Does a small amount of capital lead to small companies?

For the past few years and it’s especially true this year, that there has been tremendous growth in the number of seed stage investments and the number of angels (people investing their own money) and VCs (people investing their own money *and* other people’s money)

We have been making seed investments since the earliest days at Spark. We take these seed investments very seriously. We do not invest in competitive companeis and we go through the same decision making whether it’s a $250k investment or a $2MM investment. We just do our best to stage the capital appropriately to find the right balance (company needs, founder dilution, our ownership).

An easy way to describe the decision process is we ask if we believe the founders, their vision and ability to execute have the opportunity to create something ultimately quite big

Even if it starts out quite small (as they mostly do). Sometimes it works and sometimes it doesn’t.

If we believe the company is best served by a quick flip or small exit then we encourage the founders to raise money from investors that are comfortable with that strategy or help them feel out if bootstrapping is a better model.

Truth be told i am seeing a rise with some founders that are interested in a quick flip. That’s not what I wanted to do when I worked in startups and not something i’m thinking about as a VC. It’s not a personal judgement – it’s just not something I want to do.

Yesterday i read Max Levchin’s excellent post about some of his experience and observations about the a rise in quick flip founders. I encourage you to go read it. Heres the link

http://maxlevchin.wordpress.com/2010/09/27/on-ambition/

I do not believe that raising a small amount of capital initially means that you can’t build a huge company. I disagree with people that tell me that there is no way you can build a big company from a mere $250k. You can actually do it with less.

In my mind the opportunity has little to do with the size of the first round of capital.

(please excuse typos and lack of links. Wrote this on my iPhone)

Homework

Each year of parenthood brings about new things to learn and figure out. 

Right now it’s all about middle school. 

Our oldest is 11 and she just started 6th grade. Her backpack is filled with more books than I could possibly imagine.

And the homework load is much bigger than I anticipated. Right now she’s getting about 2 hours of homework every day. Last night I asked on Twitter if this is normal. Most folks said that was fairly normal and that by 9th grade it goes up to 4 hours per day (!). 

Outside of school, our daughter has a passion for ballet. She’s been doing it since she was 4 years old and she absolutely loves it and she is extremely good at it as well. I’m thrilled that she has found something that gives her so much joy and self confidence as well as something that challenges her.

At her level of ballet, she is required to attend ballet school 4days per week with a 2 hour lesson each time. 

So the schedule basically is like this: she gets up at 6am, goes to school, gets picked up at school, goes to ballet for 2 hours, comes home, has dinner (quickly), homework for 2 hours and then bed so she can get 9-9.5 hours of sleep a night. 

That didn’t feel right to me but I bit my tongue for the time being. 

This morning before she went to school, she said to me, “dad, I’m gonna skip ballet today, I just have too much homework to do this week”. 

I could see that she had her mind made up which made me feel good that she was prioritizing school and she has the ability to know her limits. But I could also see that she was a bummed out.

Maybe I’m a rookie dad at having a first time middle school kid. But this doesn’t feel right to me. Any tips or suggestions from more experienced parents would be great. I’m all ears. 

Do More Faster

Last year my friend Brad Feld told me he was writing a book based on the lessons learned from working with entrepreneurs and mentors in TechStars. I’ve been an investor and mentor since TechStars started here in Boston a few years ago. He asked me to contribute a section and I happily agreed.

The book is called Do More Faster and will be available in early October (you can pre-order as well). I’m very excited for Brad and David Cohen. These guys are tireless investors, mentors and great guys. 

Whether it’s tied to an entrepreneurial vision or simply made part of your every day life, giving pays back in ways you might not anticipate. Whether you’re helping a teacher and classroom in need, donating clothes or canned foods to a local shelter, volunteering for disaster relief, or giving up your birthday to help others get clean water, you’re doing something that makes a difference in the world. Don’t think you have to wait to do these things—get started right away because here’s the secret: there is compound interest in altruism.