Understanding a VC’s Seed Funding Policy is Critical

Both Sides of the Table

There has been much discussion about VCs doing seed funding in the past year. I’ve written about it myself (Is VC Seed Funding Dead?) and (Is There Really a Signaling Problem with VC Seed Funding?). Knowing What the Seed Funding Policy of your VC is.

TYLT Labs' New Seed Fund And The Promise Of Silicon Beach

socalTECH

Among those funds is TYLT Lab (www.tyltlab.com), which recently announced a new, $20M early stage investment fund specifically focused on companies here. We''ve also had a pretty wide range of check writing in terms of amount.

Putting the Pedal to the Metal at Amplify

From the Venture Trenches

Amplify provides seed stage capital to the tune of $50,000 to $150,000 in companies with a viable product that are demonstrating some degree of traction.

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Why Has Seed Investing Declined? And What Does this Mean for the Future?

Both Sides of the Table

Seed investments are down by any measure (funds, deals, dollars) over the past 3 years in deals < $1 million AND in deals between $1–5 million. why the hell has seed financing declined so much in the past 3 years?? thus the rise of “pre seed” investing).

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Putting the Pedal to the Metal at Amplify

From the Venture Trenches

Amplify provides seed stage capital to the tune of $50,000 to $150,000 in companies with a viable product that are demonstrating some degree of traction. Although the first draft of this post began when Kluge was a proud member of NextSpace; as of this writing we have moved to a bigger office to accommodate our expanding team. For the first three months of this year, I have had the pleasure of breathing the same air as the crew from Amplify , the Venice based accelerator.

What is the Definition of a Seed Round or an A Round?

Both Sides of the Table

Marc Andreessen kicked off another great debate on Twitter last night , one that I’ve been talking about incessantly in private circles for the past 2-3 years – what actually IS the definition of a seed vs. A-round. So VCs started writing some smaller A-rounds.

Understanding the Herd Mentality of VCs and How not to Let it Psyche You Out

Both Sides of the Table

Whether you’re fund raising from angels, seed investors and VCs?—?as I mention this because it’s critical that you not let the fund raising process psyche you out. Fund raising seems so easy for everybody else and you’re doing something wrong.

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This Week in VC with Rick Smith of Crosscut Ventures

Both Sides of the Table

We started this week’s show with a Q&A session where I answered viewer questions about fund raising and the VC industry. Heck, stick around and watch me discuss the seed funding debate that is going on right now and what is happening in the VC industry overall.

The Changing Structure of the VC Industry

Both Sides of the Table

The rise of “micro VCs” or seed-stage funds. The rise of alternative sources of capital (crowd funding and the like). Lower costs to start a business (95% reduction), many more companies created & funded by angels / seed.

How Many Angels is the Right Amount for a Startup to Have?

Both Sides of the Table

” I found myself nodding through all of it with quotes like, “Seed investing is the status symbol of Silicon Valley,” said Sam Altman. I save room in literally every deal to invite angels (or seed funds) to co-invest with me. Even if one disagrees with the premise, why would anyone feel the need to attack Mike for writing it? With strong leads (VCs, seed funds or large angels) there is an unwritten Pottery Barn Rule.

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Why You Don’t Want to Give Financial Information to All of Your Investors

Both Sides of the Table

We all know that funding markets have changed for startups. The trends are well understood: more angels, more seed funds, more crowdsourcing and so forth. In a funding round with 1 or 2 VCs and 15-20 angels or 4-6 seed funds if you gave every investor you financial information and performance metrics your proprietary information would increase in its probability of leaking out. I have publicly said many times that there is a positive to crowd funding.

Attention Startup Accelerators: Your Job Is Not Over After Demo Day

InfoChachkie

With top-ranked accelerators Lauchpad LA closing its doors and Y Combinator rebranding itself as a seed fund, it seems fair to ask the question, “Are Accelerators Dead?”. A version of this article previously appeared in Forbes.

