For quite some time now, I've been saying that New York City needs more dedicated early stage capital. Having an office and people on the ground here build community and human capital infrastructure. Doing it from a dedicated pool of long term, early stage money insures that ecosystem will be more permanent. You can't jump in and out of early stage depending on the temperature of the market, or do this as a "test" to see if you really want to be in this game. It's also really difficult to support the innovation community here when no one in your firm can ever stay out late in the city when the entrepreneurs are just getting started.
That's why I'm excited to announce that not only will I by joining First Round Capital, but, more importantly for the NYC startup community, they are going to be opening up a dedicated New York office in the Shakeshackville or Union Square area.
I’ll be full time in NYC as an Entrepreneur-in-Residence looking at deals (which you can send to me at charlie@firstround.com) and setting up an office here. I don't mean just building Ikea furniture, but also helping strategize how to best support and inspire startup success in the Big Apple through engagement, conversation, and strategic support of community building. Helping to build up a firm's physical and virtual presence, as you probably know, is something I've been a part of before.
I’ll be ramping up my efforts to support the local innovation community through nextNY and other projects. The more I can help local entrepreneurs, the better the opportunities will be for any early stage investor in NYC, and the better I can do actually proving out the First Round Capital value proposition. NYC entrepreneurs want and need investors who prove valuable in helping them create successful businesses—and what better way to do that by supporting them even before formal business relationships are built. The entrepreneur is the customer of a VC firm and in today’s world, customers have choice. We need to give a lot more upfront if we expect to get your business.
How did this all come about? Well, not surprisingly, the open dialogue I’ve been having with the innovation community on my blog for over five years is how it happened. After I wrote my “Free Business Plan” on how to start a VC firm in NYC, Josh Kopelman approached me at the Shake Shack. He told me how much they believed in NYC as a major opportunity for them, as it has been with all the deals they’ve done here already. We talked about our shared a vision of the kind of active, open, community focused firm that NYC needs. They’ve already done 12 NYC deals, and the FRC team spends a fair bit of time here already. This is a signal that they believe in NYC enough to make a commitment to being on the ground here in a more substantial way. It's also a reflection of the fact that you can better serve the local community if all the hours that you spend here aren't squatting in other people's offices.
So what about Path 101?
You’ve probably seen the math—half of all funded startups don’t make it and become zeros, a bunch go sideways, and then a select few shoot the lights out and return your portfolio several times over. Well, suffice it to say that Path 101 isn’t going to be one of the shoot the lights out deals, but I’m cautiously optimistic that it isn’t going to become a zero either—and may even have some upside. It's definitely not going anywhere. It may just take some time to return what went into it—more time than it’s cash resources will allow.
The three of us—myself, Alex, and Hilary—are no longer going to take a full time salary, small as it had been, from the company after September. We’re just a couple of weeks away from launching our first revenue generating features—thanks to their hard work on the technical side—but those features probably won’t ramp fast enough to sustain a full time commitment for a team of three. Therefore, Alex and I will move to a nights and weekends approach—a “born again” startup if you will. Hilary will move on.
I'm excited to share that Alex will be joining Betaworks as Hacker-in-Residence. It's a fantastic cultural fit. He'll continue to support Path 101, especially through an upcoming feature launch, and trim the hedges, mow the code, and occasionally (albeit much less frequently I hope) fall asleep tweaking a server in the wee hours. However, his main focus will be on building awesome stuff FRC can invest in. :)
Hilary is seeking out cool data problems and will undoubtedly have more opportunities than she can handle--that is, until she optimizes the code and database structure in her head. Then, she'll take on even more.
Alex and Hilary have been incredible from day one and I have been extremely lucky to work with them. I look forward to getting Path 101 on its own two feet so we can all see the fruits of our labor.
In the coming weeks, I’ll be detailing the lessons I learned in working on my own startup—lessons I’ll be taking with me to my job at First Round. Launching Path 101 taught me enormous lessons about financing, product management, and process that changed the way I look at how innovation happens.
There’s so much more to write about my experience at Path 101, our upcoming features, my switch back to the other side of the table, First Round Capital, etc… Look out for quite a bit of content coming out of me over the next week or two.
Oh, and if you’re a reporter covering the local innovation scene here in NYC, you absolutely need to be at this event. We have almost 100 founders and startup CEOs showing up on October 13th to meet the local media, like Dave Morgan from Simulmedia, Dan Porter from OMGPop, Anthony Volodkin from HypeMachine and tons of the next wave of up and comers. Don’t call it a comeback—these are the companies that have been making NYC great for quite some time. It’s time for you, the reporters, journalists, and tech bloggers to meet them.
I'm super psyched to be part of the First Round Team--I actually knew most of them fairly well already. I'm psyched for New York City that another dedicated early stage fund is firming up its commitment here. Lastly, I'm psyched to be able to do more to help the innovation community in my hometown. Please do not hesitate to reach out to me with your ideas (no matter how early), thoughts, opportunities, or just to say hi. Hopefully, you can stop by our new office soon--maybe even within a couple of weeks. I promise it will be a fun, open, accessible place.