We are excited to announce that Chris Moody is joining Foundry Group as a partner.

When we started Foundry Group in 2006, we were very clear that we were not going to build a legacy venture capital firm; one meant to outlive its founders. There would be no generational planning, no transitions to younger partners, and no senior partner hold-outs who would hang onto economics well after they had stopped working. Simply put, when we are done investing, we will drop the mic and shut off the lights.

In 2014, Seth, Jason, Ryan, and Brad had the first of many conversations about our long-term plans for Foundry Group. These discussions resulted in the creation of Foundry Group Next, the addition of Lindel Eakman to our team, and our first Foundry Group Next fund which we closed in 2016.

The conversation that we started in 2014 has continued on a regular basis, both formally at our quarterly off-sites but also pretty much every time the four of us were together. As part of this, we started an exercise of explicitly looking forward a decade and talking about what Foundry Group looked like from each of our perspectives at that time. With each new fund we raise, we are making at least a ten year forward commitment to each other, our investors, and the founders whose companies in which we invest. For the first seven years, this was easy, since we each had a 20-year view of Foundry Group when we started it in 2006. But as time passed, we realized we needed to start to think more deeply about the future of Foundry Group and how we evolve our investment activities.

The venture business is an inherently challenging one to scale. Leverage – of time, capacity, and capabilities – is hard to achieve. As Foundry Group raised more funds, we realized that our ability to continue to manage our business effectively was becoming limited by our individual time and capacity. Recognizing this, we started to make a list of people we would consider adding as partners, as one of our deeply held beliefs was never to have associates, venture partners, or EIRs as part of our firm.

For a while, the only name on the list was Lindel’s. It took us several years to get our mind around adding someone, but once we did, we added a few more names to the list. It probably won’t be a surprise to anyone reading this that it is a very short list.

Back to Chris Moody. Chris was most recently VP & GM of Data & Solutions at Twitter, running a multi-hundred million dollar enterprise business unit. In addition to running one of Twitter’s fastest-growing business unit, Chris was responsible for leading Twitter’s developer platform and ecosystem involving hundreds of enterprise partners and one of the world’s largest active developer communities. We’ve known Chris since 2007 and worked extremely closely with him when he was the CEO of Gnip and well as a leader in the Boulder Startup Community. Over the years, we also became very close friends with Chris.

After we had raised the first Foundry Group Next fund last September, we started having a serious conversation about having Chris join us at Foundry Group. This was driven by our reflection on our current workload, how we were adjusting what we were doing based on the addition of Lindel to the team – which had re-energized us a lot, and how we were thinking about the next ten years of Foundry Group.

In addition to working closely with Chris as a CEO (Brad was on the board of Gnip), we all worked with Chris through Techstars (he was one of the original mentors in the 2007 program). After Twitter acquired Gnip in 2014, Chris joined the boards of two of our portfolio companies (Pantheon and mLab) and worked closely with Ryan on these boards as an outside director.

We knew Chris was an extraordinary board member as well as an extremely seasoned CEO. We had a great affinity for each other, and he shared our value system. When the five of us sat around talking about Chris, after each conversation we got more excited about having him join us, especially as we learned about his personal view for the next decade of his life.

For those of you who don’t know Chris, we encourage you to watch this short video of Chris’ commencement address at Auburn University last spring. We think you’ll get a small glimpse of what he is about and why we’re so excited to have him as our partner.

Chris has been burning the candle at both ends for 27 years without ever taking a meaningful break. We insisted that he take the summer off to recharge his batteries and spend focused time with his awesome wife Sarah and his three delightful kids. He’ll officially join us at the end of the summer.

Welcome, Chris!

We recently shared our thinking on fund investing with our post, “What does a Foundry Group Next fund investment look like?” We noted that we are largely driven by people and ecosystem. We want to continue laying out our thinking by talking about each of our fund investments. We’ll start with our most recent fund investment, Founder Collective, and walk backwards to catch up on what was a very active first year of investing for Foundry Group Next.

