Josh Kopelman, founder of First Round Capital, shares his view on why early-stage companies fail, attributing it to market and idea selection rather than execution.
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“I believe that a high degree of startup mortality is baked in at the pick and not on the execution.”
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More from Josh Kopelman
Disclosure
First Round lost Twitter and Dropbox seed deals over valuation limits
“First round offered Twitter their first term sheet months before Union Square led their round. We offered Dropbox their first term sheet, and I'd say we lost both of those due to sticking to price.”
Josh KopelmanJan 28, 2019▶ 7:5320VC: First Round's Josh Kopelman on Why Price Is Both An Art and A Science, Why Ownership Must Be Built on First Check and The Negative Consequences of Attribution in Venture
Disclosure
Kopelman passed on Twitter at $5M and $20M pre-money valuations
“So, we offered Twitter a term sheet at a five million pre-money valuation. We were an investor in Odeo, Eb Prior companies. So I think I was user Twitter user number 275. We were right there. We offered five. Fred came in at 20 a few months later, and to make …”
Josh KopelmanJan 28, 2019▶ 9:2520VC: First Round's Josh Kopelman on Why Price Is Both An Art and A Science, Why Ownership Must Be Built on First Check and The Negative Consequences of Attribution in Venture
Insight
Kopelman: VC ownership must be established on the initial check
“Our view is that it's pretty important to build it on first check. I think that it just gets so expensive to accumulate ownership in the later rounds that to some degree, I think your ownership is your first check and later investments are more of a cash on ca…”
Josh KopelmanJan 28, 2019▶ 12:1820VC: First Round's Josh Kopelman on Why Price Is Both An Art and A Science, Why Ownership Must Be Built on First Check and The Negative Consequences of Attribution in Venture
Insight
Kopelman: Partner selection matters more than company picking for firm longevity
“I believe that when I look back at my career in venture, I would rather be known as a better picker of partners than a picker of companies, because that's what enables a venture firm to scale, grow, and endure just beyond any one person.”
Josh KopelmanJan 28, 2019▶ 26:3020VC: First Round's Josh Kopelman on Why Price Is Both An Art and A Science, Why Ownership Must Be Built on First Check and The Negative Consequences of Attribution in Venture
Disclosure
Kopelman: First Round treats each new fund as a fresh cap table
“At first round, we really view each new fund as a new cap table so that there isn't that partner tax from the prior generations of partners”
Josh KopelmanJan 28, 2019▶ 29:1120VC: First Round's Josh Kopelman on Why Price Is Both An Art and A Science, Why Ownership Must Be Built on First Check and The Negative Consequences of Attribution in Venture
Disclosure
Kopelman: First Round does not track or report individual partner IRR
“We don't track individual partner IRR of individual track partner Performance, and nor do we share it with our LPs when they ask us during diligence.”
Josh KopelmanJan 28, 2019▶ 31:2220VC: First Round's Josh Kopelman on Why Price Is Both An Art and A Science, Why Ownership Must Be Built on First Check and The Negative Consequences of Attribution in Venture
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