New Trends in Early Stage Investing Surface
at ëEarly Stage Venture Capital Allianceí
Twelfth Annual Conference
Woodside, CA -- Thirty leading early stage venture firms from across the country convened to share common challenges and practices, and discuss issues critical to their businesses at the Early Stage Venture Capital Alliance Conference (ESVCA). The event was held June 5 in San Francisco.
The ESVCA is a community of more than 150 seed and early stage venture capital firms. The Alliance maintains a confidential atmosphere which allows managing directors to freely exchange candid observations and information on the most sensitive and timely topics facing the industry. For the last nine years, the Alliance has been chaired by Vincent Occhipinti, a founder and Managing Director of Woodside Fund, a Silicon Valley VC firm that invests in early stage technology ventures.
This yearís conference theme: ëBuilding For Sustainabilityí generated animated discussions about the opportunities and challenges involved with building sustainable companies and venture funds. During the course of the day-long roundtable, several trends emerged from the discussion of common experiences:
Fund Structures: Early stage venture capital firms are increasingly utilizing venture partners and entrepreneurs in residence, with mixed results.
Investment Focus: There has been a marked evolution from B-to-C, to B-to-B, to Infrastructure and fiber optics.
In-house Support Services: Firms are adding Human Resources and Public Relations functions to serve the portfolio companies as well as the firm. While none of the conference participants had added in-house marketing expertise, the idea stimulated a positive reaction.
Recruitment: A significant challenge for portfolio companies and the VC firms themselves. Increasing compensation packages for top tier CEOs were discussed. Packages now include unusual perks and financial privileges.
Valuations: Valuations are down, post market correction, except for telecommunications, fiber optics and certain networking businesses, which seem less affected.
Syndication: VC are syndicating rounds less at the earlier stages due to the increasing size of funds, but is still seen as a beneficial resource to portfolio companies and to the funds.
During a wrap-up discussion about future plans of the ESVCA, conference attendees expressed interest in more frequent meetings. ìThe ESVCA is the forum for early stage venture firms to come together and freely discuss important subjects. The idea exchange is very valuable, and thatís why the ESVCA is the only venture investing conference I attend, î said ESVCA steering committee member Noel Fenton, a General Partner at Trinity Ventures of Menlo Park, CA. Dennis Dougherty, also a member of the steering committee and a founding General Partner of Intersouth Partners, located in the Research Triangle area of North Carolina added, ìThereís no ìhow-toî source for how to run a venture capital fund. The ESVCA provides members a terrific way to calibrate their companyís business growth and style.î
According to ESVCA Chairman Vincent Occhipinti of Woodside Fund, while ESVCA members are friendly competitors, they share a common goal to help entrepreneurs succeed. ìThrough the Alliance, we learn from individual members and the group as a whole. This means the Alliance can have a very positive impact on the early stage market place,î he stated.
About ESVCA
ESVCA has been a unique organization since its inception over twelve years ago. While the venture community provided a host of conferences on venture capital investing for VCs and the entrepreneurial community, none existed specifically for early stage venture capitalists. The Allianceís mission is to serve its members, and in doing so, contribute to the progress and strength of the early stage investing and entrepreneurism.
About Woodside Fund
Founded in 1983, Woodside Fund has one of the longest and strongest track records of success in early stage venture capital investing. All Woodside Funds have performed in the upper quartile of the industry for venture capital partnerships formed in their respective years. Woodside Fundís latest partnership, Woodside Fund IV, had its final close in March, and invests between $5 and $10 million in early stage ventures in Internet and electronic commerce, computer software, telecommunications, and networking. The Fund serves as an active lead or co-lead investor in most of its portfolio companies.