Redeye VC

Josh Kopelman

Managing Director of First Round Capital.

espite being coastally challenged (currently living in Philadelphia), Josh has been an active entrepreneur and investor in the Internet industry since its commercialization. In 1992, while he was a student at the Wharton School of the University of Pennsylvania, Josh co-founded Infonautics Corporation – an Internet information company. In 1996, Infonautics went public on the NASDAQ stock exchange.

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An Obvious Success

Investing in pre-revenue startups is risky.  Seed-stage investors know that things typically don't go according to plan.  And sophisticated investors know that they will lose money in a good percentage of their investments -- with the expectation that they will make that back plus a nice profit in some of their other deals.

Today Evan Williams announced the creation of a new company, Obvious Corporation, that purchased the assets of Odeo (a company First Round Capital invested in).  As Evan wrote today in his blog, Odeo "was a humbling and highly educational experience."  And he concluded that although there was real value in what the team created, the structural constraints/requirements of venture investors were not a good match for the company. 

So he did something that amazed and surprised me.  He dug into his own pocket to return capital to his investors.  100% of our investment.  Evan did not have to do this.  His shareholders are sophisticated investors and we went into this with our eyes open.  We know startups are risky. 

The reason I invested in Odeo in the first place was because I wanted to make a bet on Evan – and his recent actions have shown me how right I was.  I continue to be a huge “Evan fan” – and should he decide to raise outside capital again, I hope to be his first phone call. 

In the meantime, I will be cheering for an Obvious success from the sidelines

Comments

jeff barson

It's refreshing to see a VC who's still a fan of an entrepreneure who didn't hit him a home run. I'm guessing it's from growing up on the other side of the VC/E fence.

Lee Hower

I read about this in TechCrunch and I have to say that I was utterly impressed. Obviously the financial commitment is unique, but I think it takes as much courage to be honest with yourself and your board that the company strategy and investment goals have become misaligned.

ler

Some people are lucky to invest in the right corporation.

Justin

Definitely -- betting on the right people is far more important then betting on a stellar idea.

lv bag

It's refreshing to see a VC who's still a fan of an entrepreneure who didn't hit him a home run. I'm guessing it's from growing up on the other side of the VC/E fence.

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