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Trends in Early Stage Seed Capital

Trends in Early Stage Seed Capital. September 2011 Erik Straser, es@mdv.com. Firm Overview. 28 Years of Early Stage Venture Investing Leadership. Founded in 1983 Invested in more than 275 companies Over $2.8B aggregate LP distribution to date

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Trends in Early Stage Seed Capital

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  1. Trends in Early Stage Seed Capital September 2011 Erik Straser, es@mdv.com

  2. Firm Overview 28 Years of Early Stage Venture Investing Leadership • Founded in 1983 • Invested in more than 275 companies • Over $2.8B aggregate LP distribution to date • Currently investing from our Ninth Fund; $1.85 under active management Differentiated, Thesis-Led Strategy • Deep domain expertise • Multi-disciplinary • Active, hands-on company builders • Leaders in public policy Diversified Across Three Categories • Cleantech: Solar, Storage, Smart Grid • IT: Enterprise Focused Application & Infrastructure and Consumer Web/ Mobile/Social • Life Sciences: Personalized Medicine and Transformational IT Passionate Commitment to Innovation and Entrepreneurship • Hands-on company builders • Stubborn belief that innovation lies at core of venture returns • Culture of risk-taking, pioneering new areas

  3. Progress vs. Capital • Fundamental change in digital media and internet consumer businesses • Ability to get to 1st product and some early traction on less than $1M. • Leads to new $2M-$4M pre money rounds raising $100’s of K of funding. • Very efficient capital post “traction”

  4. New Type of VC Firm: $20-50M • Birth of new type of early stage vc firm • Focused on $100K-1M investments • Can move very fast to investment decisions • Typically work with other similar funds and angels • May or may not follow on in future rounds • Focused on lots of small investments, 100 seeds, 1-3 flowers

  5. Sounds Great, where’s the downside? • Not getting to “traction” probably means no more money • Unclear follow on policy creates confusion to downstream capital • Series B indigestion • Will it work? Experiment currently being run.

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