Last week I had the opportunity to attend the first Colorado Open Angel Forum (OAF). The OAF was born out of the frustration of some well-known investors including Brad Feld (An Angel Investor Group That Makes Me Vomit), David Cohen (An Offer To Funding Universe) and then inculcated and formed by Jason Calcanis (Why Startups Shouldn’t Have To Pay To Pitch Angel Investors) and others. Their frustration was with organized angel groups charging entrepreneurs to “pitch” their ideas, sometimes as much as $10,000 for the privilege.
My purpose here isn’t to debate the issue though I do fall on the side of the fence that believes it’s somewhat perverse for a bunch of angels to charge startup entrepreneurs on a shoestring budget a lot of money to sit around and eat hamburgers and listen to the entrepreneurs’ pitches. The OAF event itself was absolutely terrific. Don’t take my word for it, here’s a post from one of the entrepreneurs who presented and here’s another and another, and yes, another.
As successful as the event was, what’s even more intriguing to me is the continuation of a theme that I’ve been witnessing over the last year or two. Guys like Brad, David and Jason are part of a groundswell of younger investors who are steadfastly determined to grab the crusty old venture capital industry and shake it to its very core.
You see, these guys didn’t go through a ton of effort recruiting 30 qualified investors from near and far, getting sponsors for the evening, securing a meeting place, and going through about 100 applicants for personal gain. They did it because it was the right thing to do; to set an example for angel organizations everywhere that it’s about the entrepreneur.
The venture industry has been the favorite whipping boy of the media for almost two years now and deservedly so. Dismal returns throughout the last decade have tarnished a once-noble industry. My partner Phil (who raised venture capital from the legends of the venture industry in the 70s & 80s when he was building ComputerLand and BusinessLand) often regales me with tales of VCs like Tommy Davis of Mayfield and Mike Kaufman of Oak, people who built the venture industry on the backs of their genuine passion for helping great people build great businesses.
As we all know, somewhere along the way, the venture industry lost its way. It would be easy to sit here and play the blame game but when vast sums of money become easily available and fortunes can be amassed in short periods of time, human nature takes over and good people act irrationally. That’s not a phenomenon to be placed at the feet of venture capitalists, but at the DNA of any capitalist. I’m not defending the actions of the industry in late 90s, merely trying to look back through a wider lens.
So how does this relate to the OAF last week? Well, guys like Brad and David remind me of those groundbreaking VCs that Phil always talks about. I know Brad and David well. I admire the hell out of the astonishing amount of energy and passion they pour into their love for entrepreneurs. They’re incredibly accessible and freely give copious amounts of their time, not just to their portfolio companies, but to any entrepreneur trying to build a business. They’re great role models for any young investor, either institutional or angel.
What’s really encouraging is that there’s a whole generation of guys just like Brad and David. Well known guys like Josh Kopleman of First Round Capital, Fred Wilson of Union Square Ventures, Jon Callaghan of True Ventures and Bo Peabody of Village Ventures are leading the way and setting examples for a whole new generation of authentic, high-character venture capitalists who are building right-sized firms filled with “changing-of-the-guard” partners intent on bringing some much needed respect to our industry. Folks like Jeff Clavier of SoftTech VC, Dave McClure of Founders Fund, Trevor Loy of Flywheel Ventures and Bryce Roberts of OATV are just a few examples of younger investors who are quietly building terrific smaller firms that entrepreneurs feel great about working with. Okay, so maybe Dave’s not doing it that quietly…
I’ll wrap this up with a story about Dave from the OAF in Colorado last week. I was sitting next to him and talking to him about a recent blog post he had penned. If you know Dave, you’ll know that he’s nothing if not brash and outspoken. He’s also one of the brightest guys I’ve ever met and has more passion about helping entrepreneurs build great businesses than most people have about anything in their lives. After a successful career in technology, Dave’s been part of the Founder’s Fund and also has been making a bunch of angel investments (with some terrific success) and is now in the process of raising his first venture fund, focused on making seed investments in web-based businesses.
When I pressed him on his post in which he challenged some of the core foundations of the venture industry he laughed and then broke into a big grin and said “I’m gonna blow the whole goddamn thing up. VCs have told entrepreneurs for years to innovate; yet they’re too chicken-shit to do it themselves.” I’ll tell you what, not only wouldn’t I bet against him, but I think he’s spot on.
It’s funny. It wasn’t that long ago that when people asked me what I did for a living, I’d mumble something about being involved in “investments.” That’s changed these days. When it means being associated with the likes of the folks above, I’m proud to say that I’m a venture capitalist.