Today, we are excited to announce the closing of our fourth fund, Foundry Group Select. While it is exactly the same size ($225 million) as our previous funds, it has a different focus.

The Foundry Group Select Fund will invest solely in our Foundry Group and previous funds’ portfolio companies that have achieved significant success.

With Foundry Group Select, we’ll be able to invest up to $25 million in these companies’ late stage growth rounds. Up until this point, we’ve been limited in the amount we can invest in these rounds due to our early-stage strategy, while we also use the best financial services, which anyone can find in this online review of survey junkie and help people and business as well.

We’d like to thank our limited partners for their continued support and the great entrepreneurs we support for the opportunities to work with them.

(Boulder):  Today, Foundry Group, a venture capital firm that invests in U.S.-based seed and early stage technology companies announced, via video, a major change to their investing program.  Previously, the firm has focused on cutting edge technologies within their well-known investment themes.  Effective immediately, however, the firm will focus on more proven technologies that present less technology risk.

“We really believe that the golden age of technology occurred 30 to 40 years ago and we intend on identifying and investing in the best entrepreneurs in these older, key technologies,” said Seth Levine, Managing Director.

When asked to detail which types of companies this might include, Managing Director Ryan McIntyre offered “While the smartphone ecosystem has enjoyed tremendous growth, we believe with dropped calls and other software issues, people will eventually move 100% back to landlines.  For that reason, we will begin to invest in corded phone technologies.”

Managing Director Jason Mendelson explained why the firm chose the medium of video to announce the news.  “We expect that many folks will not fully understand this decision and potentially think we are making a mistake.  The video was produced to visually show people the ineptness of current technology and clearly show how much better off we were yesteryear.”

When asked for further comment, Managing Director Brad Feld was unreachable after replacing his office iMac with an Apple II computer connected to a Hayes 2400 Baud Modem.  Apparently, he has yet to figure out how to connect to the Internet and will revert from using email to dictating messages to his assistant.

To see the live announcement, please see the following:

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So, seriously?  Why did you guys release another music video?

A little over two years ago we released I’m a VC, a video that poked fun at the venture capital deal process while promoting Venture Deals, a book that Jason and Brad had released.  With over 90,000 views, we were pleasantly surprised by the response.  We also had a ton of fun making it.

Last December, while at our quarterly partner offsite, we discussed plans for 2013.  Seth mentioned that “we should make another music video.”  Jason quickly countered “you mean I should make another video since you guys can’t write one yourselves?” To this, Seth agreed and further requested that Jason make the next song a rap since neither he, nor Brad could sing well.  Giving Jason no other direction than that, it seemed unlikely that anything would come of it.

One day, Jason sat down to think about what the subject matter would be.  Having made fun of venture capitalists, who else was a fun target?  After discarding the idea of drummers and lawyers (both of which Jason has been in prior lives), he settled on technology, as he remembered a great rant by Louis CK on the subject.  Then a few days later, he heard the classic rock song Best of Times by Styx and immediately conceived the idea of the Worst of Times video.

While sitting poolside at the Holiday Inn Express in Escondido, California (a very underrated breakfast bar, by the way), Jason and Ryan wrote the lyrics.  Shortly thereafter, the vision of the video began to form and culminated with us filming the video in late August.  Today, we are proud to show you what we came up with.

Bottom line:  The four of us love each other. We enjoy working together as well as having fun together. We have thoroughly enjoyed our experience to date at Foundry Group and love the creativity that emerges when we are together.  We don’t take ourselves seriously and don’t play golf.  So why not another music video?  We hope you enjoy it.  And even if you don’t, we are pretty sure you are curious what we each look like in drag.

