WimpyPost Seed: the most active stage in venture financing

by Bambi Francisco Roizen for VatorNews

Since 2011, Bullpen and Vator have put together an annual venture capital event to gather the old guard investors and new to understand the changing and evolving venture landscape.

The very first conference four years ago, called Venture Shift, covered topics such as “How angels and super angels/micro-cap VCs are changing the landscape” to “Has the traditional VC industry been forced to pivot?” By 2012, we explored questions such as “The Series A crunch” and “What’s the new venture hit?” And in 2013, we examined the newly-enacted JOBS Act, and started questioning the value of accelerators, noting that there was an accelerator bubble.

Last year, we made our own “venture shift” by renaming the event “Post Seed,” which Paul Martino, co-founder and Managing Partner at Bullpen, rightly coined.

Editor’s Note: We are hosting our second annual Post Seed (#postseedconf) event on Dec. 1 at Ruby Skye in San Francisco. The event – which we expect to draw more than 500 attendees – kicks off at 8 am and ends around 5 pm. We’re excited to have Cory Johnson, anchor at Bloomberg West, broadcasting live from 7 am to 11 am PST. It should be a riveting day! Register here: Post Seed 2015.

The re-naming aligned with our view that the industry was no longer shifting, but in fact, had settled and a new paradigm had emerged. Just like an early morning dew that disappears to reveal a crevasse or smoke that clears from a fire, exposing a large gaping hole in an edifice, a wider gap between the initial seed round and Series A rounds, and within it a flurry of new investment strategies and activity, became apparent in the venture landscape.

This gap was formed by a new generation of investors, who by virtue of emerging en-masse, threw traditional early-stage strategies and valuations on their head. This gap was formed by VCs encouraging startups to raise larger Seed rounds to meet the ever-demanding proof points needed to get a Series A.

“Consider raising a larger seed round to give yourself more runway to rack up more proof points before your A,”wrote Josh Kopelman, partner at First Round.

As it happened, this once discrete Seed round became either a very big round, as Kopelman advised, or a series of them. Seed was now a process, as Duncan Davidson, partner at Bullpen Capital, observed.

A process that lives in this stage called Post Seed.

We agreed the event would be called Post Seed, and Venture51 became our new partner. Semil Shah, who advises Bullpen, has become very instrumental in helping to shape the conference. He suggested we all write about “why” we’re hosting the conference.

Venture no longer a cottage industry

The “why” for me is easy: Venture is no longer a cottage industry, and it’s changing how we need to think about the seed-to early-stage rounds.  As I mentioned in this piece “Why private markets are where public markets were circa 1980“, the private markets (or venture capital industry) have a lot of similarities to the public markets circa 1980’s when the public stock market opened up significantly to the average investor.

In 1980, about 17% of US households owned public stocks, up from 4% in 1949. Today, half of US households …

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