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.

Read more or visit First Round Capital

Monthly Archives for 2010

View the older monthly archives »

Happy Holidays...

Frc It was sometime in August when I first saw the Where The Hell Is Matt video. It had just gone viral, and unlike most other "viral videos", I thought Matt's video was moving, fun and uplifting -- it was a great way to showcase the differences and similarities between 40+ different countries.

Then I had the idea. What if we filmed a similar video with our 40+ portfolio companies. And thus began the quest to film our holiday video. My partners and I kept our Flip cameras in our briefcases, and starting in August, whenever we went to visit our portfolio companies we invoked the "dancing" clause in the term sheet. As you can see, we all had a blast.

And then the market crashed. My partners and I discussed scrapping our little holiday project. But the more we talked about it, the more we were convinced that we should continue. While our companies were all facing up to the new realities -- and in some cases, making some tough choices -- it didn't mean that they couldn't take 15 seconds to have some fun. In times of adversity, maintaining perspective and an espirit-de-corps is even more important than ever.

I look forward to "keeping on my toes" this year with all of you. Best wishes for a happy and healthy holiday season -- and let's hope we all have something to dance about next year...

Road Trip!

6a00d83452d6c969e2010535d9dd6d970b-800wiAs we've grown First Round Capital over the last several years, I've come to believe that there are three types of value-add that venture capital firms can add to portfolio companies. 

  • The first is the money.  There is no differentation or value-add here.  Every investor's money is the same.

  • The second is the value that the specific people (partners, principals, associates) at a venture firm add.  Let's call it "people" value.  Can your VC help you with your distribution strategy?  Can they help you build your team?  Can they connect you with a partner?  This value is dependent on the skills and rolodex of the particular VC that a startup is working with -- as well as the amount of time they can allocate to your company.

  • The third level of value is what I call "structural" value.  This is the value that the firm can bring outside of any specific partner interaction -- it is scaleable, institutional value-add.  While I think that my colleagues and I add a tremendous amount of "people value", we really spend a great amount of effort trying to add structural value to our portfolio companies.


This is why we hold our annual CEO Summit - which has featured speakers from Corporate Development at major Internet players (such as Google, Yahoo, AOL, CBS, Microsoft, and Fox Interactive), Bloggers and press (like Michael Arrington and Henry Blodget), evangelists from up-and-coming platforms (like Facebook and Amazon), and valley veterans (like Marc Andreessen).

It's why we have operate a well-used mailing list for our portfolio company CEO's and CTO's to share best practices and ask each other for assistance. 

And it's why we just completed our "First Round Capital Agency Days" in New York City this week.
 
As we worked with our portfolio companies, one of the things we’ve been hearing loud and clear is that our advertising-related companies would like to have deeper relationships with large ad agencies. 

So this week my partner, Chris Fralic, organized a two-day road trip to the four largest advertising agencies in country.  We rented a bus, and drove our companies to meet with WPP, Digitas, OMG and Universal McCann.  This gave our portfolio companies the opportunity to present to over 100 media buyers, account executives and strategists.  These four agencies control a major portion of total US ad spending.  The response was so strong that we’re going to do it again in the spring.  

Thanks to all the companies (below) and agencies for making the event so successful -- and Chris for organizing a wonderful event!

Companies

The Business of API's

Logo_apiconference


First Round Capital portfolio company, Mashery, will be hosting their third annual Business of APIs conference, coming up on Monday, November 3rd in San Francisco.

As its name suggests, "The Business of APIs" is not a technical conference. It is a place where the people responsible for bringing in revenue, building traffic or building content syndication channels will learn how some of the most prominent and successful media and internet companies are enjoying significant growth through building a web services distribution channel.

In this one-day conference you will learn from companies that have executed API strategies to reinvent their businesses. They will share why and how they did it, what they expected to achieve, and how they are measuring success. It will be a day of real-world advice and lessons learned from many of your peers who are already part of the Web's Industrial Revolution.

Confirmed speakers include:

  • Heidi Tucker, VP of Business Development, Hoover's
  • Marc Frons, CTO, New York Times
  • Mike Hart, Director of Engineering, Web API, Netflix
  • Daniel Jacboson, Manager of Application Development, NPR Digital Media
  • Clay Webster, Associate Vice President Platform Infrastructure, CBS Interactive
  • Michele Azar, Vice President of Emerging Channels, Best Buy
  • Allen Hurff, Senior Vice President of Engineering, MySpace
  • Aaron Patzer, Founder & CEO, Mint.com
  • Quentin Hardy, Sr Editor and Silicon Valley Bureau Chief, Forbes

This is only a partial list of speakers; more will be announced in the coming days. Information about the conference can be found at: http://www.apiconference.com

Use the discount "BAPI" code and register for only $199 - a savings of 33%!

First Round Capital Office Hours (and Free Coffee)

OfficehoursCORRECTION - My initial post had the wrong date.  The correct date is Tuesday, October 21st.

