(rso.cornell.edu)

An interesting question showed up in our Quora digest email this afternoon. "What is the worst part of being a VC?" one user wondered. No, "sexism" wasn't one of the answers, but apparently there are quite a few grievances for the partners on Sand Hill Road. The main complaint? Turns out there sure are a lot of assholes in the VC business.

An anonymous poster who claims to be "a VC general partner for nearly 10 years at a large brand name fund" posted the following missive:

But if forced to pick - the worst parts of the job are:

1. Dealing with your partners. At a large fund, there are lots of partners. And what it takes to become a partner at a big fund and stay there for years is often a high asshole factor, ability and desire to deal with firm politics and internal jockeying for power.

Don't get me wrong. There are some great great partners.  But I think 2/3rds of the people in the GP ranks at big firms have massive egos.

He added, "As one LP put it 'VCs have more ego per dollar of return than any asset class we know of.'" Dude's got jokes!

The poster continues to elaborate on the ways this assholery manifests itself, including being a partner in name but not actually have control, and "crazy backroom politics," where VCs agree, "'You vote for my deal at a Monday meeting and I will vote for yours.'"

The answer received 23 comments, almost all of them gushing in their approval of the poster's honesty. Roger Ehrenberg, a managing partner at IA Ventures, lauded it as "a truly brilliant and candid response."

We can't disagree. In fact, all of the answers to the thread provide some compelling insights into the walled garden of venture capitalism.

Ramy Adeeb, a principal at Khosla Ventures, was more blunt about the drawbacks: "Wasting your life cheering on the sidelines instead of making things happen." Do we detect a hint of bitterness, good sir?

Other cons mentioned:

• The fact that VC is an inherently lonely business.
• Having to say "no" all the time.
• Dealing with the failure of a company you invested in and really believed in.

In the end, we're more partial to VC Mark Suster's response: "You'd have to be a pretty big baby to complain about being a VC." It does seem like a pretty cushy gig, at least for dudes.

Mr. Ehrenberg

IA Ventures, the New York City-based firm with a big data fetish, just announced that it raised $105 million towards a second fund. That's more than double the $50 million seed fund IA Ventures founder Roger Ehrenberg raises in 2010.

With this new fund, Mr. Ehrenberg told TechCrunch, IA Ventures will be able lead seed rounds as well as series A and B rounds and follow a company through its growth. Previously, IA gravitated towards pre-revenue companies “between a Powerpoint and a prototype.” Those companies, says TechCrunch, require more "hands-on work," and with Fund II, IA Ventures will be able to diversify its portfolio into both seed-stage and later-stage companies.

TechCrunch's post on the new fund set off a chain of negative responses on Twitter, unrelated to IA Ventures, but rather to do with a theory Erick Schonfeld slipped into the piece about the difference between East Coast and West Coast investors below.

In fact, there seems to be a divide between East Coast and West Coast superangels. “There is a huge ideological argument right now at play,” says Ehrenberg. Investors like Ron Conway, Dave McClure, and even Clavier make a lot of small bets—60, 100, or more per fund—hoping a few of them will pay off massively. They know that somewhere in their portfolios could be the next Google or Facebook. The East Coast seed investors are a little bit more cautious (they would say “disciplined”). Ehrenberg models IA Ventures more like a small Union Square Ventures or Foundry Capital—a more concentrated portfolio where the investors use their contacts or domain expertise to help take some of the risk out of the companies.

“The optimal point on the risk-return frontier,” says Ehrenberg, “is putting small amounts early, being close, and being in a position to put in more money when there is an opportunity to de-risk as opposed to holding a portfolio of lottery tickets and hoping that one of those lottery tickets looks like Google or Facebook.”

The idea that East Coast investors were risk-averse in particular, did not sit well with some, including Mr. Ehrenberg and IA Ventures's Ben Siscovick:

The contradiction Mr. Dixon seems to be getting at is the idea that small, pre-revenue investments supported by a hands-on approach are at odds with the idea of getting in on the ground floor with the next Google when it still looks like a long shot.

