One lonely, stressed-out startup dude has caused a stir on Hacker News today, with the introduction of a Tumblr called My Startup Has 30 Days to Live. It’s exactly what it sounds like, a cri de coeur from someone whose company is likely headed into its death spiral.
According to the anonymous entrepreneur, his company was “bootstrapped, lean and already providing (in a small way at least) for the needs of my family and that of my co-founder” when it entered an accelerator.
They were quickly talked out of their desire not to raise a seed round and became “thoroughly convinced that we had to continue on the VC rocket-ship in order to matter to anyone.” With the VC money came advisors who told them things like, “Cut out that pesky client that generates 80% of your revenue, they’re a distraction on the road to executing $OUR_BIG_VISION.”
The Real TechStars of New York
In a recent blog post about the Series A crunch for consumer Internet startups, Fred Wilson wrote, “now that the momentum/late stage wants enterprise, we should expect the layers below to give them enterprise.”
Flybridge Capital Partners, an early-stage VC firm with a focus on enterprise startups and companies that support infrastructure for consumer-facing startups (like 10Gen), is well positioned to capitalize on that trend. In September, the Boston-based firm opened an office in New York City, moving principal Matt Witheiler out to join the team. And today Flybridge leading a $5.05 million Series A round in BetterCloud, an enterprise startup that provides cloud management tools for Google Apps.
Seed Stage Slaughter
At any startup accelerator, Demo Days are a relentlessly upbeat affair–a parade of promotional pitch decks and stats about market size that somehow always reach up into the billions. But in New York City, Techstars’ biannual showcase takes the cake.
Founded in Boulder, the program launched in New York in 2011 (just as the startup scene cried out for tent poles to rally around) and easily fills auditoriums. Companies often announce “soft-circled” funding or even that the round has already closed. Mayor Bloomberg even called the number of investors who fly to New York to check out presentations, “proof positive that the TechStars is going to change this world and certainly change America and this city.”
Or as TechStars mentor Joel Spolsky put it before introducing one of the startups at Webster Hall: ”Time to get my company oversubscribed.”
Betabeat has been writing about the crunch for seed stage startups looking to raise series A since August of this year. The debate over this trend is now in full flower, with VCs divided over whether or not there is a reckoning in the works.
Regardless of what position you take on the series A situation, it’s clear that 2010 saw a surge in seed stage investments. Pulling data from crunch base, Alexia Tsotsis found seed investments grew substantially while A rounds stayed flat.
As Josh Koppelman of First Round Capital writes on his blog today, this is reflected in the amount of time his firm spent evaluating new deals before deciding to invest. Over the last four years, the amount of time it took for a Read More