“It’s a Trap!” Or, the Myth of the Mid-Stage Round

By Scott Lenet

Nearly half of Series C rounds were flat or down in the third quarter of 2016, prompting the industry refrain that “flat is the new up” and implying that entrepreneurs should be happy with the current state of affairs. Happy or not, entrepreneurs seem to recognize the new reality, with two-thirds of CEOs admitting that they believe the balance of power is shifting from entrepreneurs to VCs, according to the State of Startups survey from First Round.

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Interview with Robert Blatt, CEO of MomentFeed

By David Cremin

When we invest in startups, often we also serve on the company’s board of directors.  As directors and/or fiduciaries of early stage companies, sometimes we recognize that a founding team needs operational assistance.  The vision is there, but sometimes the steps to realize that dream are not clear.  Based on the pattern recognition gleaned through investments in over 100 startups, we can help identify and articulate the need. 

We always talk to the founders and discuss the problem.  Working together we try and find a solution by adding missing ingredients to the team, sometimes even a new CEO.  Though more art than science, and sometimes fraught with real human emotion or ego, in our experience this kind of collaborative change should end up working out really well for all shareholders, especially the founders.  In one company, Momentfeed, the founder Rob Reed built the company to a certain level and then, as an example to so many founding teams, helped lead a successful search for a new CEO.   

Under new CEO Robert Blatt’s direction, Momentfeed has since more than doubled in size four years in a row and just landed significant incremental financing from our colleagues at Level Equity to expand the business.  I give HUGE credit to Reed for managing this process with such integrity – I’m sure it wasn’t always easy. But the outcome is undeniable.  Here is an interview with CEO Robert Blatt, in which he discusses the transition, the company’s evolution and the his mission and vision for the future.

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“Darth Ventures” and the efficacy of Sith management techniques

By Scott Lenet

Everyone loves to joke how venture capital is the “Dark Side,” and most of the VCs I know are good-natured about simply accepting the comparison. It’s probably better than “vulture capital,” which was how we were ridiculed when I first started in the business in the early 90s.

At my prior fund, my DFJ Frontier co-founder David Cremin coined the term “Darth Venture” in the early 2000s in one of his all-too-frequent clever moments, so I suppose we bear some responsibility for propagating the rhetoric that VCs are like the Sith, the champions of the Dark Side. (Click here to read David's original article)

While I personally identify with (young) Obi-Wan Kenobi, sometimes you just need to lean into the dominant discourse in your industry and accept how others view you. With that mindset, I thought it would be interesting to explore whether there is anything constructive that venture capitalists can glean from the Dark Side.

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