Our recent investment in Founder Collective III, L.P. is a good example of our ecosystem thesis at work. We previously worked with the Founder Collective (“FC”) partners, David Frankel, Eric Paley, and Micah Rosenbloom through shared company and fund investments. We co-invested with them in MakerBot, Pantheon, and Formlabs, with many other shared opportunities along the way. It was easy for us to get excited about FC’s prior portfolio and fund performance. They have a number of high-profile company investments and, importantly, they are one of the few seed funds to have shipped home large boxes of cash in addition to strong valuation mark-ups in their portfolio. We also got excited about their fund discipline and investor alignment, choosing to stay the same size and take more of the fund themselves. I have to think that most LPs are ready to invest at that point!

It’s FC’s partnership dynamics, however, that get us really excited. They have strong internal dynamics that limit the noise and encourage debate to reach thoughtful decisions. Their history together as founders and investors makes it clear that they deeply care about each other. It is those deep bonds and relationships that allow for the space needed to make good decisions across the portfolio. Brad’s post, Kindred Spirits – Our Investment In Founder Collective, does a nice job of laying out our shared values and goes into detail as to why we felt such a strong motivation to partner with them. These are clearly our kind of people.

The FC strategy also shows that they deeply align themselves with, and identify internally, as founders. The personal feedback we got from their portfolio founders was strong and their local ecosystem players noted support for their involvement as preferred investors.

We also knew FC had a great investor base and we would be lucky to get a chance to join that group in this new fund. It was only because of shared relationships (and some embarrassing cajoling) that we were able to become the only new LP in their new fund. We are excited to formally partner with the FC team and look forward to finding more great entrepreneurs to back alongside them.

We are pleased to announce that Foundry Venture Capital 2016, L.P. has completed its initial investment in Looking Glass as part of a $10 million financing. Based in Brooklyn, NY, Looking Glass has created the world’s first personal 3D volumetric display.

While the idea of a 3D volumetric display was envisioned over 100 years ago and Louis Lumière invented stereoscopic (3D) films in 1935, the physical instantiation of such a product has been elusive. Extensive research at MIT in the early 1990s, which included John Underkoffler (now CEO of Oblong) made progress but stalled in the mid-1990s.

In 2013, Shawn Frayne and Alex Hornstein became obsessed with the idea of a 3D volumetric display and started Looking Glass. In 2015, they came out with a product called L3D Cubes which was an early precursor to their current product, Volume.

We were introduced to Shawn by Jeff Clavier at SoftTech VC. Jeff insisted that Brad sit down with Shawn and, after a 30-minute meeting at Jeff’s office in San Francisco, Brad called John Underkoffler and said, “John, I finally saw what you were trying to create with your holographic camera.”

Looking Glass adds another dimension to a long list of 3D related product companies we’ve invested in over the years, including MakerBot, Glowforge, Formlabs, and Occipital. We are excited to welcome Shawn, Alex, and their team to the gang. And, thanks, Jeff!

We are pleased to announce that Foundry Venture Capital 2016, L.P. has completed its initial investment in Chowbotics. Based in Silicon Valley, Chowbotics has developed robots that make food in restaurants and cafeterias.

At Foundry, we are always on the look-out for interesting Human Computer Interaction (HCI) companies. This investment theme has led to our investments in companies such as Glowforge, Formlabs, Makerbot, Fitbit, Occipital and Sphero. These companies have each grown quickly and defined their markets.  We believe that Chowbotics will do the same in the emerging robotic food preparation category.

Restaurant owners throughout the United States are struggling to find labor. In a big city like San Francisco, for example, the median rent for a 1 bedroom apartment is $3500 – out of reach for most restaurant workers. Additionally, robots also provide enhanced food safety, consistency in food quality and 24/7 availability.

Furthermore, office cafeterias and event spaces lack the ability to provide labor intensive food items in many cases.  Chowbotics first product, Sally, is a robotic salad maker that can be a part of any restaurant, cafeteria, event space, stadium, etc. where a freshly-made salad would normally be hard or impossible to provide.  

