1Mby1M Virtual Accelerator Investor Forum: With Charlie O’Donnell of Brooklyn Bridge Ventures (Part 5)

Sramana Mitra: Entrepreneurs start up somewhere and they get intoxicated with this funding thing. If they are hitting their stride and everybody is chasing them and offering them money, it goes to their head. They want to keep raising money. If you get to a situation like that, it’s perfectly okay to sell out for a small fund.

Charlie O’Donnell: I also think there’s a little bit of a difference in terms of what goes on in geographies. One of the things I noticed is that in the Valley, the goal is to be at the top of the heap of the startup world. It’s focused on a single industry – tech.

If you sell your company for $500 million, you’re clearly not at the top. It seems like everybody is focused on that climb. New York >>>

1Mby1M Virtual Accelerator Investor Forum: With Brian Jacobs of Emergence Capital (Part 4)

Sramana Mitra: What stage do you recommend people to make that shift in your orbit? Are we talking about getting to a million and then moving to Silicon Valley? We see all kinds of permutations and combinations of this behavior. I’m curious what your thoughts are on this.

Brian Jacobs: Rather than a revenue number, I think more in terms of product-market fit. If you’ve got a product that is clearly meeting the needs of your customers and you believe that it’s time to put your foot on the gas and grow your sales and marketing capabilities, then that’s a good time to do it. We see some companies which, for instance, are offering their products on a freemium basis. They are getting no revenue from those customers, but you can start to see if the product is meeting the customer’s needs. That’s more important to us than a specific revenue number. >>>

1Mby1M Virtual Accelerator Investor Forum: With Ashu Garg of Foundation Capital (Part 4)

Sramana Mitra: In some cases, the newsroom analogy is probably not the right analogy. Think about a toothbrush brand. That’s now news-oriented. If you think about how to do content marketing for those kinds of brands, it’s a very difficult problem.

Ashu Garg: In the newsroom analogy, I’m using the word very loosely. It’s the idea that you have to have a focused team thinking about content creation in the context of what users want. Take a toothpaste brand. Talking about your toothpaste, the color and the flavor is probably not that interesting for the audience.

Maybe stories about how the brand is engaging with changing the lives of poor people in third world countries would be interesting. I >>>

1Mby1M Virtual Accelerator Investor Forum: With Charlie O’Donnell of Brooklyn Bridge Ventures (Part 4)

Sramana Mitra: Your strategy is to not worry about the ones that are not really making it and will have to raise money with liquidation preference where you don’t have the negotiating leverage. Focus on the ones that will get to decent exit and you need three of those to make your fund economics work.

Charlie O’Donnell: Yes. I do 80% to 90% of my total investment upfront, which is a deviation from the way that most fund managers work on it. The way to think about my fund is, if you had a $100 million seed fund, what percentage of that fund goes into the seed round? If you’re following on three to one or four to one, you’re really talking about, at most, 20% of the fund and the rest of it was dollars when you double down on your winners. >>>

1Mby1M Virtual Accelerator Investor Forum: With Brian Jacobs of Emergence Capital (Part 3)

Brian Jacobs: As far as the future of the cloud is concerned, I think we continue to see more and more innovation. I believe innovation begets more innovation. Once you see how the cloud changes your business, you start to see new opportunities that maybe weren’t so visible initially.

I think that this idea around industry cloud, which is a vertical software company that is enabling competitors to aggregate data and share data without compromising their trade secrets, is an exciting opportunity. It’s a mix of vertical software with Big Data with the idea that by sharing data in the cloud, you can do some things that companies with an on-premise solution just can’t do. That’s one of our key investment themes.

Another one is mobile business applications. We think that the mobile phone is now effectively a supercomputer in your pocket. >>>

1Mby1M Virtual Accelerator Investor Forum: With Ashu Garg of Foundation Capital (Part 3)

Sramana Mitra: Media buying has been the most obvious areas which needed to be automated because of the trends that you described. Machine learning applies very well into that space. Can you talk about other areas in marketing technology, where, powered by machine learning, there is venture-scale opportunity?

Ashu Garg: I’m going to talk about very broad themes. The beauty of entrepreneurship is, startups always prove investors wrong. I’m sure that there are folks in this audience who will have ideas that we haven’t even thought of. With that caveat, I published a book called The Decade of The CMO last year. We talked about five major technology trends within marketing technology and five buckets of areas where I think mostly billion-dollar companies will emerge. >>>

1Mby1M Virtual Accelerator Investor Forum: With Charlie O’Donnell of Brooklyn Bridge Ventures (Part 3)

Sramana Mitra: How do you process the current investment climate where capital is moving further and further upstream? Some of the funds that I’m sure you were involved in your previous life are becoming gigantic funds. As a result, they have to move upstream and deploy larger chunks of capital right away. How does a seed investor mitigate the Series A gap?

Charlie O’Donnell: For every fund that you’ve seen move up, you have some set of funds that fills in that space. The capital environment is pretty efficient. We certainly have Series A funds that insist on deploying $8 million to $20 million. It’s very hard to get a seed-funded company from their initial check to a position where they can take on a $10 million investment. >>>

1Mby1M Virtual Accelerator Investor Forum: With Brian Jacobs of Emergence Capital (Part 2)

Brian Jacobs: As we learned more and more about how the cloud changes everything, we have evolved our investment thesis. We found some new areas where the cloud really does provide a new opportunity. Rather than disrupting incumbents, we’re taking advantage of the cloud to do things that we could never do before.

For instance, we knew that the social wave in the consumer world was going to affect businesses. If all of the employees and customers are on social networks, that’s going to affect businesses that try to serve consumers as well as the companies who have those workers in their midst.

We’ve invested in a number of companies that are bringing social technologies to business. We started to realize that the >>>