Reached by email, Mr. Dixon said, "Just look at the investments by Betaworks, Founder Collective, Highline, Thrive, Lerer, etc. Some examples companies: Tumblr, Tweetdeck, Pinterest, Uber, Fab, Artsy, Birchbox, Warby Parker, Makerbot, Buzzfeed, etc. It is a long list of great tech companies. In almost all cases these firms invested in the first financing round."

Sorry, Schonfeld, Conway vs. Ehrenberg is no Biggie vs. Tupac.

Visual Revenue offers media companies a unique Front Page Decision Support System for online Editors. The solution can predict the performance of a piece of content about 15 minutes into the future and provides editors with real-time recommendations on what content to place in which position on a Front Page and for how long.

Sounds like something BuzzFeed would be interested in. Wait, it sounds like something every web publisher would be interested in. But are we petty web readers really that predictable?

IA Ventures and Softbank Capital think so. The firms led Visual Revenue's $1.7 million round, which will be used to hire front end and back end engineers, a lead designer, customer engagement manager and business development manager and build Visual Revenue into the "Bloomberg terminal of the newsroom," as the company puts it.

"We've done REALLY well, since we spoke last," Mr. Mortensen said in an email, pointing us to the company's long list of customers: Forbes, Time.com, De Telegraaf, NBC, CNN Money, and Cox Media, among others. Visual Revenue appears to be doing exactly what it was doing in January of last year, we noted. "We are pretty proud of that," he said. "No 'pivot' for us!"

A year, a roster of more than 35 global media partners, and an endorsement from big data mogul Roger Ehrenberg? We're starting to worry this company may be able to predict the future or something.

Techies love high value dining.

The most interesting part of today's news that mobile advertising startup Place IQ had raised $4.2 million was that the Boulder, Colorado based company is packing its bags and heading to New York. Roger Ehrenberg, whose IA Ventures has been backing Place IQ since the seed stage, says it's the natural evolution of the company. "The partners and the clients are here. The engineering talent is here. They did a great job building out the core tech and finding some traction. But when it's time to scale, you want to stop living on an airplane."

New York as a hotbed for engineering talent is becoming a familiar refrain. But if Facebook is also opening an office in Silicon Alley to try and tap into these in-demand workers, won't hiring here become an absolute nightmare? "I think its actually two very different kinds of people," Mr. Ehrenberg said. "There are folks who appreciate the stability and scale of a Google or a Facebook and then there are want to be the big fish in the little pond and make their mark on a company."

Mr. Ehrenberg hinted that future funding announcements would be paired with a move to New York (okay, that's two; three times is a trend story). "The old line is that Silicon Valley VCs only want to fund companies in their backyard. We try and take a more flexible approach."

Having startups relocate to New York does give Mr. Ehrenberg a chance to flex his muscles as a recruiter. "I work with the engineering and data science folks at Columbia, so we can tap a ton of great young talent coming out of there."

There are outliers of course. TechStars NY grad ThinkNear, also backed by IA Ventures and working in the mobile advertising space, decided to head for Los Angeles after graduating from the accelerator. But with foursquare, Hyperpublic, Localresponse and many others, New York stands out as the nation's biggest hotbed for location-based tech companies.

The Coffee Shop in Union Square, located on the bustling corner of 17th St. and Union Square West, is famous for several things: the waitresses are models, it turns into a Brazilian dance club on the weekends, was voted Best Bar for Modelizers in the Village Voice, and New York says it boasts a "high risk of poor service and unpleasant encounters with attitudinal (but often pretty) people" but praised the crayons and puzzle place mats for kids. This noisy, WiFi-less den is famous for something else within the tight-knit community of Silicon Alley: it serves as the de facto meeting place for VCs and founders such as Union Square Ventures' Fred Wilson and IA Ventures' Roger Ehrenberg. "Pitch your startup to First Round Capital here. They're right across the street," says the Foursquare tip left by Charlie O'Donnell. 

