Charlie O'Donnell, founder of Brooklyn Bridge Ventures, reflects on his early career as an analyst at Union Square Ventures during the firm's investments in Indeed and Etsy.
Insight
Crowdfunding pre-sales make early-stage hardware VC investments economically viable
“All these various pre-sale platforms are really making it economically viable for VCs to make early stage investments, because you're not funding the manufacturing, the customers are funding the manufacturing, and so, you know, you, it's a lot easier to swallo…”
Assertion Contradicted
No hardware startup on crowdfunding platforms has ever delivered on time
“Well, no one's delivered on time yet in the hardware space, as far as I know”
Assertion Supported
O'Donnell: Brooklyn Bridge Ventures rejects startups that have raised over $750,000
“So basically, I have a rule that if you've already raised 750,000 dollars in a previous round, It's actually too late for me, and so, you know, we did napkins, and prototypes, and ideas, and founders, you know, all sorts of various versions of early, and you k…”
Insight
O'Donnell: Assuming billion-dollar exits in venture fund modeling is poor analysis
“To me, it's not a good analysis and not a good plan if I expect my winners to be billion dollar outcome.”
Assertion Supported
O'Donnell: Seed funds deploy 60% of their capital in Series B or later
“I think a lot of people don't realize that most of their funds are actually much later Right. So if you have a seed fund that makes its initial 200,000 to 500,000 dollar bet and seed round, and then follows on all the way through, if you do that math, probably…”
Prediction Not checkable as stated
O'Donnell: Brooklyn Bridge Ventures allocates 80-90% of capital to initial rounds
“I will follow on, and anybody who's able to raise an outside round. If you can get somebody else, I will not lead an extra round, but if you can get somebody else to participate, you know, I will do a small amount of follow on across the board, and it's not go…”