Twilio raises second microfund from angels McClure, Conway
– Alastair Goldfisher is a contributor for PE Hub, a Thomson Reuters publication. He was also part of the judging panel at the Twilio Conference with Paul Singh of 500 Startups and Manu Kumar of K9 Ventures. This article originally appeared here. –
This week at the Twilio Conference in San Francisco, 500 Startups founder Dave McClure announced the launch of a second Twilio MicroFund of $250,000 to invest in companies that are based on Twilio’s Connect platform.
McClure and Ron Conway of SV Angel will each invest $125,000 in the fund. McClure will manage the investments, with Twilio serving as an advisor.
Twilio, a 500 Startup’s portfolio company, provides cloud-based telephony services. The San Francisco-based company, which is hosting a two-day conference, has raised more than $15 million in venture funding from 500 Startups, Bessemer Venture Partners, Union Square Ventures, Lowercase Capital and numerous angel investors.
The first Twilio MicroFund of $250,000 was supported entirely by McClure and launched in late 2010. It has funded 10 companies to date: Callyo, FastCall411, KnockKnock, Magnolia Prime, Order Mapper, Proven, Qwipd, Textaurant, Voicendo and Volta.
Twilio co-founder and CEO Jeff Lawson told me that the idea for the fund came from a McClure tweet, which he posted not long after backing Twilio initially in 2009. In the tweet, McClure said he had invested in his fourth startup based on the company’s platform.
“Dave was already investing in Twilio companies, so we decided to formalize the process,” Lawson said.
Entrepreneur’s tweet sparks fight with angels
– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –
Last month, entrepreneur Matt Mireles published a tweet, asking: “Why is TechStars NYC run by a non-entrepreneur?”
The “non-entrepreneur” in question is 29-year-old David Tisch, whose grandfather built Loews into a Fortune 100 company that operates hotel chains, and whose family’s largess has helped bankroll numerous institutions, including the Tisch Galleries at the Metropolitan Museum of Art, and the Tisch School of the Arts at NYU. Since 2007, the young Tisch has been seed-funding startups with his brothers. According to his LinkedIn profile, he has also started two Internet companies, both of which were shuttered in less than a year’s time.
Surely, Mireles isn’t the first to wonder whether someone with Tisch’s background can fully appreciate the challenges that struggling entrepreneurs face. But the New York angel community’s reaction to Mireles’s apparently sincere question was surprisingly harsh. “I would recommend reserving judgment until you meet and know someone before you insult them publicly and passive-aggressively,” tweeted Chris Paik of Thrive Capital, a seed-fund in New York. Josh Stylman, an entrepreneur and seed investor who has stakes in Betaworks and GroupMe among other startups, called Mireles a “judgmental d**chebag” on Twitter.
Other comments were milder although somewhat defensive. “David is one of the good guys,” tweeted Hunch co-founder Chris Dixon, who is also a member of the seed-stage investment group Founder Collective. (Tisch smartly declined to weigh in, at least publicly.)
That something legitimate should cause so much consternation and trash-talking is concerning. Angel investors often claim that they provide an alternative to the rigid orthodoxy of venture investing. Collectively bashing an entrepreneur who dares to pose a reasonable question is more than unseemly: it’s as provincial as the herd mentality that many angels commonly associate with Silicon Valley VCs. No wonder Mireles fears his public smack-down could stifle other entrepreneurs from speaking openly about their opinions. As he told me yesterday, any entrepreneurs who “witnessed this little episode [will] be more afraid and less likely to call bulls**t when they see it.”
Maybe Mireles doesn’t get much respect because his startup, SpeakerText, a transcription service for Web audio and video, isn’t setting the world on fire. SpeakerText recently raised more than $600,000, including from Lotus founder Mitch Kapor and Dave McClure’s 500 Hats, but it’s still eking out revenue by charging $2 per minute for the transcriptions. In fact, Mireles is still rooming with his co-founder.
why would an entrepreneur take the time to run a convention. These people are driven to take big risks and build big things.
They also tend to fail; a lot.