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The Authoritative Guide to Prorata Rights

Both Sides of the Table

These tensions seep out in some angels or seed funds publicly or semi-privately deriding later-stage VCs for their “bad” behavior. Prorata investments rights given investors the right to invest in your future fund-raising rounds and maintain their ownership % in your company as your company grows and raises more capital. A day after I published this Changing Structure of VC article I noticed at least one “Angel Prorata Fund” on AngelList.

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Here’s How to Do PR on a Budget

Both Sides of the Table

In that article I talked about how PR drives: recruiting, employee retention, biz dev deals, funding and even M&A and that often “attribution” to your PR activities is unknown. This is somewhat changing in the world of crowd funding where people actually raise money so that they can build products but at a minimum your product design ought to be complete and ready to execute. I raised a small seed round. What do you do when you have finally raised seed funds?

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The Audacious Plan to Make Electricity as Easy as WiFi

Both Sides of the Table

As I’ve written about recently, at Upfront Ventures we started talking a couple of years ago about wanting to fund stuff with more meaning. One of her seed investors is Jonathan Triest of Ludlow Ventures who I really enjoy speaking to and trust his input.

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The Damaging Psychology of Down Rounds

Both Sides of the Table

If we count seed funds and large angels maybe that number goes up by 2x? ” (before fund raising). Yesterday I wrote a post about “ proprietary dealflow for VCs.”

What Most People Don’t Understand About How Startup Companies are Valued

Both Sides of the Table

Brad was openly writing about this and it felt like he was giving the VC playbook away for free! We write about $40 million of first-checks into new deals / year and about $40 million of follow-on investments. I better roll up my sleeves and help my companies get funded.”

Taylor Freeman of UploadVR on Building a Passionate Culture for Good

Tech.Co

We started traveling to Sundance and SXSW and these shows with awesome companies, but no one was writing about it,” Taylor said. The company caught the attention of investor from China and secured a seed-funding round around $1.5

Is @AngelList Syndicates Really Such a Big Deal?

Both Sides of the Table

” And even the venerable Fred Wilson weighed in with how people “ leading vs. following ” in funding rounds play different roles and have different skills. If you know, VCs end up writing sizable checks into their own funds, which is important in better aligning interests.

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Counting Angels

Steve Reich

If you can’t raise from a few strong angels, from seed funds or from a VC then raising from a ton (let’s say 20+) angels is a perfectly acceptable strategy. ” Everyone has a vision that one or two “Super Angels” will write million dollar checks and all will be well.

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What is it Like to Negotiate a VC Round?

Both Sides of the Table

In the old days VCs funded off of a “pre-money” valuation. In the old days there usually weren’t convertible notes on early-stage deals and there weren’t party rounds with 20 angels or 6 seed funds. If that’s the case I’d only own 18.18%, which wasn’t my expectation when I offered to fund the company. What I’ve found over the years is that this forces way more clarity on the entrepreneurs at fund raising time.

Some Career Advice for Aspiring Tech CEOs

Both Sides of the Table

The decision tree for being a startup CEO begins with whether you can sustain 12-18 months of little or no salary while you define your market, do research, build v1 of your product, raise seed funding, attract your initial team, get your first customers and test whether you have initial product / market fit or enough momentum to be able to raise a large round of capital. And one that you get to write.

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VC Confessions: We Passed On Twilio’s Seed Round

InfoChachkie

There are a number of reasons why Rincon Venture Partners passed on Twilio’s Seed Round. Thus, while we maintain a healthy degree of optimism, we begin each funding discussion knowing that most nascent startups are not worthy of an investment, until we prove them otherwise.

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Top 120 Startup Posts for 2010

SoCal CTO

500 Hats , January 10, 2010 Developing new startup ideas - Chris Dixon , March 14, 2010 Batch Processing Millions and Millions of Images - Code as Craft , July 9, 2010 jQuery Plugin: Give Your Characters a NobleCount - The Product Guy , March 23, 2010 How do the sample Series Seed financing documents differ from typical Series A financing documents? Some really great stuff in 2010 that aims to help startups around product, technology, business models, etc.

