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Panel of investors agrees that there is no Series A crunch, but that it IS getting harder
New York City got the Vator treatment on Friday with the first ever Venture Shift NY, and the shebang closed with a final panel on super angels, micro VCs, incubators, and options buyers to find an answer to the question, “Which early stage strategy is best?” Lee Hower (Next View), Lewis Gersh (Metamorphic), Micah Rosenbloom (Founder Collective), Hadley Harris (Eniac), and moderator Ezra Roizen (Ackrell Capital) took to the stage to volley the question around.
Ezra: “If you’re at the top of your game, there’s a lot of stuff you could be doing—why pick what has to be one of the toughest parts of the economic spectrum?”
Lee: “For us, we see that while the risks and challenges of being early stage investors, there’s also a reward. Typically if you’re a seed or Series A investor, those are the lowest cost rounds. There is a reward commensurate with your investment.”
Micah: “I was a little late tonight because I was putting my 4-year-old to bed and it’s hard raising two kids…some people might say that later on, after knowing what you’ve gotten into, you’d have thought better of it—I think the same way about startups. There’s a lot of blood, sweat, and tears. I’ve been a part of three founding teams, I’ve seen two couples meet at a startup and get married…products have come to market where family members have been like ‘I saw your product at the dentist!’ It’s incredibly satisfying. You can go to Wall Street every day and move money around, but to create a legacy is much more rewarding. There’s nothing more satisfying.”
Lewis: “It’s about passion. Being able to work with entrepreneurs who are willing to risk their name in front of their friends and family…it sounds campy, but that’s cool. I love working with entrepreneurs. They have the hardest job. They risk failure in front of the world. The VC has the easy job.”
Ezra: “Do you worry that next year is going to be a bad year?”
Lewis: “Having been through it twice now with Bubble one and then with Lehmann…it absolutely does happen. With Lehman, there was more visibility, people knew there was a bubble. We don’t want people out there doing beach-muscle rounds and raising huge amounts of money. We want people to skip a round—not avoid a round entirely.”
Micah: “My thought is—don’t watch the stock market. Nobody has a freaking crystal ball. You have to be cognizant of macro economics. Build a good business, generate revenues: good things will happen. You just have to wait it out. Is there a bubble—isn’t there a bubble? You just have to focus on the motherhood and apple pie type stuff and not get too caught up with trying to predict the future.”
Lee: “We think it’ll become a little bit more difficult for companies, whether it’s the first quarter of 2012 or the second quarter of 2013, we don’t know. Contractions also create opportunities.”
Ezra: “Does the word ‘pivot’ scare you as an early stage investor? It terrifies me…”
Hadley: “I tell our entrepreneurs not to use that word. It doesn’t scare me if it’s early enough, but the word itself bothers me.”
Ezra: “It sends shivers down my spine.”
Micah: “Entrepreneurs are always pivoting…But I tell them, ‘guys, remember, in basketball when you pivot you have one foot on the ground. If you’re not leveraging something that you’ve already done, that’s not a pivot.’”
Ezra: “Are you seeing a Series A crunch?”
Lee: “No. It’s harder than it was a year ago, but I’m not seeing a crunch.”
Micah: “No, but there are signs that it’s getting harder and harder…with so many seed deals being done, you have to think of a funnel. More stuff at the top can’t get to the middle.”
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Joined Vator onMicah is a serial entrepreneur, he is currently CEO of Novophage, and previously co-founded Brontes Technologies. and Handshake.com. Micah is also a Founder Partner to Founder Collective.