Insights and Opinions

 

Thursday, January 20, 2011

A VC's Response To 3 Things

from Jim Armstrong





A post in this section earlier this week, from Ryan Born, on 3 Things to Avoid When Fundraising in LA, ignited a firestorm of criticism and controversy among the technology community, both publicly and privately in emails, tweets, comments, and phone calls. Jim Armstrong, of Clearstone Venture Partners, responds.


MY COMMENTS

OK, despite the obviously purposeful edgy tone, good post. And while I generally agree and give similar advice, here are three anecdotes or truths about SoCal investing and startups that contradict.....

1. On associates. One of my investments doing GREAT (and I mean GREAT) is SupplyFrame in Pasadena. I remember the day Clearstone associate Jaideep Singh came into my office and said "Dude, you got to meet these guys and you got to invest." They were pitching in the other room and I ran right in prepped for a good meeting. We made the investment two weeks later.

2. On Angel groups. So Cal is much less efficient than Northern Cal in its organization. You can find a diamond in the rough and you don't know where great advice and good investment money comes from. My advice is talk to everyone but DO definitely be ruthless with your time and make the party evaluating your company be responsible and professional and do not allow them to waste your precious time.

3. On available funds. True but there are all sorts of pots of money around a longtime venture firm. An example is Clearstone, where we are avoiding early stage investments into our main fund, but actively investing in early stage out of two other pools of money, one a super angel type fund. We just closed on new investments Cetus and CupidsPlay in the last two weeks (to be announced soon). I would assume that other long term venture firms have similar flexibility.

Jim Armstrong is a Managing Director at Clearstone Venture Partners. Jim's work at Clearstone is focused on information technology investments, with particular interest in consumer internet, application software and internet enabled business processes. Jim has been recognized as one of the top 50 Venture Capitalists in the United States by Forbes Magazine. Jim blogs at socalvc.blogspot.com.


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