ago I was talking to a fellow venture capitalist about an entrepreneur he had previously backed. “That guy should love me!” he exclaimed, “I made him 50 million bucks!” And then moved on to some other topic which I can’t remember because I was numb with disbelief at his previous statement. He backed an entrepreneur who built a business that after a number of years had a very nice exit and he made the entrepreneur money? Obviously his logic is completely backwards. And while I don’t know that many VCs would express such an extreme view of that sentiment I do think that most believe that not only is a healthy VC ecosystem important for entrepreneurship to flourish but that VCs create that ecosystem. …
May 26, 2011· 2 min read
If you’re in the cloud you really need a parachute
NewImage.png Fred Wilson recently posted about his move to the cloud and the freedom that having his data always available has given him. More and more people and companies are freeing themselves from the constraints of desktop software and captive data stores in favor of cloud based applications and the freedom of readily (and always) available data. We recently went through a similar move at Foundry – although we haven’t completely moved to Google Apps for all of our documents and spreadsheets – and it’s been incredibly liberating. I blogged about my move to a Mac from a PC last year, but haven’t had a chance to follow that post up with a report on the more important move from a primarily client and desktop software based infrastructure to a cloud based one. …
May 25, 2011· 3 min read
Call List Manager – an app waiting to be born
I searched the app store recently for an app I was sure someone had come up with. But alas, no one had. So I thought I’d throw it out there in the hopes that someone wanted to take it on. Like many people I maintain a “to call” list. I do a lot of work over email, but I’m also on the phone anywhere between 5 and 12 hours a day and at any given moment I have a healthy list of people to get back to. I’ve tried different ways of managing this list – from putting them in as calendar reminders (works to create the list, but it’s not persistent enough) to using tasks (this has been the best option, although still lacking) to writing myself emails with lists of people I need to call back (this works for specific situations, but I need to refresh the email once I’ve actually connected with a portion of my list; plus its kluge). Add to this that I’m often running through calls while driving, which brings with it its own challenges of accessing these lists and their associated numbers (and what if I need to remind myself of context and have to look through emails or a calendar entry to find it?). Like everyone reading this, I’m an above average driver, but despite that it’s still not the best way to work while getting from point to point. …
May 12, 2011· 3 min read
Getting to know you
demographics.png You already know a lot about you. But I don’t. I sit at this end of the internets and type our posts on topics that I hope you’ll find interesting. And some portion of you tweet out links to posts that you like. And a smaller portion of you either comment on a post I’ve written or send me an email with your thoughts (all of these things – from just reading to any level of engagement – I appreciate!). But I don’t know a whole lot about you in aggregate. I use Google Analytics on the site which lets me see a little bit about where you come from to get to my site (and where you go after you’re done) but the information available is pretty basic. …
May 11, 2011· 2 min read
Your idea is overrated
I’m not going to rehash the “why I don’t sign NDAs” stuff that I’ve written about in the past (here it is if you want to see it), but being asked a few times this week to sign NDAs has gotten me thinking about the value of ideas. Actually, this is something I’ve recently been noodling on and my conclusion is that people 1) overvalue their idea on the front end of a project and 2) once something has become successful undervalue the day-to-day tactical execution that made the idea successful. …
May 5, 2011· 3 min read