But it seems that after years of fealty, New York's nerdiest investors are moving on. This morning Fred Wilson of Union Square Ventures, who checks into Coffee Shop at least twice a week, declared he'd had enough. "First day of #coffeeshopboycott (@ Friend of a Farmer w/ 2 others) [pic]: http://4sq.com/sE6vu3," he tweeted, inspiring a flurry of queries. In answer to Foursquare's Dennis Crowley, Mr. Wilson explained: "I can put up w/ mediocre food & bad coffee but when they disrespect one of their most loyal customers its time for #coffeeshopboycott." Mr. Wilson did not respond to an email asking him to elaborate. A few founders voiced their support for the boycott on Twitter.

As it turns out, Charming Robot's Dan Maccarone said he's been boycotting Coffee Shop for five years; Steve Schlafman of Lerer Ventures actually quit the Coffee Shop just last week. "Because New York values convenience, people will put up with mediocre breakfast food," Mr. Schlafman said. "Also, people like being seen there. I was kind of fed up with it."

He independently decided to start taking meetings at Friend of a Farmer, the only Union Square eatery with a worse name than "Coffee Shop," a few blocks away on 18th and Irving. The place fits his hippie sensibilities, he said. "Before I was trying to be more stealthy about it," he said. "It's all kind of a joke. My only concern is that after everyone starts going to Friend of a Farmer, whether [the restaurant] will even be able to handle it. It kind of sucks that Fred tweeted about it."

As for Coffee Shop, he says good riddance. "Look, that place is so overplayed," he said. "It's just convenient and it's kind of one of these things that stuck. New York is a place that values innovation and doing different things... I guarantee everyone will be going to Friend of a Farmer in two weeks."

Betabeat called The Coffee Shop to see if the restaurant was aware it had burned a few super users. Charles Milite, one of the owners, got on the phone right away. The cafe's not-so-active Twitter account followed in the voyeuristic tradition of power lunch spot Michael's by tweeting about which bold names were in the house. "British siren Rachel Weisz and Director hubby Darren Aronofsky having lunch at Coffee Shop with adorable son Henry Chance this afternoon," was the last tweet, in August. But Mr. Milite had never heard of Mr. Wilson or the boycott.

"I wasn't aware at all," he said. "I know that we have a lot of these young guy techie types. It's such a busy place and such a diverse clientele here that no one particular segment would completely hit us in the face. It's a pretty big place and its pretty active."

Indeed, there was cacophony in the background when we called around 2:30 p.m. in the waning hours of lunch, and of the 19,095 check-ins and 149 tips on Foursquare, less than a dozen pertain to the restaurant's critical role in Silicon Alley's economy.

"We don't like to hear that we're giving bad service," Mr. Milite said. "But I'll have to look into that and find out. He could have just had a bad experience."

We read him the tweet, which indicated a string of bad experiences.

"Interesting, okay. Well I don't know," he said. He said he would ask the general manager, Renee, who might know more.

In the meantime, Friend of a Farmer has started racking up the check-ins. Will Silicon Alley's finest be satisfied with the "cozy, country cafe," or will Friend of a Farmer (3,673 check-ins) fail the founder test?

Cinema verite.

Last week on the premiere of TechStars, the startups got the good news about their golden ticket into the inaugural New York class (more selective than Hahvard, didja hear?). Last night, the reality show's second episode (you can watch the whole thing here) focused on Lesson One: Humility--as in, it just might behoove you to get some. Fast. One startup picks up $1 million in funding. One startup goes to Hollywood to meet their idol. And we learn that you don't have to know a whole lot about gaming to throw around the words "gaming mechanics." Here's what you missed!

First things first, how can Betabeat score an invite to the weekly 10.10 pm parties Wednesdays at the TechStars loft? There appears to be pizza and shots of Johnny Walker. We want in.

