The $600B Opportunity

Four years ago, I wrote a post about how there is $240B on the balance sheet of some of the biggest technology companies (10 of them) in the world, which is a great sign for startups who are looking to get acquired.  Almost all of the companies in 2011 have added significant cash to their balance sheet over the past four years. I pulled up the cash on hand for an expanded list (21 companies) and now there is $600B available to make acquisitions of startups.

I included cash and short-term investments only for this and previous post.  So in reality there is much more than $600B available via long-term accounts / offshore accounts.

cash 2cash

active VC firms in NYC who invest in seed stage startups (2014)

VC Firms who do at least four seed deals per year AND are based in NYC. In addition, seed investing has to be a core strategy of the firm. I used CB Insights primarily to get data on arriving to this list. Please let me know if I’m missing any firms

Advancit Capital
Armory Square Ventures
Avenue A Ventures
Basset Investment Group
BDMI
Betaworks
Bloomberg Beta
BoldStart
Bowery
Box Group
Brand Foundry
Brooklyn Bridge Ventures
Collaborative Fund
Contour Ventures
Deep Fork
Eniac
ffVC
Flybridge
First Round Capital
Founder Collective
General Catalyst
Google Ventures
Gotham
Great Oaks
Greycroft
High Peaks
IA Ventures
Lerer Hippeau Ventures
Mesa+
Metamorphic Ventures
Neu Venture Capital
Quotidian
Red Swan
Red Sea
Rothenberg Ventures
RRE
RSE Ventures
Scout Ventures
Softbank Capital
Tribeca

Pivoting

After a great experience at 500 Startups, I’m pivoting :) (i.e. my last day is Dec 30th)

Over the last 15 months, I’ve had the opportunity to work on several parts of the venture business.  I helped raise the $44M Fund II (sourced our largest LP), launched the NYC coworking office, led four investments, worked on 20+ other investments, helped with portfolio management, assisted in finding/screening startups for the accelerator, organized community events and also covered several geographies (NYC/Boston/Israel).

The #500strong family is a special one, truly unique, happy to say that I was part of it and hope to stay involved in some capacity.  Thanks Dave for the opportunity.

Will be taking a little bit of time off and also explore several opportunities within the startup ecosystem and will let you know in February as to which company I end up choosing to work with.  If you want to get in touch, you can find me on Twitter or LinkedIn.

Building Trust With Your Investors

As you may know, there is tension between investors and entrepreneurs in general.  There is a long history of bad blood and poor actions on both sides that I won’t get into right now.

During my time as an investor, I have found that the easiest way for an entrepreneur who has raised money from me to build trust, is to over communicate the health/status of their company.

As a very active seed investor, we typically don’t have a lot history with the founder(s) and usually invest after a few meetings, so while there is some trust built during the investment process, you still don’t really know each other that well.   So trust (on both sides) is built over time.

If you have taken money from investors, I encourage you send monthly updates to them.  I have created an easy template to follow.  The information that I ask for (and that investors want) is something that you should be tracking and sharing within your respective organizations in any case, so it is not onerous.

The side benefit to the entrepreneur to send monthly updates is that your investors/angels will bug you less often as they already know how things are going, so it allows you more time to focus on your business and less time doing coffee meetings with all your investors.

The other benefit is that when you need to raise that bridge/extension round (which is highly likely), you have built trust with your investor(s), so you have a better shot of raising that inside round.  I have seen several situations where I don’t receive any information from an entrepreneur for six months (or more) and then they come to me saying things aren’t going well, please invest more money, that is not a good situation to be in as an entrepreneur.

List of NYC equity based accelerators

NYC accelerators:

So AngelPad (a SF based accelerator) just announced at the #premoney conference that they are expanding to NYC.  There are now 15 equity based accelerators in NYC.

  1. @angelpad
  2. @techstars
  3. @DreamitVentures
  4. @ERoundtable
  5. @bphealth
  6. @SeedStart
  7. @NYeHealth
  8. @FinTechLab
  9. @WIMAccelerator
  10. @startuphealth
  11. @EdTechAccel
  12. @SocraticLabs
  13. @founding
  14. @FinTechNY
  15. @RGAaccelerator

NYC = Customers = $

If you are SELLING a product/service, there isn’t a better place than New York.

Largest density of Fortune 500 companies is New York City.

In Manhattan alone, there are 42 Fortune 500 companies, see pic. (all of those are within 5 miles of each other)

In addition, there is a high concentration of universities, K-12 schools, hospitals, physicians, financial services firms, real estate related firms, construction projects, local retailers and there are 8.3M people.

If you can’t find customers in NYC, you won’t have a better chance in any other region.

Startups, no excuses of why you can’t close a lot of business in this town.

fortune 500 NYC

Investor Updates – Email Template

If you have raised funding from investors, you should be providing at least quarterly updates, although I much prefer monthly updates.  Here is what I want to see from Founders:

  1. Specific metrics (revenue, number of customers, downloads, MAU, DAU, KPIs, churn %, etc)
  2. Cash position, how much do you have, what is your monthly burn and how much runway do you have left
  3. If your runway is close to 6 months, I wanted to undertand what your fundraising strategy is
  4. Product updates
  5. What is going well
  6. What is NOT going well (don’t bullshit, you need to be transparent)
  7. What do you need help with (what are the action items for your investors?)
  8. Current headcount
  9. New hires
  10. Open positions
  11. Press
  12. Other

Keep it succinct, you should be able to keep it to one page in length.