 

We are pleased to announce that we’ve led the $10m Series A funding of MapBox. Based in Washington, DC and San Francisco, CA, MapBox provides a highly customizable mapping platform based on open data sources for web and mobile application developers. We became aware of MapBox this past summer via two vectors: Zack Rosen, CEO of our portfolio company Pantheon, introduced us to Eric Gundersen, CEO of MapBox, and our portfolio company Gnip worked with MapBox and data artist Eric Fischer (now part of the MapBox team!) to do some amazing visualizations using geotagged tweets. When a company and entrepreneur is recommended to us via multiple trusted sources, we pay attention. While the digital mapping and satellite imagery industry has long been dominated by large companies, governments, and a proprietary data mindset, the open-source and open-data movements have made inroads into the mapping world. Most notable is the OpenStreetMap project, started in 2004, which now has over one million contributors worldwide building an ever-growing and extremely rich dataset. MapBox embraces open-data and open-source and provides a rich set of tools that enable publishers and web and mobile developers to quickly and easily add fast, beautiful, and highly customizable maps to their sites and apps. As a quick example: here’s a map of Foundry Group global headquarters using our logo, font, and color palette:

As evidenced by the companies in our Protocol and Glue themes, we are big fans of API-driven products consumed by developers that provide fundamental “every app needs this” functionality, and MapBox fits very much into this worldview. What’s more, MapBox has been bootstrapped to date: Eric and team have built their platform with no outside funding, and they have landed an enviable list of customers including Foursquare, NPR, Evernote, USA Today, The Financial Times, Github, Hipmunk, Greenpeace, and more. We’re excited to welcome the MapBox crew to the Foundry Group family, and to work with them to help build the future of geo software.

Update: check out MapBox’s blog post and WSJ’s coverage of the financing.

 

We’ve been floored by the amount of interest the community has shown in our AngelList syndicate, FG Angel. Alongside that interest has come a lot of questions which have been helpful to us as we work through the details of creating our AngelList Syndicate and making our first FG Angel investment.

To provide clarity where we can, we’ve put together this FAQ that responds to many of the questions we’ve received. As you read through this FAQ, keep in mind that it is specific to our FG Angel initiative. If you have questions about syndicates in general, AngelList has put together their own FAQ.

If you want to jump into the fray and you can join the FG Angel syndicate here. We are capping it at $500,000 ($50,000 from us and $450,000 from the syndicate.)

The answers below are not static, and we expect there will be new questions. As AngelList evolves, so will we.

Investment Parameters

Do you intended to use Foundry Group themes as a guide or will you be more promiscuous? We see FG Angel as a great way to explore new areas that we’re interested in, but haven’t dug into yet due to Foundry Group’s thematic investing. We’ll also be investing in companies that fall within Foundry Group’s themes. In short, promiscuous.

Will you lead deals? Look for ones that already have terms set? Both? Both. Our focus is on companies and founders that we see potential in; we’re comfortable either leading or following.

Is there a ceiling on valuation or dollar amount raising? No.

Are there AngelList specific dynamics which make an investment more/less attractive? We have no clue! That’s one of the reasons why we started FG Angel: to learn how this new channel of investing changes investing itself.

Will FG Angel investments be first round only? Given the amount of capital that we are putting into the companies (capped at $500k), it makes sense that we’re the first money in, or close to the first money in.

Investment Process

How will the FG Angel investment process differ from traditional Foundry Group process? One big difference: not all the decisions need to be made over sushi because that would be a lot of raw fish. Our FG Angel investment process is a lightweight version of our typical process. All four partners have to be really interested in the company. We’ll run an internal diligence process before we make a decision to invest.

Will you meet with companies in person? Video? Either in person or via video conference. Or both.

Do you need unanimous partner support in to invest in a company? Yes.

Will you send companies to AngelList to invest in them there? If we are interested in the company and they are at a stage that makes sense for FG Angel to invest, yes.

Will Foundry Group invest alongside FG Angel? Perhaps. Foundry Group is by no means a follow on fund to FG Angel. However, if there is a company that FG Angel has invested in that fits within Foundry Group’s themes we’ll definitely consider it.

Deal Parameters

Will deal structure / term sheets differ from traditional Foundry Group investments? If so, how? We will be using AngelList’s standard documents.

While you won’t take a board seat, will you be a part of selecting a board representative? No.