In true reality show format, this week's winner (as determined by the judges mentors) gets a special prize: a chance to meet with their tech idol. Urban Apt's Caren Maio says Guy Kawasaki;  one of the dudes from Homefield says Al Gore "because he invented the thing." Pretty much right off the bat, the producers make it clear the lucky lady isn't going to be OnSwipe.

After finding out about a $1 million investment from Spark Capital while "chomping on a hamburger" at Wendy's, OnSwipe CEO Jason Baptiste comes into the TechStars loft a little too cocky. "'Mo money, 'mo problems," quips Mr. Baptiste and indeed an Antoine Dodson reference ("Hide your developers, hide your designers because we're hiring everybody") does not go over well with other finalists. "Let me give you some advice, I wouldn't tell the other companies you're trying to hire their people," says David Tisch on the special black-and-white David's cam set up in his office. OnSwipe appears confused. "We can hire their teams?" asks Mr. Baptiste. "No!" exclaims Mr. Tisch.

Hey, it's not Mr. Baptiste's fault they didn't get his sense of humor. "You know what, I like to speak in soundbites," he admits.

Next up comes the mentor speed dating, which is giving startups like ToVieFor, UrbanApt, SocratED, and Homefield mentor whiplash just in the first week. Homefield might like the emphasize their athleticism--and the Bloomberg TV producers might like to emphasize co-founder Reece Pacheco's chiseled cheekbones--but it's Union Square Ventures' Fred Wilson who agrees to mentor them and urges them to pivot into a bigger market that just sports: video.

Mr. Tisch, David Cohen, and Roger Ehrenberg, who function not unlike the prophetic Three Witches in Macbeth, are skeptical."Do they have the technical chops to go build something in a technical market where everybody else is lining up with Google engineers?" wonders Mr. Tisch. "The road is littered with video companies that have gone splat," says Mr. Ehrenberg. At least Mr. Pacheco picked a direction, earlier he said, "In the last week I've been sitting right on the fence about where to go and I fucking hate it."

Speaking of swears, even the announcer got in on the game. "It only takes a few mentor meetings for Urban Apt to realize they don't quite have their shit together," intones what we think is the Bloomberg voiceover. "Urban Apt at the beginning--coming in and thinking they're gonna dominate the real estate market in New York without a day in the real estate industry? Arrogant," says Mr. Tisch. "I think that's been a lot of my frustration seeing these companies think that they could do stuff without knowing how to do it/why they are he ones to do it."

Investors may be turned on by the notion of a gamification, but both ToVieFor's "Hurricane Melanie" and SocratED are struggling with layering in gaming without, well, quite knowing what they mean by that. "Maybe Angry Birds for fashion, or I dunno something not cheesy," says ToVieFor CEO Melanie Moore.

Lucky for SocratED Gary Vaynerchuk gives the startup a solid pro tip. After admitting, "[SocratED] was the one that was least in my zone. Learning? I don't like to learn," Mr. Vaynerchuk tells offers some advice on finding someone who's "Jedi" in gaming. "I highly, highly, highly, highly, highly, highly, highly recommend putting somebody on your board--and give them real equity--that comes from Zynga or Playfish or Playdome or one of these companies that really really really gets it." Afterwards, he tells the camera, "That could be one of the better mentor jobs on my part . . . because I'm completely right," before scrunching up his face in self-mockery.

In prescient bit for Ms. Moore, whose startup started winding down two months after Demo Day, she seems sanguine after a rocky meeting with a potential retailer wary of discounting their handmade handbags to play ToVieFor's game, "Even if we do totally fail and the company blows up, it's fine, it's a good thing," says Ms. Moore. "An investor is much more likely to invest in a failed--an entrepreneur who has done a startup and failed rather than someone who's a first-time entrepreneur."

SPOILER ALERT!!! The week's winner ends up being Wiji, who got to meet every tech blogger's favorite brainiac, UI designer John Underkoffler the man behind the futuristic devices and technology in Minority Report. That prize should cushion the blow when Wiji, which is now called Immersive, hears what the Davids & Co. said about their name. "Everybody hates the name," says Mr. Tisch, "Roger, what is your reaction to the name?" Mr. Ehrenberg, "I think Wiji is the shittiest name I've ever heard in my life. Easily top five shittiest. It sounds like a disease. Oh, my Wiji!"