We met Chowbotics as a part of the Austin, Texas Techstars program and have followed their success for the last year. Their robots are low in complexity and take up minimal space as well. The amount of progress they’ve made with a small team and budget has been impressive. The company was founded by Deepak Sekar and we are stoked to work with him and his team.

We recently shared an outline of what we’re looking for in a Foundry Group Next (“FG Next”) direct investment. Our FG Next strategy not only allows us to continue making direct investments in high-potential startups that fit within our themes, but also to scale up our ability to support venture firms and funds whose vision and values align with ours. Through this activity, we hope to spread the Foundry Group values and DNA further into the overall venture and startup ecosystem.

Broadly, we’re looking for sub-$100 million funds that invest in early stage technology companies and are based in North America. We seek to identify and support the next generation of great venture fund managers. We think our partnership should mean more than just committing capital. We seek to serve as the “insider LP”, counseling new managers on the growth of their own platform and helping them work through and avoid some of the common mistakes, especially those that we have made ourselves over the years. We want to partner closely, providing capital from our funds and connecting our LPs directly to venture managers.  We’ll have a separate post on how we source, evaluate, and partner with GPs.  However, our engagement model feels like important context for understanding our portfolio construction and the types of funds that fit with our strategy.

We’re targeting a pace of 5 to 10 fund commitments per year. Our fund investments fall into two categories: “Primary” positions and “Emerging” positions. Our primary positions range from $5 million to $10 million and our emerging positions range from $1 million to $2 million. Overall, we’re targeting 10 to 15 primary positions and 15 to 20 emerging positions. Whether a fund investment will be a primary or emerging position depends on several factors, including fund size, level of experience, and the strength of our existing relationship.

FG Next is largely driven by ecosystem— we want to leverage our existing ecosystem to identify great investments and also bring in new managers to grow it. While many of our fund investments will come from inside our ecosystem, we will save a few positions each year for those unexpected good opportunities that come to us, often spinouts or new managers.  Our goal is to bring our friends closer while also supporting the next generation of outstanding VCs.

To date, we’ve made 10 fund investments, which are listed here. These investments fall into two general categories: existing colleagues and emerging managers. We’ve made several investments in managers with whom we have strong, existing relationships. These are firms that have proven or are beginning to prove themselves; we already know them well, have looked at and/or invested in deals together, and want to be closer to them. Our emerging managers are less proven and are often raising their first or second institutional fund. These are generally sub-$50 million funds, have little data or track record, and less developed team, strategy, and portfolio ideas. We’re willing to invest and partner for the right manager/strategy and would even be happy to be $1 million of a $5 million fund.

Our $1 million to $10 million allocation size allows us to invest in smaller, early stage funds, which is where we believe we can achieve outsized returns. We’re targeting mostly Seed and a few Series A funds. We believe that the venture risk profile has meaningfully changed due to lower costs and faster proof points. We view the organized seed market as akin to the risk profile of Series A from 10 to 15 years ago. Moving up the stack, Series A funds now have more data and more opportunities with the reduced friction to found a company. Our funds may invest in multiple rounds throughout the lifecycle of a company, but we’re targeting those that make their initial investment in the earliest stages.

With respect to geography, we expect most of our investments to be in funds in the Bay Area, New York, and Boston, but we’re also looking for funds that target companies outside these major markets. We’re interested in secondary markets, but are cautious of secondary market funds that don’t have an ability to source outside a single market. We expect that several of our funds will make a small number of international investments, but our focus is North America.

At Foundry Group, we invest in technology companies and take a thematic approach to investing. The broad, horizontal nature of our themes has led to a diverse portfolio of software, hardware, enterprise, and consumer companies. We’re looking for funds that invest in technologies across these categories and overlap with some or all of our themes. Because of our unique position as a VC that also invests in other VCs, we believe we can add value beyond a capital commitment. To that end, we want to partner with funds where our expertise will be advantageous and where we might even be able to help finance later stage deals with a direct investment.

More than anything, we’re looking to invest with smart, great people. We will try to support the #OpenLP movement and keep updating our thoughts. Stay tuned for a separate post about how we evaluate fund managers.