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The Future of Venture Capital is Hanging-Out Downtown: The Not So Big Secret

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“What has been will be again, what has been done will be done again; there is nothing new under the sun.”

Ecclesiastes 1:9

This is part of my Series on Venture Capital.


Despite the hyped meme people are putting out there about the “venture model being broken”, I’m definitely of the school that believes Venture Capital is merely going back to its roots. Smaller, smarter, more agile, leaner, that’s all. Just look at the charts Kopelman’s been sharing of late. If you ask me, this is all a very good thing.

Speaking of Kopelman, here’s a guy who, along with a few other smaller/high-volume funds is executing very effectively on this leaner VC model (on the east coast at least).  I really do think his extremely effective special-forces model is part of the new wave we will be seeing a lot more of.

To give you a concrete example, this ostensibly “Philly-based” swat team recently executed the equivalent of a pub crawl through all the NYC incubators in a single day, all under the covering fire of a steady stream of tweets, four-square yawps and various other forms of digital pitter-patter that announced their comings and goings. No doubt their approach is catching the attention of their brethren VC’s ensconced in more conventional settings and habits. 

And let’s face it, who really needs an office in this climate? This new breed of bad-ass-VC will meet you in cafes, at the Ace Hotel, in noisy diners- they don’t care. Bring it on. Headquarters, what’s that? That’s silly to them. You go where the entrepreneurs are and you hang with them.

It’s actually been incredibly enjoyable to watch- and with the advent of widespread VC blogging, the Funded, the ubiquity of cloud computing, open source software, younger and younger entrepreneurs and hence much less funding needed to launch a web business- we are witnessing the opening-up of, accessibility of and democratization of the entire industry. And by the way, First Round is just one of an entirely new breed popping up all over the place which includes the Founder Collective, True Ventures, Andreessen/Horowitz and others.

Here’s my tongue-and-cheek take on what’s been happening and what’s going to happen (on the east coast at least).

What’s been happening:

  • Last summer, LP-types reading plays like “Waiting for Godot” on Herreshoff sailboats off the coast of Maine started calling the office sounding concerned and asking what’s going on.
  • This started a small panic and suddenly, guys comfortably ensconced on “VC Hill” in Waltham started driving to Cambridge a lot to get back in the action.
  • Extremely formal guys in French cuffs known for unwinding with $100 bottles of Sancerre after work suddenly started blogging enthusiastically about the arm-wrestling and bowling events for entrepreneurs they are hosting in various “cool-sounding” locations.
  • In NYC, uptown VC’s started trying on jeans they haven’t worn in years only to realize they don’t fit too well.


What’s going to happen:


  • In five years, there will be half as many funds operating as there are today.
  • The last ones standing will be the very established funds on one extreme and this new breed of small, agile, entrepreneur-run operation on the other.
  • Smaller, leaner, genuinely entrepreneur-friendly funds will thrive in this brave new world.
  • Most of them will be “hanging-out downtown”.


PS: (Oh, and by the way, I’m talking about tech VC, not biotech VC. Commissioning the optimization of molecules and the like from reserved and stately offices supported by enormous amounts of capital is not going anywhere for a while IMHO.)

All Hands on Deck!! NYC Startup Job Fair Finally in Sight for University Entrepreneurs

This is part of my Series on University Entrepreneurship.

I've written here about the magnificent tidal wave of university entrepreneurship I see cresting in this country. But those of us in NYC will have the distinct pleasure of watching it converge with red hot Silicon Alley's own wave in the form of the much awaited and upcoming NYC Startup Job Fair. It is to be held at AOL's NY headquarters on April 9 from 1-4pm. Big time congrats to the organizers for pulling this off!

So if you are a student or recent graduate of a NYC university trying to break into the world of start-ups, or if you are a start-up looking for some talented and enthusiastic university students, you should definitely register for this event ASAP as space is limited.

Sign-up here:

NYC Startup Job Fair
Where: AOL HQ (770 Broadway)
When: Friday, April 9th 2010
What Time: 1:00PM – 4:00PM

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NYC Seed Announces SeedStart 2010 Summer Program

NYSEED
 
I was speaking with Owen Davis last night and he mentioned that no one in the Columbia entrepreneurship community had yet applied for this new summer program. The deadline is approaching so if you didn't know about it yet, there's still time to throw your hat in the ring. Here are the details:

NYC Seed Announces SeedStart 2010 Summer Program-$20k for up to 10 startups for the summer

SeedStart will offer promising teams the chance to build a technology product and launch a company with the assistance of seed investment capital, mentorship and other resources.  Companies will be selected through a competitive application process and each company will receive a $20,000 investment. Throughout the summer, companies will also receive mentorship from experienced New York City based venture capitalists and entrepreneurs, legal and business guidance, administrative help and technical assistance.  At the end of the summer venture capitalists and angel investors will be invited to an Investor Day where each team will present their product and launch their company.  SeedStart will run for 8 weeks beginning in June of 2010.

SeedStart is a joint effort among Contour Venture Partners, IA Ventures, NYC Seed, RRE Ventures and Polaris Venture Partners, and also includes Fish & Richardson, Manatt, Phelps & Phillips and Silicon Valley Bank.  The program has begun accepting applications and teams of at least two founders can apply here:

http://www.nycseed.com/seedstart.html by February 28, 2010 to be considered. 

For information, contact Owen Davis at owen@nycseed.com.


Some Thoughts and Best Wishes for the New Year: Here Comes 2010!

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As 2010 approaches, a few wishes and thoughts come to mind:

1)     First, I want to thank you, the readers of this blog for all your encouragement, thoughtful comments and words of wisdom throughout the year. I wish you all much success and happiness in 2010 and look forward to our continuing dialogue.

2)    I also want to wish the entrepreneurs and investors I work with on a daily basis all the best for the coming year. It is truly a privilege to work with so many enthusiastic and dynamic individuals in a city with such a close-knit start-up community and so many great companies. The New York tech scene is on a huge roll. Let’s continue to make it happen!

3)    2009 was certainly a tough year and the difficult economic climate may well persist.  The keys for fledgling start-up companies will no doubt be to stay focused, flexible and ultra-determined. Stick to the basics of “getting from zero-to-one” at all costs so as to survive and thrive.  Surround yourself with high-quality missionaries who are all about “making it happen” and run like Usain Bolt from everyone else. In this environment there is literally no time for mercenaries, negativity, complainers and/or bureaucrats any more. The stakes are simply too high.

4)    Lastly, as good old Mark Suster says, JFDI and take the plunge!

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