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Seed Capital From Angel Investors: Brad Feld, Managing Director, Foundry Group (Part 6)

Posted on Saturday, Aug 7th 2010

By guest authors Irina Patterson and Candice Arnold

Irina: And what about your equity share and your returns? Do you have any rules about those numbers?

Brad: Again, it varies dramatically. We don’t have a specific rule. Our goal is to work with entrepreneurs to build as much value as possible.

Irina: What stage of the business development do you usually prefer to invest in?

Brad: I think, almost exclusively we invest early in lots of these companies. Our seed investments are often are couple of people and an idea.

Irina: What about the total available market (TAM)?

Brad: Because of our thematic approach, we tend to know the markets that we invest in. So, it’s more of a filter for us than something we need to understand. And we only invest in themes where we think there are very large market opportunities.

Irina: As far as the people, do they have to have any experience?

Brad: We don’t filter based on experience. We’ve invested in entrepreneurs who have done things multiple times, and we have invested in first-time entrepreneurs. We are very comfortable with both.

Irina: What about business teams; do they have to have complete business teams?

Brad: No, they don’t have to have complete teams, although we found is that teams that have at least two people, where at least 50% of the team consists of technical cofounders, tend to be better than teams where there are either one person or business-heavy teams. It’s not an absolute rule for us, but it is definitely something we pay attention to.

Irina: Do you have anything to say about the character traits of the founders?

Brad: Founders who are incredibly passionate about the thing they are doing and obsessed with trying to build a business are some things that turn us on.

Irina: You say that you receive about 1,000 deals a month, right?

Brad: Yes, that order of magnitude. I don’t know whether it’s 500 or 1,000 but it’s a big number.

Irina: So, what do you do with rejected deals that do not fit your criteria in any way?

Brad: I think for the ones that are outside the area of things that we invest in we tell them immediately. We just send them an e-mail saying this is not something that we are interested in. If it’s something that is within a theme but we decide not to pursue it for some reason, it’s the same kind of thing. We try to always let people know if we’re not going to pursue it.

Irina: Could you be more specific about your themes?

Brad: If you go to foundrygroup.com and type theme inside the search engine, you will see them, but the names of the themes are human computer–interaction, glue, digital life, protocol, and implicit Web.

This segment is part 6 in the series : Seed Capital From Angel Investors: Brad Feld, Managing Director, Foundry Group
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