What Entrepreneurs Should do about Price Fixing

Both Sides of the Table

When I was fund raising for my second company we had agreed a company-wide deal with Salesforce.com to use our product. My advice: Do not mention the other VC firms, angels, seed funds, etc. update] Is Ron Conway a great guy with good intentions in writing the letter he did?

What’s the Real Deal with AngelList?

Both Sides of the Table

This is a blog post I really didn’t want to write. I didn’t want to write it because I have mixed feelings about AngelList. I didn’t want to write it because the bloggosphere doesn’t always do nuance well. So why I am writing it then?

So What is The Right Level of Burn Rate for a Startup These Days?

Both Sides of the Table

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. As I have pointed out in previous posts , 91% of VCs surveyed believe prices are declining (30% believe substantially) and 77% believe that funding will take longer than it has in the past. months for fund raising start to finish and make sure you have at least 6 month’s of cash if it takes longer.

A Chat With Kelly Perdew: Moonshots Capital And Its First Dedicated Fund

socalTECH

This morning, Moonshots Capital (www.moonshotscapital.com), led by Kelly Perdew and Craig Cummings , announced its first formal fund, a $19M seed stage fund. We sat down with Kelly ahead of the announcement to chat about the new fund, why they think military veterans are particularly well suited as startup entrepreneurs, why the two went from organizing individual deals for funding to a formal fund, and more. So you mention your thesis as a fund.

What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

It’s what signals to existing investors how quickly their teams need to be fund raising and the level of risk the company is facing and also it signals to potentially new investors both how quickly you need to raise (ie you have less leverage if you’re in a rush) as well as how much cash you’ll need if they fund you. We want money to make some acquisitions (investors would prefer to fund M&A if they know specific deals – not to encourage bad behavior.

Startups and VCs Should Avoid “Pier” Funding

Both Sides of the Table

If a round of funding does happen then this debt is converted into equity at the price that a new external investor pays with a “bonus&# to the inside investor for having taken the risk of the loan. He had raised about $500,000 in seed funding that lasted a long time.

Top 30 Startup Posts for July 2010

SoCal CTO

Welcome to the Lost Decade (for Entrepreneurs, IPO’s and VC’s) - Steve Blank , July 15, 2010 If you take funding from a venture capital firm or angel investor and want to build a large, enduring company (rather than sell it to the highest bidder), this isn’t the decade to do it. How to raise money with no lead - Venture Hacks , July 31, 2010 Paul Graham says “The future [of funding] is no fixed amount, no fixed closing date, and no lead.”

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Get Inside the Mind of an Angel Investor

Both Sides of the Table

When I meet with Tom offline it’s obvious that he immediately is thinking about product issues, technology trends, funding rounds, etc. Part 1: Inside the mind of an angel investor and how it differs from professional seed investors and VC.

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The Long-Term Value of Loyalty

Both Sides of the Table

No rule is ever absolute no matter how it sounds when one writes a blog. But the firm that funded my first startup was loyal to me for having stuck around in what they knew to be pretty tough times and having suffered much dilution. Oh, boy. Here we go again.

Keep It Down Up There | The Canadian Tech Scene in Toronto

Tech Zulu Event

Available seed funding, check; another one down for the startup ecosystem checklist. Although, unlike Rocktr, Perez was on the prowl to raise a real seed round and was finding the Toronto venture capital scene a bit stale.

US Economic Risks (Sept 2010): Impact on Investors & Entrepreneurs

Both Sides of the Table

So I agreed to offer my current thinking on the economy and what it portends for the VC industry & fund raising for entrepreneurs. VCs have also gone back to writing checks because as an industry we can’t be seen as “sitting on the sidelines” for years at a time.