From an economical perspective of reward for time investment, do you really want them running a convention? Do you want to attend a high risk high stakes convention?
Can you imagine a professional convention where you where all talks are limited to 5 minutes, where everyone gets a microphone, where the speakers in the room come from some brilliant but random pool, where lunch ends up being a potluck? entrepreneur like to do new things, so don’t expect to see something that has been done before.
If you want a predictable, well organized convention, get an administrator. Don’t get an entrepreneur.
Dave McClure: SEO still relevant
Dave McClure, venture capitalist and founding partner of the Silicon Valley tech incubator 500 Startups, remains a staunch advocate of search engine optimization and its benefits. He shares some of his thoughts about SEO with Reuters.
Q: Do you think it’s harder for startups to gain traction with SEO now that Google and other browsers seem to be more quality focused? A: People can build a history in three to nine months. It’s not forever. There’s quite a bit of traffic being driven by search and quite a bit of monetization.
Q: Besides technology startups, is SEO important to other small businesses, including those without a deep understanding of tech? A: Absolutely. There’s still a huge amount of traffic that comes from people typing into a search box. The point is, even though social (media) is rising in ascendancy, it’s going to take a long time for (SEO) to become irrelevant. To suggest that SEO is somehow over is basically predicating a future that’s 10 to 20 years out.
Q: What should small companies be doing to help assure success with SEO? A: You should build a great product, no question. There’s plenty of best practices that use anchor texts for links relevant to your site and content. Reach out and link to other people that are relevant sites and ask them to link to you.
Q: What’s changing now in SEO? A: I think there is rising prominence for social signals. I don’t know if they’re more valuable than search; they’re probably equally valuable at least in terms of driving traffic.
Startup incubators multiplying like “mosquitoes”
– This is a Venture Capital Journal article that appeared on PE Hub – both are Thomson Reuters publications. –
There’s no denying that an incubator rebirth is taking place, thanks in large measure to Y Combinator.
Y Combinator clones are everywhere. Several dozen of them already exist and insiders expect more than 100 such incubators will be operating nationwide before long. And they’re busy churning out plenty of startups. This past week, AngelPad held a demo day for its startups to pitch VCs, its second demo day in less than six months.
On April 7, Dave McClure’s 500 Startups Accelerator is holding two demo day sessions at its event.
As Senior Editor Mark Boslet reported in the April 2011 issue of Venture Capital Journal, one of the takeaways from the surge in incubator activity taking place is that the traditional VC process is undergoing change, and so is the fundamental nature of the business.
“Definitely a lot of things have changed,” said Y Combinator founder Paul Graham. “Whether VCs like it or not, the world of funding startups has changed from (old style) elephants (with few offspring) to mosquitoes” or incubators with thousands of young hatchlings.
“It’s on a different scale,” he said.
The 100 most influential VCs and angels
– Mark Boslet is a contributor to PE Hub, a Thomson Reuters publication. This article originally appeared here. –
Any list of the 100 most influential venture capitalists and angels should include the likes of John Doerr, Ron Conway and Michael Moritz, right?
Not necessarily. And not if the list you’re referring to is the “100 Most Influential VCs, Angels and Investors” compiled by Lucy Marcus, the Huffington Post columnist and the non-executive board chair of the Mobius Life Science Fund.
Call this list one for the new, social decade. Marcus, who also is founder of the Marcus Venture Consulting, posted her list this week on PeerIndex, a site that ranks people based on their digital footprints.
Some of its influencers will come as no surprise. Union Square Ventures’ Fred Wilson is number 3 and blogger investor Paul Kedrosky, number 4.
But what about Kevin Rose, Digg founder, at the top of the chart (he does have 1.2 million Twitter followers)? And how about Twitter investor Chris Sacca number 2? (He also has 1.3 million followers on Twitter.)
Other notables: 500 Startups’ Dave McClure, 9, Foundry Group’s Brad Feld, 11, and cleantech investor Vinod Khosla, 14.