The best takeaway, however, might be from Jeff Clavier, who urged Homefield, now ShelbyTV, to give investors a demo to look at during a pitch. "I was listening to you, which was interesting, but I was like what the fuck does that mean?" Mr. Clavier told Mr. Pacheco. "You never want the what-the-fuck to happen because some investors will try to engage and others will just check out and take their BlackBerry out."  Cue Mr. Tisch in the audience, tap, tapping away.

Vinny Vacanti's in all his televised splendor.

New York's tech set has finally hit the big time, you guys! At 9 p.m. EST tonight, TechStars new reality show premieres on Bloomberg TV. And the vaunted ranks of IRL housewives, spray tan-happy Italian-Americans, and people with something to lose have nothing on the drama of trying to fund, launch, scale, keep afloat--and especially name--your startup.

In fact, by our count, since January, the TechStars New York inaugural class has already had four name changes, one big win, one pivot, one abandoned idea, and one fail.

If you think about it, the reality show format is a natural fit for a seed stage accelerator like TechStars. Like America's Next Top Model and American Idol, you have the desperate audition to actually make it on the cast, only with PowerPoint decks instead of strutting and singing. Then once you're in, your work is constantly being scrutinized by a panel of experts, which makes David Tisch the Heidi Klum (albeit with a filthier mouth) to Roger Ehrenberg's Nina Garcia. But as every reality show "winner" can tell you, getting anointed by the powers that be doesn't necessarily guarantee success in the real world.

But you didn't think Betabeat would let you wade into the expletive-laced, frothy territory on your own, did you? Here's what you need to know before the premiere.

It's easy to tell what Bloomberg is going to play up from the way they cut the trailer. From the looks of it, that means Mr. Tisch is going to be the show's resident soundbite generator. In less than two minutes, he gets bleeped twice, tries his hand at amateur rapping, offers to show the finalists the door, and volunteers some real talk: "Okay you raised your money, stop being douchebags," which Betabeat may have to make a new tag.

Fred Wilson with HomeField, which birthed ShelbyTV.

Also baked into the trailer is a scene of ToVieFor's Melanie Moore giddily receiving the news that her startup, which started winding down two months after Demo Day, got accepted into TechStars. The clip also hints at the promise of a $5 million check, which went to SPOILER ALERT!!! the colorful Jason Baptiste and his startup OnSwipe, the mystery company identified back in January only as a “Platform for Tablet Publishing and Advertising.”

SocratED, which became Veri, with Twitter's Dick Costolo.

Other narrative arcs are likely to include startups that pivoted, such as HomeField, the online video analytics platform, which became ShelbyTV, a site that helps you find out which videos your friends are sharing. There's also FriendsList, the startup that wanted to make classifieds social, which graduated from TechStars but never raised money and isn't pursuing the venture. In case you're keeping track at home, here are all the name changes (NB: this can double as a drinking game): UrbanApt became Nestio, SocratED became Veri, Wiji became Immersive, and Relusions became ThinkNear.

Which entrepreneur or investor will end up this season's breakout star (i.e. the tech world's answer to Snooki) remains to be seen. But our money's on the exuberant Mr. Baptiste. Series Awesome!

Here's an exclusive clip of Urban Apartment (née Nestio) getting the good news:

UPDATE 7/26/2011

ThinkNear has announced that Google Ventures, who the team met during their time at TechStars NY, is one of its backers. Other investors include Metamorphic Ventures, Qualcomm Ventures, FF Venture Capital, Real Ventures, Zelkova Ventures, BoldStart VC, David Tisch, Bill Boebel, Ben Sun, David Cohen and Matt Turck.

