The VC as Ichabod Crane
Pundits have been recently rumbling the merits of the “headless” VC deal, with leading institutions humbly taking their place along side leading angels in providing seed financing to budding management teams. Down south, former Digg founder Kevin Rose has folks chattering about his recent $1.5 million financing of his design lab, Milk, from a large mix of angel notables and VC partners. In Canada, we’ve seen similar star-studded angel and VC mixes over the last few years, not just from micro-cap experts such as Extreme Venture Partners and Mantella Ventures (whose recent Pushlife sale included mogul Gary Slaight, among others) and we’ve even seen some seed dabbling from such institutions as the Blackberry Fund among others. So is there anything more to this than the usual ‘cool kids getting together’? Maybe not, and certain commentators praise a mix of investors that offer effective reputational and other disciplines on expected biz dev contributions (hey, even cool kids like to show off once in awhile, at least to each other). Some have been less benign, sceptical of syndicates without a single stakeholder with enough skin in the game to both marshal the venture through tougher times and tug on the wallets when required. Time will tell, but for now it is certain that VCs will continue to reach deeper into the funding cycle to fan out their inventories of potential A and B round firms, at least while our mini-bubble continues its present float. For their part, founders seem not so enamoured with angels (super or not) to pass up the chance to include VCs in their rounds in order to derisk non-institutional strategies that have failed in past funding cycles. What should you do? Like any “in” crowd, be duly cautious of who gets the invite to the kegger, remember that every cool kid’s nightmare is that no one shows up at all and, of course, please let us know if we can help you get a seat at that special table in the cafeteria.