We live in interesting times.   Despite the recent doom and gloom forecasts for startup companies, we at First Round Capital are still investing in new companies and actively seeking talented entrepreneurs to back.  My colleagues on the west coast are holding our first Office Hours next Tuesday.  As Kent wrote in his blog post:

"At Office Hours, we’d love to meet with entrepreneurs, people thinking about becoming entrepreneurs or folks who would like join a start-up. We’ll be available for a bunch of informal ~15 minute chats. There’s no agenda. Ask us what we think of the market environment or share an idea for a company – we’ll be sure to have plenty of napkins available to help draft that first product plan. We’ll listen, share our perspective and pay for the coffee (which may be of more value than our advice).

When: Tuesday, October 21st , 11am – 1pm
Where: University Café, 271 University Ave, Palo Alto, CA 94301

All are welcome -- if you think you'll drop by, please RSVP, so they can get a sense of how many people are coming.   I'll be in town that week, so I'll be there from 11 until noon...

LeaveWallStreetJoinAStartup.com

For years, one of the biggest challenges facing New York city based startup companies has been the competition for technical talent.   It was very difficult for a venture-backed startup to compete with the compensation packages offered by the big investment banks.  Stock options had a hard-time overcoming oversized cash bonuses.

While no one is happy with the turmoil we're seeing facing the financial services sector, and no one is happy to see mass layoffs, this does represent an opportunity for startup companies to attract seasoned, technical talent.  With Bear Stearns laying off over 7,000 employees, Lehman Brothers rumored to layoff over 20,000 employees, and Merrill Lynch expected to layoff thousands after their sale to Bank of America, we're on track to see over 150,000 people lose their jobs this year.

If you are one of those 150,000 employees, you might want to consider joining a startup.  These days, startups are more stable than Wall Street (seriously).  And while a startup probably won't offer the creature comforts of a job in the financial services industry, startups offer different benefits.  You get to participate in the creation of something new.  Your work makes a direct (and clear) impact on the success or failure of the company.  No more politics, endless meetings, or multi-layered organization structures.  Plus, you'll likely get stock options to share the upside.

That's why I launched LeaveWallStreetJoinAStartup.com -- a website highlighting great job opportunities at NY-area startup companies.  If you're looking for a job in NY city, check it out.  If you're a startup looking for talent, send me your job postings at jobs@leavewallstreetjoinastartup.com and I'll add it to the list...

Announcing FundingSleuth.com

Srvcfinancial_servicefinancial_we_2 About 10 years ago, I helped create a web service called Company Sleuth.  The basic premise was that as a company conducted its business activities, it would leave a "paper trail" online.  And Company Sleuth tried to find that trail by automatically searching a variety of public databases (such as the US patent database, trademark database, domain registrations, job listings, etc.) for "clues" about all US public companies activities.  Users would tell Company Sleuth the companies they cared about and receive a daily email containing a list of all new "clues" that were found.

The service found some interesting data.  For example, while in beta we saw that the domain name "daimlerchrysler.com" was registered by Skadden Arps (Daimler's law firm) days before the deal was announced.  And we also noticed that MCI Worldcom registered skytelworldcom.com just days before they announced their merger, causing their stock to jump 16% and  prompting an SEC investigation.   

Unfortunately, Company Sleuth is no longer around (although I found an old version of the site on archive.org).

Last month I blogged about the Reg D and stealth mode.  And after I wrote the post, I got to thinking:  Why not create a tool that checked the SEC database every night for changes on the companies I'm interested in?  While the SEC doesn't provide you the details on the financing (amount, investor, etc), at least I can know if financing activity took place.

So I went to Rentacoder.com, got connected with m4k3r (a developer in Australia).  A few days (and $200) later, I had a tool built that would check the SEC Database for me.  Rather than keep this to myself, I've decided to open up the site to anyone.  So today I'm announcing the launch of  FundingSleuth.com.

Read about an interesting new company on Techcrunch?  Want to see if your competitor raised money?  Add the company to your list at  FundingSleuth.com  and you'll receive an email whenever there is funding activity.

Let me know what you think...

VideoEgg

Videoegg_logo First Round Capital portfolio company, VideoEgg, today unveiled several cool new features to make  video and rich-media advertising far more engaging.  Take a firsthand look at some examples in VideoEgg's Ad Labs:

LIVE: Use real-time RSS feeds to continually update the ad experience
LOCAL: Deliver zip code-specific messaging
RICH: Easily deploy and track a rich multi-video ad experience to increase user interactivity
SHOP: Brings the browsing experience to the user, updated real time
SHARE: Viral capabilities help spread the message through virtually any communication or social channel

The Story of Francis Bates

MailboxI've spent some time the past few weeks researching the life of a little known Silicon Valley entrepreneur named Francis Bates.  Here's his story:

Francis Bates was born in 1847 in Rhode Island.  His mother, Amy Ann, passed away when he was just 11 days old.  During his childhood, young Francis needed to assume many of the household chores -- make his bed, take out the trash, and fetch the mail.  While making his bed and taking out the trash weren't that bad, Francis really hated fetching the mail.  You see, the Bates house was located off the beaten path -- and pretty far from the main road.  And since his Dad wanted to read the mail immediately after it was delivered, Francis was constantly checking to see if there was mail in his mailbox.  In fact, Francis spent most of his mornings walking back and forth to his mailbox.  Most of the time it was empty, but from time to time he would find something in it. 

