Reposting from my entry via CBinsights . You can follow me @samirkaji for more of my thoughts on VC and tech. The Past, Present, and Future of Micro-VC Although it’s been less than a year since I posted my primer on the Micro-VC market, there have been a lot of developments since then. Loosely, Micro-VC firms are venture firms that raise funds that share the following characteristics: < $100MM in size (although most are <$50MM in...

Back in March, I posted a raw list of global Micro-VC firms that I was aware of. It remains a work in progress as new firms continue to emerge, and I’m sure there are a couple of dozen I’m still unaware of. Similar to the post from last year, I’ll be doing a full updated analysis of the Micro-VC landscape in the coming weeks, including some predictions, but in the interim, I wanted to share some of data that the CB Insights team pulled for...

A lot of new Micro-VC firms have been formed over the past couple of years. A lot. For some, it may seem like anyone that has a good story and a PowerPoint can raise a fund. Having lived through the process vicariously through dozens of new managers, I can tell you that raising institutional capital can be very tough for first time managers. And in many ways, despite the bull market we’re in, it’s much tougher to raise institutional...

Recently, I aggregated a list of all the Micro-VC firms I could find. As I indicated, the number of these type of firms has exploded over the last few years (by note, ~50% of the Micro-VC market was not in existence prior to 2011). Drilling down a bit into the list, below are some illustrations that provide a more granular view on distribution by geography, fund size, and gender. Geography Not surprising to discover that nearly 50% of...

Late last year, I provide my observations around the (ever-expanding) Micro-VC market. Apologies to all the firms whose logos I missed! Fast forwarding a couple of quarters, things remain maniacal with respect to new fund formations. To note, nearly 100 new firms were formed in 2014, representing nearly 40% of the total fund issuances last year (by number of funds). For some historical perspective, 1st time funds comprised anywhere...

While I haven’t seen authoritative numbers around convertible note usage for seed rounds, I can confidently say that the overwhelming majority of seed deals completed in Silicon Valley are done through convertible notes. In fact, while I get a ton of questions daily from entrepreneurs about the nuances of seed financing, the questions rarely stem around whether they should raise through a priced round or a convertible note. The latter is...

It’s safe to say that despite less than a full presidential term in existence, venture firm Formation8 has made quit the impact on the industry. With a rock star team, stellar early performance with exits from portfolio companies Oculus Rift and RelateIQ, and now nearly $1B in assets under management, it’s no wonder that they were dubbed by Fortune as the “hottest” venture firm since Andreessen Horowitz. With two successful entrepreneurial...

Walking into the Homebrew (named after the famed 1970’s hobbyist computer club) offices in SF provides for a very different experience than what would be normally expected from a typical venture capital firm. Amidst rows of desks reserved for Homebrew portfolio company teams, sit Homebrew founders Hunter Walk and Satya Patel. No opulent Partner offices and no unnecessary frills. Consistent with their operating DNA and Homebrew’s...

2014. An interesting year within venture circles to say the least. From the largest ever M&A of a venture backed company to the rapidly expanding billion-dollar club to the Micro-VC boom, we saw a little bit of everything last year. Reflecting back on the year, I wanted to share some thoughts and observations of mine specifically around the early stage financing market. I apologize in advance for the semi-ramble as I’m still working...

Founded by Jack Ma in China in 1999 to becoming the largest IPO in U.S. history, Alibaba represents one of the most compelling tales of a Asia based start-up that has had a significant impact on the U.S. market. However, U.S. based tech startups continue to be the dominant source of disruptive technology for global markets. Perhaps surprising to many, early adopters of newer technologies typically have not been U.S. or Europe based...

  Without equivocation, consumer technology has completely transformed our daily behavior over the past decade: It’s changed how we communicate to the world (Twitter/Medium). It’s changed how we share our lives (Facebook/Snapchat/LinkedIn). It’s changed the way we travel (Uber/AirBnb). It’s changed how we manage various aspects of our lives (Dropbox/Mint/Fitbit/GrubHub). As such, it’s easy to see why...

The tech world has been put on notice. Shortly after Benchmark’s Bill Gurley expressed concern about the tech community given bloated cash burn rates and valuations of companies, a16z founder Marc Andreessen expressed even stronger trepidation with the industry, offering up terms such as “vaporize” and “worry”. Coming from industry titans like Bill and Marc (along with USV’s Fred Wilson who relayed similar sentiments), these words carry...

Recently, I penned a few notes regarding recent exponential rise of “Micro-VC” (loosely defined as firms that raise sub-$50MM-$100MM funds to invest in seed stage companies). According to CB Insights, at least 135 firms such firms exist today! Jeff Clavier, founder of SoftTech VC is without a doubt a pioneer in the institutional seed investing space. The SoftTech team has made over 150 investments since inception (including companies such...

Just over a year ago, I posted a blog post about the state of the “Micro-VC” market. As a refresher, Micro-VC firms are venture firms that typically have the following characteristics: Primarily initially invest at the seed stage. Invest on behalf of 3rd party Limited Partners. Most commonly have fund sizes that are sub-$50MM. I’m not a huge fan of the Micro-VC moniker but will use it here for lack of a better term. At any rate,...

The evolution of the Venture Capital industry has been fairly dramatic over the past several years. A trend that’s emerged prominently in the early stage market is the massive supply of seed stage companies relative to supply of Series A capital. Bullpen Capital is one of the early pioneers in providing stage specific financing related to this phenomenon. The below is a transcript of a chat I recently had with Duncan Davidson, Founder and...

“Micro-VC firm”. “Emerging Managers”. These are terms that invariably come up in any discussion about the current state of Venture Capital. And for good reason - Smaller, newer fund managers seem to be surfacing by the day and seem to be a key theme in the evolving world of Venture Capital. Look, the 80’s and 90’s represented great times in Venture Capital. With innovations in mainframe computing leading...

I have to believe that most of us are dealing with some degree of “Series A crunch” fatigue. I know I am! Yes, it’s true that a majority of seed round funded companies won’t receive another round of financing. That fact doesn’t represent a problem, at least from a macro perspective. Markets can only support a specified # of players in a given space, so an early natural filtering/consolidation process is...