1Mby1M Virtual Accelerator Investor Forum: With David Blumberg of Blumberg Capital (Part 6)

Sramana Mitra: This is an area of differentiated well-merchandised consumer products in existing categories and sometimes even new categories. This is a very interesting area because Facebook has created an unbelievable platform for entrepreneurs to hyper-target. That hyper-targeting capability never existed until now. It’s amazing.

For $20, the kind of hyper-targeting you can do is incredibly efficient. There’s some good news for the consumer entrepreneurs who are trying to build something. There is some good news and bad news in the story that you told. Amazon has locked up distribution and logistics in such a tight way that all the big categories are locked up. However, the niche and new products is where the e-commerce opportunity is. >>>

1Mby1M Virtual Accelerator Investor Forum: With Darshan Vyas of LOUD Capital (Part 1)

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Darshan Vyas, LOUD Capital was recorded in September 2017. 

Darshan Vyas, Co-Founder Managing Director, LOUD Capital, discusses seed investing in the startup eco-system in the Mid-West from Ohio.

Sramana Mitra: Tell us about LOUD Capital. What is the focus of the firm? How big is your fund? What size investments do you make? >>>

1Mby1M Virtual Accelerator Investor Forum: With David Blumberg of Blumberg Capital (Part 5)

Sramana Mitra: What you’re describing is not contrary to the point they’re making. The point they’re making is that we’ve gone through a 30-year extensive innovation phase. The company that really disrupted Nokia is Apple. To some extent, the Samsung world followed. Sitting in 2016 and looking ahead, it seems like there is a bit more of too many superstars dominating and playing monopolistic roles in their individual areas.

Facebook doesn’t really have a competitor right now. Google doesn’t really have a competitor in search. These are dominant industries. On the cellphone side, there’s competition. The business software faces a lot more competition. There’s Salesforce, Microsoft, SAP. They’re all still acquiring companies and staying relevant. >>>

1Mby1M Virtual Accelerator Investor Forum: With Don Hutchison (Part 4)

Sramana Mitra: Talk a little bit about your investments. First and foremost, what have been some of your most interesting and satisfying investments so far?

Don Hutchison: If I look at deals that have graduated, I would say Sugar Media would be one. They’re a software stack for managing personal media at home. It was sold to 2wire. It was a really good outcome. It helped accelerate the management and the installation of higher-order applications and fundamental broadband hardware in the home. 2wire is the preferred hardware and software on the media sell side and others would be for cable. It helped move the market forward.

At the same time, it was a very good outcome for the company and investors. Recurrent Energy is very active. I actually put a team >>>

1Mby1M Virtual Accelerator Investor Forum: With David Blumberg of Blumberg Capital (Part 4)

Sramana Mitra: I was actually reading last week’s Economist expose on superstars. Being a history buff, you may have already read this. Every time there is a major technological revolution, there’s this very disruptive period of 20 to 30 years when there’s a tremendous amount of startup activity and experimentation. Then, that period settles into an oligopoly.

Right now, we do have a bit of an oligopoly in tech. We have four or five companies that are in very dominant incumbent positions that are very difficult to compete with. The amount of data that Facebook has accumulated and the amount of precision with which they’re able to target ads is impossible to compete with. The only other people who have even a remote chance is Google because of their search and intent data capture. >>>

1Mby1M Virtual Accelerator Investor Forum: With Don Hutchison (Part 3)

Sramana Mitra: We see cap notes a lot in Silicon Valley, but if you go outside of Silicon Valley, people are still using equity vary aggressively. We, very often, see terribly diluted deals at very early stages.

Don Hutchison: That is the historic nature of equity investment. The issue you’re talking about is before notes became accepted here. It was a couple of years’ process. Earlier, it was all equity here as well. You didn’t go through as many rounds before jumping to an A. If you got seed, you went to an A. There might be some bridge but the bridge usually came from the incumbents. That usually was discounted notes to the A. The clearest way is to gain traction quickly.

Sramana Mitra: We’ve been saying this. Get traction before you raise money. >>>

1Mby1M Virtual Accelerator Investor Forum: With David Blumberg of Blumberg Capital (Part 3)

David Blumberg: I was speaking at a conference in Mexico recently. It was about transportation of the future. I’m not an expert in that, but I’ve got some theories. A lady from Ford Motors got up and said, “The future of transportation is green, recyclable, and sustainable.” Then a man from Delphi Auto Parts said, “The future of the automobile is connected.”

I got up and said, “I don’t know what the future of automobiles will be. I want to ask you. I have two choices. Is it a product that you buy, own, fill with gas, take to the garage to park and only comes in one shape and size during the lifetime of your ownership? Or is it a service? It comes to you when you call it? It comes as a motorcycle today, or Ferrari the next day? You don’t pay insurance. It’s all wrapped in a service.” >>>

1Mby1M Virtual Accelerator Investor Forum: With Don Hutchison (Part 2)

Sramana Mitra: There are 70,000 seed investments a year and only about 1,200 to 1,500 venture investments. There is a huge Series A gap that people have to deal with. How do you recommend the seed investors as well as the entrepreneurs who are raising seed money mitigate the gap?

Don Hutchison: You’re going to be in a very competitive process to gain that Series A. In all likelihood, a venture fund will be a normal part of your future if you’re the kind of company that you and I are talking about. You got to have the characteristics that will appeal to that audience, although there is still room for opportunities.

We’ve seen a great increase and interest in Blockchain, Bitcoin, and all types of cyber currency. That would be something where a >>>