During the Civil War, Francis joined the Army and was injured.  In pursuit of health, Mr. Bates came to California in 1896 and settled in San Jose.  Like his childhood home in Rhode Island, his house in California was also a great distance from the road.  Francis really disliked the wasted time (and effort) he spent checking for mail - especially due to his injuries.  And in 1899, he had an idea.  Why not invent a flag that can be put on the mailbox to indicate whether the mailbox was full or empty?  Thus, the birth of the mailbox flag.  As Francis wrote in his 1899 patent (USPTO #627,635):

If the carrier is obliged to inspect every box to know whether there is any mail-matter to be collected, or if the people for whom the box is placed are obliged to go to the box in order to find out whether any mail-matter has been deposited for them, there is considerable loss of time; but by arranging some signal which is displayed for the carrier when there is any matter to be collected from the box and another to be displayed for those using the box to show whether anything has been left for them it will not be necessary to go to the box except when there is something in it to be collected.


Thus the birth of the modern mailbox.  Francis Bates became one of the first Silicon Valley entrepreneurs and grew extremely wealthy off his novel mailboxes.  They couldn't manufacture enough of these mailboxes -- "For nine years this firm turned out some 10,000 boxes a month, and then the demand was greater than they could meet".

The Internet today, is a lot like mail delivery in the 1800's.  Surprisingly, web services don't have "flags".  Rather, applications are forced to "ping" Flickr, YouTube, Twitter, etc. every few minutes and ask "have any of our users done anything new?"  These applications are literally checking to see if each virtual mailbox is empty/full every couple of minutes.  Now that more and more services are aggregating more and more updates, the growing volume of pings has created real scaling challenges for services (such as Twitter) and consumes a rapidly growing amount of bandwidth and resources. 

That's why I'm so excited about our investment in Gnip.  Yesterday, Gnip unveiled it's plans to solve the "ping problem".  In layman's terms, Gnip hopes to be the mailbox flag for the 21st century.  Rather than having to check for updates from services like Flickr, Digg, and delicious, Gnip pushes all relevent updates to you.    Read more about it here and here.

I think that Eric Marcoulier and the team at Gnip are well on their way towards becoming the Francis Bates of the Internet...

(You can read more about Francis on page 1014 of the History of Santa Clara - pdf download)

Welcome Christine and Kent

While First Round Capital has investments located all over the United States, our portfolio (and dealflow) is heavily concentrated on the west coast.  That’s why we opened a West Coast office two years ago, with the addition of my partner Rob Hayes and later Mazen Araabi to our team.  It’s why I’m going to qualify for Chairman’s Preferred on US Airways after my three trips to California this month.  And it’s also why I’m super-excited to announce the addition of two Principals in our San Francisco office – Christine Herron and Kent Goldman

I first met Christine while she was part of the investment team at the Omidyar Network, where we had several overlapping deals.  And this past year, Christine began working with us part time as a Venture Advisor, helping us out with a number of our new investments.  Her prior experience includes a number of entrepreneurial ventures in various capacities (including CEO).  And she started her career in venture capital at Geocapital Partners where she discovered a little company called Netcom before most people knew how to spell “internet.”

Kent’s journey to First Round Capital is a unique one – we truly were brought together by the "news feed”.  While I’ve known Kent for some time, we got to know each other much better this year when he was (unintentionally) ensnared in my ill-fated experiment with Facebook’s Social Advertising.  And, in an ironic twist you couldn’t script if you wanted too, the news of Kent’s new role at First Round Capital was also unintentionally revealed by Facebook’s pesky news feeds, as Kent blogged about earlier today.  Kent joins us from Yahoo, where he was a member of their Corporate Development team focusing on M&A to support the company's user-facing properties.  He also led business strategy efforts for Yahoo’s Front Page, Communications and Community products which included Yahoo.com, My Yahoo and Yahoo Mail.  Before Yahoo, Kent spent some time in investment banking and early-stage venture investing.

My partners and I are thrilled to welcome Christine and Kent to the team

The Steve Jobs of Classical Music

45256_254x191 I've been going to the TED conference for almost 10 years now -- and I've seen hundreds of incredible speakers take the stage.  Last year, Benjamin Zander - the conductor of the Boston Philharmonic, gave what I think is one of the best talks of all time.  Zander is the Steve Jobs of classical music. 

An online video of his talk was just released this week.  Ostensibly, his talk was about classical music.  But, in reality, Zander shows how in just twenty minutes one can expose people to new ideas, new possibilities and new passions.  He truly embodies his belief that "one of the characteristics of a leader is that he not doubt for one moment the capacity of the people he's leading to realize whatever he's dreaming".  I especially liked his realization that since the conductor of an orchestra doesn't make a sound, he depends for his power on his ability to make other people powerful.  His job is to awaken possibility in other people.


Take 20 minutes out of your day today and watch this talk.   You'll see an moving example of leadership, evangelism and passion.  And see how a leader can make your "eyes shine".