Venture funds, traditionally, have been extremely selective about their investments. Many firms barely make 5-10 investments a year, and only about 50 investments in the entire lifetime of a seven year fund. Lately, however, I am observing a different structure emerging in the early stage market. Instead of 5-10 investments a year, some investors are
Sramana Mitra: So, in general, the investors are paying; the entrepreneurs are getting it free. David Rose: Right now, such as it is, yes. Although the large returns will come in the future from premium services that will be added in. SM: You’re going to have premium services on both sides? Both the entrepreneurs and
By guest authors Irina Patterson and Candice Arnold Irina: Do you serve on the boards of any of the companies you invested in? Christina: No, I don’t. I do serve on some advisory boards, but those aren’t the companies that I have invested in. Irina: What do you think entrepreneurs could do better? Christina: Going
By guest authors Irina Patterson and Candice Arnold Irina: What do you think angels could do to improve the entire entrepreneurial ecosystem? Dave: It seems the most important thing is providing small amounts of capital early on when companies are getting started and providing advice and support, either in business or product development or marketing.
By guest authors Irina Patterson and Candice Arnold Dave: When I receive a referral from someone, I always ask, “Are you investing?” If he’s not investing, I really want to understand why. Why does he think if he’s not going to invest that it’s a good opportunity for us to invest? I sort of hold
By guest authors Irina Patterson and Candice Arnold Irina: When you’re deciding whether to invest in a company, to what factors do you give the most weight? Dave: Usually, product is the most important to me. But I think a lot of people say team is most important. I do agree with that, but it’s
By guest authors Irina Patterson and Candice Arnold Irina: So, what’s your return target? Dave: I think 10x to 20x is the ideal target. Obviously, if we get more than that, that’s great. But that’s probably not the typical scenario. In most cases things don’t work and usually we get zero. I think we have
By guest authors Irina Patterson and Candice Arnold Irina: Do you hold any events for entrepreneurs? Dave: Actually, I put on a decent-sized 300- to 500-person conference on a quarterly basis. I also run a lot of user groups and events, meetings, and dinners. We’re running one called Warm Gun, a conference about design and