1Mby1M Virtual Accelerator Investor Forum: With Jon Staenberg of Staenberg Venture Partners (Part 4)

Sramana Mitra: People are scrambling. There are a lot of people in the industry who are also scrambling to put in little bits of money. By the time you get to raising Series A, you’ve raised six rounds of financing already.

Jon Staenberg: I love to refer to the millennial problem. Pivoting, sometimes, is a completely appropriate response, but you have limited amount of money. You haven’t raised enough money. You pivot twice. Guess what? What do you have? I do get those calls. People say to me, “Is this fundable now?” You should have asked that question two pivots ago.

Sramana Mitra: That’s what we do here in the program. We focus on fundamentals and focus on customers and

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1Mby1M Virtual Accelerator Investor Forum: With Jon Staenberg of Staenberg Venture Partners (Part 3)

Sramana Mitra: You said earlier that you’re interested in Bitcoin. Can you talk a bit more about how you’re analyzing the Bitcoin situation? Bitcoin is not a capital-efficient area to invest in. It’s going to be expensive more often than not. How are you parsing the Bitcoin opportunity?

Jon Staenberg: Let me step back for one second on that question. When we started doing this 30 years ago, technology was in a serial rollout. I remember the PC era. We talked about client-server. We talked about the network. Today, we have an absolute hurricane of new technologies being hurled at the world. So there’s no longer one thing to focus on. There are 10 things like Bitcoin.

I have to say I’m just at the beginning of my study of Bitcoin. I can’t sit here and tell you how I’m going to invest in it. I’m sticking >>>

1Mby1M Virtual Accelerator Investor Forum: With Jon Staenberg of Staenberg Venture Partners (Part 2)

Sramana Mitra: Have you selected where you want to play in this continuum?

Jon Staenberg: I haven’t. Maybe it’s a bad strategy on my part to say I’m more opportunistic, but I don’t have a fund right now. I’m investing on my own or I’m investing with syndicates. I have a group of people I work with as well. I back people first. People always ask that question. Is it market or people? I’m backing people.

I’ll give you two investments I’ve done recently. One was a company called Tomorrow.me. Surprisingly, there is a large audience that doesn’t have a will yet. This was the first round of funding. There are some great people around the table but the team had >>>

1Mby1M Virtual Accelerator Investor Forum: With Jon Staenberg of Staenberg Venture Partners (Part 1)

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. If you haven’t already, please study our free Bootstrapping course and the Investor Introductions page. The following interview with Jon Staenberg of Staenberg Venture Partners was recorded in November 2017. 

Jon Staenberg, Managing Partner at Staenberg Venture Partners, has been a Seed Investor in over 300 ventures over the last 30 years. Jon draws from his long background and discusses some of what interests him to invest in a startup. He also reflects on the question People or Market: Which takes priority?

Sramana Mitra: Tell us about the focus of your investments and let’s introduce you to our audience.

Jon Staenberg: I’m a little disappointed that it took 374 shows to get me on, but I’m glad to be here. I’m kidding, of course! Congratulations to you for doing this. It’s nice to be interviewed. I’m an old dinosaur at this point, having done this for some 30 >>>

8 Investors Discuss Velocity and Financing within the Virtual Accelerator Investor Forum

Almost all investors are looking for startups with velocity, ventures that increasingly solve real pains in repeatable ways. If you can achieve velocity, then investors will chase you, because they know it’s not so easy to find companies that hit their stride velocity-wise. Be mindful that the best way for your startup to get to velocity may be by bootstrapping. Entrepreneurship equals customers, revenues, and profits. Financing and exit are optional. There are many examples of companies that would have succeeded as bootstrapped companies, but went out of business because they went after financing. To learn about the various levels of velocity investors are looking for in the startups they finance, please read the following interviews with a wide variety of VCs and seed investors.

Mark Achler, Managing Director, MATH Venture Partners, discusses their investment strategy and the industry trends.

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1Mby1M Virtual Accelerator Investor Forum: With Jonathan Lewy of Investo (Part 5)

Sramana Mitra: I’m asking a question where the entrepreneurs, by definition of the type of opportunity, would not be raising money from the big funds. In this case, the opportunity is not to act as a seeder. The opportunity is to fund some entrepreneurs and then exit straight away.

Jonathan Lewy: I guess that depends on the fund.

Sramana Mitra: That’s what I’m asking. Is this part of your strategy or do you only act as seeders into the larger funds? >>>

1Mby1M Virtual Accelerator Investor Forum: With Eric Benhamou of Benhamou Global Ventures (Part 4)

Sramana Mitra: You said you argue with a lot of your industry colleagues on this topic. You have to manage how much capital is required to ride that curve. You have to do it somewhat capital efficiently. You can’t raise $100 million and have a $100 million exit. That is not going to give you the return that you’re looking for.

You have to manage it within a reasonable amount of capital. Let’s say you do the Series A. Maybe the company does require a Series B. Where will that Series B entrepreneur go? Who will think the way you are thinking?

Eric Benhamou: That’s an excellent point. We have to look at the entire lifecycle of the company. If we make a mistake of starting a company which requires $100 million of capital, we’ve made the wrong choice. We focus on capital-efficient companies. >>>

1Mby1M Virtual Accelerator Investor Forum: With Jonathan Lewy of Investo (Part 4)

Sramana Mitra: How do you parse unicorn mania? As a pre-seed investor, you could get buried under later-stage liquidation preferences. Even with your special investment vehicle, you could get buried under later-stage liquidation preferences. How do you protect yourself?

Jonathan Lewy: We know the risk. We believe in the relationship we’ve built with the founders. I know it’s not always in the hands of founders. That depends on the term sheet. We hope to invest in the right people that would end up doing the right thing.

Sramana Mitra: As it stands, some of the funds of your size are looking at these opportunities very carefully. They don’t really go beyond Series B. When a Series B is being raised, they take their multiples and just sell out to the Series B investors. That mitigates the risk there. >>>