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Robert Simon's Ariva Ventures is looking to make early-stage investments in startups that are attacking one of the following five markets: networking, semiconductors, mobile applications, medical devices and enterprise software and services.
The firm's structure is a bit unusual because it has only two general partners, instead of the usual five or six, and another five professionals that Simon calls industry partners, each of whom have expertise in Ariva's areas of investment focus. In a typical venture firm, according to Simon, there are typicaly four to five general partners and one to two venture partners. The general partners are responsible for making the investment decision, and they typically end up on eight to 10 boards. So, a typical venture firm is "personnel or capacity constrained." To this end, Simon says he's interested in a more collaborative process.
"We've inverted the partnership model," says Simon, who was a founder and investor in dotBank, an online, person-to-person payments company that was bought by Yahoo for more than $100 million at the height of the bubble in March, 2000.
Although Yahoo used it as the basis for Yahoo PayDirect, a competing service to PayPal (now part of eBay), by early 2005 Yahoo had scrubbed the product.
Simon, formerly a partner with Alta Ventues, says the firm is currently investing a relatively small-sized fund of $100 million and is looking to make relatively small investments at the seed stage of a startup life, much like an angel investor would. His investments range between $200,000 and $500,000, and at times as much as $2 million.
He's going in that direction because of the fierce competition among early-stage venture funds, which typically raise around $400 million and invest in 20 or more companies.
"It's hard to do early stage investing when you're initial investment is $20 to $30 million," he says. By going downstream to the earliest stages, and partnering with experts to provide guidance, Simon hopes his model will provide the best stewardship for new companies.
(Bambi's note: I recently went to one of Robert's gatherings for companies he's invested in or advising. I have to admit, as a CEO seeking guidance about the investment environment, technology and marketing, it was very well-done and informative.)
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