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October 21, 2014

I’m pleased to announce that NextView is co-organizing an event on November 11 called “Angel Bootcamp” along with the event’s original creator Jon Pierce.  The event will be held at MIT from about Noon – 7PM.

The first Angel Bootcamp happened several years ago. The goal was to mobilize and educate the angel community in Boston to become more comfortable and more active investing in early stage internet, mobile, and software companies. Both then and now, our belief is that there is a dearth of high-quality, angel and seed stage capital in the Boston market, and that it would be a huge benefit to the economy as a whole to motivate some of the capital sitting on the sidelines to participate in the innovation economy.

After a short hiatus, Angel Bootcamp is back! The content will be unique – consisting mostly of quick prepared talks on some specific aspect of angel investing or sharing personal stories. We have a packed schedule, and one of the most outstanding speaker lists I’ve seen in a long time. These are people who have been successful entrepreneurs and angel investors in companies that have touched hundreds of millions of people and created billions of dollars in value like:

Uber, Warby Parker, Instacart, Blue Apron, Kayak, GrabCAD, Angelist, Crashlytics, Coupang, Opower, and many others.

For angels or potential angels, this is a chance to hear some of the best in the business share their perspective on investing in the most raw but most exciting companies. For entrepreneurs, this event provides a unique lens into the way angels think and how and why they might get excited about a particular company.

Among the topics I’d expect we hear about:

  • How David Tisch, one of the country’s most prolific angels got started investing at the very first Angel Bootcamp
  • What to make of crowd funding, from the founder of Funders Club and a board member of Angelist
  • How angels can make any money in hardware, from the founder of the best hardware accelerator in the country
  • The perspectives of those who have been on both sides, like Andy Palmer, Diane Hessan, Paul English, Wayne Chang, David Cohen, and others.

It’s an amazing group of both local and out of town guests, and I’m super excited. You can see the full speaker list and further details here: http://seedboston.com/angelbootcamp/

Because of space constraints, the attendee list with be curated to manage an effective mix of angels, aspiring angels, founders, and students. Click the link above to request an invite, or shoot a note to myself, Jay Acunzo, or Jon Pierce.

Of course, this wouldn’t be possible without some terrific sponsors – many thanks to Wilmer Hale, Silicon Valley Bank, and Jones Lang LaSalle for generously offering to sponsor our efforts, and MIT for providing a terrific venue.

October 16, 2014

I’m excited to be able to unveil our recent investment in PaintZen. The company is a technology-enabled service marketplace for the home and commercial painting industry. They have gotten off to a torrid start in New York, and just announced their launch of San Francisco today. Check out more details here and here. What I think is really notable about Paintzen is that coupled with their rapid growth, their quality standards and subsequent referral activity is extremely high. Check out their yelp reviews here, and just contrast them to the reviews of other service marketplaces in some other categories, and you’ll see that the reception has been night and day.

A couple weeks ago, an essay was going around by Paul Graham that talked about how many entrepreneurs “play house”. The article describes entrepreneurs that go through the motions, read all the blogs and online resources about building a company, say all the right things, but are more interested in “imitating all the outward forms of a startup”  vs. being deeply committed to building a great business. Mike, Justin, James, and the team at Paintzen is one of the most stark counter-examples of “playing house” that I have ever seen. No unnecessary flair or pretense. Insanely deep understanding of their vertical, as well as deep understanding of service marketplaces generally (the Mike and Justin previously co-founded MyClean in NYC as well, which is growing at a great clip). And simply building a great business with nicely developing economics, scaleability, and increasing returns to scale.

We were excited to join a number of previous co-investors in this round, including the good folks at Lerer Ventures, Quotidien, and others. Thanks in particular to Sean Black who re-connected us with the team and also joined us in this round.

Congrats everyone – onwards!

October 1, 2014

It’s the eve of Wayfair’s Initial Public Offering, and I’m so excited for the company.  Big congrats to the entire team there, especially NextView Venture Advisors Niraj and Steve (who were among the first people to get behind NextView in the early days).  Congrats also to my wife Nancy, who is VP of Brand Marketing at Wayfair, and was the first person to believe in me in the early days too :)  And congrats to my friend Alex Finkelstein who led Spark’s investment in the company several years back.

Wayfair stands in stark contrast to so many other tech companies you read about.  Where other companies chase hot sectors, Wayfair started in the midst of a burst bubble selling speaker stands online.  Where others raised millions and millions of venture money before they had a business, Wayfair built a business on its own cash flow, and only raised money after they had profitably grown to hundreds of millions of dollars in revenue.  While others chased the wealthy, or the hipsters, or the fashionistas, Wayfair eclipsed them all by focusing on mainstream consumers. While others loudly beat their own drums about vanity metrics, lavish perks, or bold claims of grandeur, Wayfair has allowed their results and execution do the talking.

What an amazing company.

As I said a week or so ago in a tweet, I think that the best years are still ahead for this business.  The company is going after a near limitless market in home goods that has been very slow to transition online, and they have built a highly defensible moat around their excellence in logistics and operational efficiency at scale.  And this is all bolstered by a humble, scrappy, and hungry culture that pervades the entire company.

