First Round Capital: A Venture Capital Firm Focused on Entrepreneurs

First Round Capital is a venture capital firm that has revolutionized the way venture capital firms operate. They are known for their unique approach to supporting entrepreneurs, focusing on early-stage companies and offering a variety of resources beyond just funding. Their goal is to help entrepreneurs build successful startups.

Howard Morgan: A Veteran in the Venture Capital World

Howard Morgan, a co-founder of First Round Capital, brings a wealth of experience to the table. He holds a PhD in Operations Research/Computer Science and has a long history in academia and venture capital. He has worked with Jim Simons at Renaissance Technologies, a quantitative hedge fund, and has been involved in several successful startups. Howard’s deep understanding of the industry and his passion for supporting entrepreneurs make him a valuable asset to First Round Capital.

First Round Capital's Origin Story: Investing in Potential

The story of First Round Capital begins with the partnership of Howard Morgan and Josh Kopelman. Both had a history of successful investments in early-stage companies. In 2005, they launched a $10 million fund to support entrepreneurs. Their approach was different from traditional venture capital firms. They focused on smaller seed rounds, believing that capital could be deployed more effectively in early stages. They also took a more hands-on approach, providing guidance and support to their portfolio companies.

The Evolution of First Round Capital: Scaling Their Impact

Over time, First Round Capital expanded their reach and resources. They raised a larger fund in 2008, opening an office in San Francisco. They also implemented innovative programs to assist their portfolio companies, such as the Exchange Fund, which allows founders to diversify their stock holdings.

First Round Capital's Investment Strategy: Investing in Potential

First Round Capital invests heavily in their own infrastructure to provide value to their portfolio companies. They make 20–25 investments annually with an average of $500k each. Their goal is to identify entrepreneurs with a strong vision and provide them with the resources they need to succeed.

• They emphasize the importance of making many small bets to increase the chance of a successful investment.
• They actively participate in follow-on rounds to ensure they have a continued stake in the growth of their portfolio companies.

First Round Capital's Support System for Entrepreneurs: Beyond Funding

First Round Capital goes beyond providing funding; they offer a robust support system for entrepreneurs, including:

• CEO Network: A platform for connecting CEOs from portfolio companies, fostering a collaborative environment and enabling mutual support.
• The Exchange Fund: A program allowing founders to diversify their equity by exchanging shares in their company for a portfolio of other First Round Capital companies.
• CEO Summit: An annual event where CEOs from First Round Capital portfolio companies engage with industry leaders and experts, offering valuable mentorship and networking opportunities.
• SecondRound.com: A proprietary CRM platform designed to streamline the fundraising process for portfolio companies, connecting them with potential investors and facilitating communication.

First Round Capital's Approach to Board Meetings: Value Creation

First Round Capital recognizes the significance of effective board meetings. They suggest a board structure comprising three individuals: the CEO, an investor from First Round Capital, and an independent member. As the company grows, additional board members can be added.

First Round Capital recommends a specific agenda for board meetings, focusing on:

• Highlights/Lowlights: A summary of key events since the last meeting.
• Financials versus Budget: Using visual aids like waterfall charts to highlight how management is adjusting budgets.
• Management's Ask for Board Support: Clearly communicating how the board can contribute to the company's strategy, market expansion, key hires, and networking.
• Executive Session: A meeting without management to discuss performance and how to provide further support.

First Round Capital's Role in the Startup Ecosystem: Beyond Just Investing

First Round Capital has become a vital part of the startup ecosystem. They are not just investors; they are active participants in supporting entrepreneurs and fostering innovation. Their unique approach to venture capital, with a focus on seed funding, mentoring, and resources, has earned them a reputation for building a strong community for entrepreneurs.

First Round Capital: A Valuable Resource for Entrepreneurs

First Round Capital's commitment to supporting entrepreneurs has earned them a place as a trusted partner in the venture capital landscape. Their hands-on approach, innovative programs, and commitment to building a supportive community make them a valuable resource for entrepreneurs seeking seed funding and guidance.