Will you negotiate terms? Unlikely. We won’t accept terms that are outrageous, and if it comes to that point, we won’t be investing in the company.

Are there any follow on dynamics in the AngelList syndicate structure? Another question that we’re very interested in ourselves. We’re hoping to learn the answer through our early participation of the syndicate experience.

Portfolio Integration

Will an FG Angel investment be treated differently than other portfolio companies? Yes. Many of the companies will be at a different stage than the other companies we invest in so we’ll start out with a few different things.

• They will have their own communication channels (but will still be introduced to Foundry Group portfolio).
• They will have their own page on the website.
• They will not have a specific partner paired with them, but rather have access to all the partners on an as needed basis.

Syndicate Relations

What level of communication do you anticipate having with syndicate members? One of the greatest values we see from the syndicate structure is the amount of supporters a company gains through one (relatively small) financing. We want to maximize the value of this network the best that we can. The specific channels of communication are still being figured out but expect high levels of transparency between the syndicate members, the CEOs of the companies, and all four partners at Foundry Group.

Miscellaneous

Is there a situation where FG Angel is competitive with Foundry Group? Nope. Due to how we structured FG Angel, there is no legal or deal flow competitiveness between FG Angel and Foundry Group. It’s all part of the same investment portfolio.

Will you help companies raise the next round? If specific questions about fundraising arise, we’re available to help. However, we will not be directly involved in helping FG Angel companies raise additional capital.

Will you allocate reserves per company or to FG Angel investments collectively? FG Angel will not be holding any capital in reserve for follow on investments.

Yesterday, at our weekly Monday (sushi, sometimes tacos) lunch, we talked about AngelList. Over the weekend we each read blogs about how AngelList was going to transform venture capital, including The Great Venture Capital Rotation, AngelList Syndicates Will Also Pit Angel Against Angel, Leading vs. Following, Is @AngelList Syndicates Really Such a Big Deal?, and Some Thoughts On The Big AngelList Deal. Notwithstanding the theorizing, prognostications, and brilliant prose, we think that the verdict is still out on the longer term effects of AngelList to the venture capital industry.

After joking that every VC in the US was at this moment discussing AngelList and how it might, or might not, impact them, we decided to do something. Rather than talk, we decided to participate. After discussing a few different ways to engage, we decided to form FG Angels, through which we’ll be an active funder on AngelList.

We are committing $2.5 million to this effort with a goal of making 50 investments between now and the end of 2014 in companies that list on AngelList. We will invest $50,000 of our own money in each company and the balance from our syndicate. Over the years, we’ve had many entrepreneurs ask if they can invest alongside us. We’ve never had a side fund – this is our first experiment with it. For now, we are capping our syndicate at $500,000 although we’ll revisit this from time to time.

These are seed investments from Foundry Group. We don’t have a separate seed program, although we have always been active seed investors through our fund and indirectly through a variety of vehicles. One example is Techstars, where we are investors in the various Techstars city funds as well as Star Power Partners. Another example are the 30+ seed VC funds that, between the four of us, we are personally investors in.

We will make these seed investments using the same strategy that we’ve made in the past as angel investors.  The money will be coming from Foundry Group and all of the economics associated with the investment, including any carry on our FG Angels syndicate, will go to our fund. For these seed investments we will focus on people over ideas (the idea is the price of admission), will decide quickly, and will run in a pack with other angels as we don’t have to be the lead investor. We will be acting like angel investors in these investments – it’ll be unlikely that we’ll follow on in later rounds, unless the company specifically fits in one of our Foundry Group themes, and we won’t be taking board seats in these companies.

Our reach at the seed investing level is now well over 1,000 companies, across Foundry Group, our personal investments, Techstars, Star Power Partners, and the various seed VC funds we invest in personally and as a partnership. We’ve decided to spend the next year working hard at amplifying this network dramatically. Our FG Angels strategy is part of this.  We’ll reveal more as we progress.

We recognize that the landscape for early stage investing is constantly evolving. While we aren’t worried about being negatively impacted by crowd funding, we figure that the best way to really understand it is to participate.