Top 10 tech investing trends for 2011
– Dave McClure is a Silicon Valley venture capitalist and the founder of Internet seed fund 500Startups. He has worked with companies such as PayPal, Mint, Founders Fund, Facebook, LinkedIn, SlideShare, Twilio, Simply Hired, O’Reilly Media, Intel and Microsoft. The views expressed are his own. –
Over the holidays Silicon Valley is a ghost town while most geeks and venture capitalists are busy hitting the slopes at Tahoe or playing Angry Birds Holiday Edition.
If you haven’t had enough football or eggnog yet, stop reading this blather and go watch some grown men beat the snot out of each other while drinking yourself into yuletide stupor. If that doesn’t sound more appealing then you’ll just have to settle for my crazy tech predictions for this year.
With no further ado, I bring you the top 10 tech trends for 2011:
1. (Way too many) Groupons, social games, photo-sharing, and “fart” apps.
Unimaginative VCs — which is to say, all of us — tend to start the new year off throwing good money after bad on last year’s tired and expired ideas. 2011 will be no exception for “innovation imitation” with more group-buying ecommerce plays, more social game startups, and yet even more ways to do photo-sharing on Facebook and Twitter, now new and improved with 37 shades of yellow-gray filters. Bah humbug. My first easy and obvious prediction is that VCs will waste a ton of money chasing hundreds of new “me-too” startup ideas. Nothing new here Kmart shoppers… let’s move along.
2. Commerce and coupons for location-based services (LBS), aka “The $5 check-in”
I think #5 is significant. ICANN ceded governance of the Internet to an international body almost two years ago, mirroring an amazing uptick in non-English speaking sites.
Lachlan Murdoch of the News Corp once remarked that future newsrooms need only be in one of four languages: English, Spanish, Mandarin, and Hindi. I envision a Translation Turing Test where one could have a web experience and not know nor care about the provenance of the website. When English ceases being the lingua franca of international trade, there will be a seismic shift in lobbying for taxes and use fees that will make last year’s kerfuffle between Orbitz and the airlines like like kindergarten.
Angel investor makes a Mint
At 5-foot-8, Dave McClure calls himself “one of the smallest” venture capitalists in Silicon Valley, either “by height or by wallet size”. But he was walking tall after Intuit announced it was buying Mint.com recently for $170 million.
That means McClure, who invested $25,000 in Mint two years ago as part of a Series A funding round, is in line for a healthy payout. At the time McClure was actually on Mint’s payroll as a consultant, but was so impressed with the startup’s founder, Aaron Patzer, that he took the money they were paying him and “turned it right back around and wrote them a check.”
Mint is the first big win for McClure out of the many companies he’s invested in since cashing out from his part in PayPal’s $1.5 billion sale to eBay. “I’ve been doing angel investing for almost five years now and this is the first full exit I’ve had,” said McClure, who first found out about the deal in a 4 a.m. email from Patzer.
A few hours later McClure was hi-fiving fellow investors Rob Hayes (First Round Capital), Mark Goines and Jeff Clavier (SoftTech VC) at the TechCrunch50 conference in San Francisco, where McClure said they were all walking around “with big-ass smiles on our faces.”
Prior to its exit, Mint had raised a combined $30 million – half of that coming in a Series C round led by Benchmark Capital that just closed in August. Some have questioned whether Mint’s $170 million sale was high enough given the amount of VC capital it raised, but McClure disagreed.
“From the angel and A round point of view it was a great outcome,” insisted McClure. “For the B round investors, I’m not sure how big a win Benchmark was expecting, but just looking at it from an IRR (internal rate of return) basis it’s still a pretty good story for them. For the C round investors, I don’t know anyone that makes that good a return in 30 days or less.”
Blogger Jason Fried, of 37Signals.com, didn’t take umbrage with the sale price, but in a post said it was an example of the “VC-induced cancer that’s infecting our industry and killing off the next generation” and that Mint’s exit was likely forced by investors. Union Square Ventures’ principal partner Fred Wilson countered Fried’s assertion in his own blog titled “Who Decides When To Exit?”