Congrats Wayfair!  I hope every employee and alum feels immense pride about having reached this milestone.  But contrary to how I feel about most tech companies that go public, I think the future holds even more potential.

The best is yet to come.

 

October 1, 2014

Today, we’re excited to unveil the official Hitchhiker’s Guide to Boston Tech — a comprehensive overview of what tech entrepreneurs and professionals need to navigate and succeed in our local community. Special thanks goes to Jay Acunzo (director of platform here at NextView), Ariel Simon (senior designer, SapientNitro), and Keith Frankel (Chief Digital Officer, Tablelist) for creating this bigger, more comprehensive, and more beautiful edition of my long-running blog series.

In case you’re new to the Hitchhiker’s Guide, there’s a bit of history behind it. In 2009, I published a simple link roundup titled A “To-Do” List for New Entrepreneurs Arriving in Boston. It contained the basics like who to follow on Twitter, where to meet people for coffee, and what events to attend. In 2010, I coined a name that stuck — Hitchhiker’s Guide to Boston Tech — and published every six months since. It focuses specifically on the web and mobile startup ecosystem locally (though it’s worth noting the great work in biotech, robotics, healthcare, and energy here in town too).

Fortunately, the community response to these blog posts has been positive. It’s been great to see entrepreneurially minded newcomers to Boston turn to these posts as a go-to resource. Even other VC’s, angels, and prominent local entrepreneurs have referenced the guide or pointed their friends towards it, which is exciting.  As always, the Boston ecosystem has been really friendly and open to navigate, and I’m glad that these guides have been helpful.

But Boston is a transient and dynamic town, and can feel somewhat intimidating to newcomers.  Even for locals, the startup world has exploded since 2009, making it increasingly difficult to navigate.

So when Jay approached me a couple months ago with the idea of turning this into something more substantial — something that would stand alone as a more beautifully designed “front door” to our ecosystem — I was instantly on board. Historically, the link roundup has been very useful, but this would be a chance to design something that felt more special, more worthy of our amazing local ecosystem. It’s also a good reminder that while there’s a lot listed on the guide, there could be a lot more. We’ve got a lot more work to do in Boston tech.

I’m also excited that we’re now able to crowdsource additional submissions to grow this over time and keep it as fresh as possible — to participate, look for the links to submit new items beneath the various sections of the Hitchhiker’s site.

Boston has grown an amazing startup ecosystem over the last decade, and we want to help both new and existing community members better navigate and succeed right here in town. So, without further ado, I invite you to explore, expand on, and share the Hitchhiker’s Guide to Boston Tech.

September 29, 2014

VC’s, and particularly seed focused VC’s, pursue a variety of different strategies in their portfolio.  Every firm thinks about things a bit differently.  It probably doesn’t really matter too much to entrepreneurs, but after a couple conversations about this with founders recently, I thought I’d share how we tend to think about it.

The main parameters that VC’s tend to think about around portfolio strategy are:

1. Number of investments

2. Ownership percentage

3. Concentration and staging of capital (how much and what stage and how much of the fund in a given company)

4. Capacity

5. Exceptions

I’m sure there are other things, but these are some of the main ones.

Here’s an interesting through experiment though.  The single best venture capital firm in the world would take this strategy:

  • Invest in only one company
  • Put the entire fund entirely into the first round with the lowest cost basis
  • Pick the best company

Of course, no one does this. But what does that say?  Essentially, the further one strays from this strategy, the more one admits that there is luck and unpredictable risk in the market they are investing in. So funds diversify.  Some diversify across many companies, some across stage, some across time to some degree.  The downside to diversification, however, is that you dampen the impact of any one winner.

Put it simply, the bigger the portfolio, the more the investor thinks that luck and uncertainty is a factor.

The problem is that the overall market for VC is pretty crappy.  You don’t want to buy the index.  Funds that have very broad portfolios are making a very particular bet – that although the entire index sucks, their slice of the index will outperform.  Time will tell how that works out.

FWIW, our strategy is that we invest in about 30 companies per fund.  That’s 3-4/partner, probably more concentrated than the vast majority of seed funds out there.  We think that our portfolio will work out roughly as follows:

10 companies will not make it beyond their seed round :(

10 companies will make it beyond see, but die  anyway :( :(

10 companies will make money :)

Of those 10, 0-4 will be transformative.  If it’s 0, we  don’t do so well. If it’s 1-4, we win.  How much we win by depends on how large those outcomes are.

We are a one product company – and that product is a highly engaged, meaningful seed investment.  So with any luck, we don’t actually have to worry too much about whether those 1-4 are at a low cost basis, or if we have enough dollars in.  The answer should be yes for every investment.  At least that’s the model.

 

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    RT @levie: Valley investor confidence is correlated to basically nothing. Uber, Airbnb, Pinterest, WhatsApp founded in 08-09. http://t.co/8…
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    Had a great time meeting with students at BC. Smart founders, and great ideas right on the edge of emerging trends cc @BostonCollegeVC
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    @gallaugher looking forward to hanging out on campus!

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