"We had only planned to raise $1 million but got $2 million worth of interest before we stopped looking," says Founder Eli Portnoy. "We chose mainly to raise from the mentors we met through TechStars, people we knew could add value."

The company won't disclose how many clients it has yet, because it sees its "smart marketing engine" in competition for the same slice of the budget at restaurants and small businesses who might try out heavyweight services like Groupon and Living Social.

and now back your the original post...

- - -

There isn't a lot of buzz around the field of "yield management" these days. But while ThinkNear's seems to have settled on a boring tagline for their business, it actually sits at the middle of some of the most interesting trends in the much hyped mobile space right now.

Betabeat has learned that ThinkNear just closed their funding round, raising $1.63 million instead of the $1 million they announced at TechStars NY Demo Day back in April. The round, led by Roger Ehrenberg's IA venture's, includes a number of interesting investors.

"Its Sunday night, my kids are sleeping and I am back in the office listening to John type as he whips out some groundbreaking code," Founder Eli Portnoy wrote on his blog this week. The company recently had a bad experience with a contractor that left them with shoddy work which delayed their progress. But Portnoy's blog is filled with excitement about the company and burning the candle at both ends.

IA is all about big data. ThinkNear helps merchants by pulling together information from public check ins, weather, local events and more to help merchants maximize the flow of customers through their store. Portnoy and his co-founder John Hinnegan, earned their chops at Amazon, where they first conceived the idea for ThinkNear.

ThinkNear weighs all these different factors and delivers mobile ads and deals to nearby customers during times when business is slow. It's the kind of ad inventory that is going to be growing very rapidly over the next year, as services like Google Offers and Groupon Now compete to win the loyalty of smartphone users. ThinkNear wants to build an ad network for serving these sort of real time proximity based ads/deals.

Sisco kid

Roger Ehrenberg started with a career on Wall Street, but he's become one of the most respected and sought-after investors in the New York tech scene. He is the founder of IA Ventures, which recently raised a $50 million fund and invests "on the belief that managing and extracting value from massive, occasionally unstructured, often real-time data sets is a competitive advantage."

Ben Siscovick, a member of the investment team at IA, gave a talk at General Assembly this week to a packed house on the topic of big data. He was nice enough to throw the video up on his Tumblr, so for everyone who was stuck in the office and missed out, let Betabeat drop a little knowledge on ya.

IA Ventures - The Business of Big Data at General Assembly 7/12 Part 1 of 2 from IA Ventures on Vimeo.

Check out the rest of the session over at Mr. Siscovick's blog.

Mr. Suster, miming wrapping his hands around Twitter's data stream.

GRP Partners' Mark Suster announced yesterday that he and Roger Ehrenberg, at IA Ventures in New York, are co-leading a $6 million investment in DataSift, a London-based data platform for third-party developers, brands, and publishers to capture real-time data. Although based out in L.A., TechStars just named Mr. Suster as a mentor for its new New York class. Mr. Suster has certainly made no bones of tweeting his pom-poms at local start-ups. Mr. Ehrenberg, on the other hand, has had his heart set on data mining. "As a former hedge fund guy, Roger immediately saw the value in helping companies better sift through the masses of data; often to gain better insights into financial information," writes Mr. Suster on Both Sides of the Table.

News of the funding came just as Twitter announced that it hit the one-million-mark for registered apps, which the company says is "fueling a spike in ecosystem growth" in areas like analytics. Indeed, Mr. Suster described his investment in DataSift as "doubling down on the Twitter ecosystem." Although DataSift provides multiple live data feeds from sources like Facebook and LinkedIn as well, Mr. Suster says Twitter is by far the most dominant source of "the real-time publicly available data that exists on the Internet today." Twitter has granted DataSift "re-syndication rights," which means DataSift has access to the electronic fire hose of data that is Twitter and can sell subsets of the stream to interested parties.

According to PaidContent, Twitter has only granted those rights to one other company, but DataSift "might be one of the only ones making money off it." You may recognize DataSift from the green "Retweet" button you see on third-party sites and Tweetmeme.