The Ledger
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Overvalued late-stage startups face severe down-round risks in 2016
“I think there's a lot of companies now, especially at the later stages, that are going to have a lot of issues in the next year because they raised rounds at too high of a valuation. The market has corrected, and now they need to raise rounds at down rounds or…”
Harris disagrees with seed funds that refrain from follow-on investing
“I don't agree with the idea of not following on in your good companies.”
Seed funds eliminate signaling risk by only following outside-led rounds
“If you always follow when they raise a new round from a new investor, you also get around any signaling issues.”
Eniac Ventures dislikes founders who actively search for problems to fix
“Probably the type of team we like least, kind of in this area is teams that kind of stumble upon a problem, or they're just trying to find a problem to fix. The best teams are ones that kind of in their everyday life as an employee or as a consumer notice some…”
The steepest venture funding drop-off occurs between Seed and Series A
“You could argue that probably the biggest drop off happens between the seed and the a rather than the a and the b. And I think that's just because there is so much seed money and there are so many seed funds compared to a funds where, you know, you really, tha…”
Seed startups must raise enough capital for 18 to 24 months runway
“Raising enough money in the seed to that we have kind of 18 to 24 months to do what we need to do to get to the A. The biggest mistake I see is companies not raising a large enough seed where, and you look at it, it's like, well, there's really no room for you…”
Startups raising a second Seed round have lower chances of success
“Now, companies have, certainly there's a bunch of companies that have raised second seeds and have gone on to be successful, but once you get to that point, I think your chances of success are lower.”
Prominent VCs warned Eniac founders in 2010 that mobile was too niche
“A lot of the VCs that we had worked with as entrepreneurs who are Very well-respected VCs and continue to be very well-respected and nothing against them, but a lot of them told us that, you know, it was too niche, that we needed to be broader.”
Harris: New York is clearly the second-largest US tech market
“I think it's gotten to the point where it's clearly the second biggest market.”
Eniac Ventures avoids participating as a new investor in second Seed rounds
“We generally don't participate kind of as a new investor in those when we have companies that need to do that, you know, we try and be as supportive as possible.”
Mobile enterprise will produce a Salesforce-scale breakout within 5 to 10 years
“Under hyped for us, I think is mobile enterprise. I think you're going to see a lot of amazing companies come out in, in grow in the next five, 10 years both for desk and non-desk workers. You know, I think there's going to be A Salesforce Oracle type company …”
Eniac Ventures allocated half of its 2015 investments to San Francisco
“If you look at kind of our investments last year, about half were in San Francisco, about a quarter were in New York and about a quarter were We're elsewhere.”
Eniac Ventures acquired its Airbnb equity by selling an early portfolio company
“Airbnb is a situation where we sold a company to them early on.”
Eniac Ventures takes pro-rata but never leads Series A or B rounds
“Our model is to take our pro rata in the follow on rounds, but we would never lead a series A or B or something like that given our size and our focus.”
Eniac Ventures has never experienced a portfolio down round as of 2016
“I, we've been fortunate that we haven't had one yet.”