Bill Trenchard is joining First Round Capital– the firm’s first new partner it’s hired in over six years, says Josh Kopelman of First Round. Kopelman says the firm wasn’t ostensibly planning on hiring a new partner, but Trenchard had been on a stealthy list of people First Round wanted should they ever decide to make a move to the dark side.
The move is arguably overdue for two reasons. The first is that First Round’s partnership has been geographically lopsided with four partners on the East Coast but only two on the West Coast– nevermind that’s where the vast majority of First Round’s deals are. That’s not a great ratio of in person handholding for an early stage firm. Trenchard will give them three West Coast partners– plus the omni-present Kopelman who seems to live on a plane.
The timing is also good, because Trenchard has a history in enterprise software, which even consumer-heavy firms like First Round are starting to embrace for all the reasons we outlined here. (Hint: More returns than any other sector over the history of Silicon Valley.) You can read more about Trenchard in Kopelman’s blog post today.
I have no doubt Trenchard is practicing his Gangnam-style dance moves for First Round’s Holiday video right now.
While I had Kopelman on the phone yesterday I decided to ask him about a few of the bigger trends I keep hearing VCs talk about — either anxiously or excitedly. Some parts of the conversation will likely play into bigger stories, but in brief:
- The Series A Crunch: For the last six to nine months seed investors have been bemoaning the fact that so many seed deals won’t be able to get a Series A deal. Says Kopelman: “We’re not seeing a lot of that within our portfolio. We are seeing a lot of companies asking for a $500,000 seed ‘top off’ to get them another nine months or so before they raise a series A.”
- Have crushed valuations on the high end finally trickled down to reasonable valuations at early stages? “It’s still pretty frothy at the seed stage,” he says. “There’s still more seed capital than ever before and a supply demand imbalance.”
- Are you seeing any impact from the disappointing mega IPOs on early stage companies? “Right now, it’s pretty decoupled.”
- Why do so many people want to pay up to acquihire a team that has ultimately failed to build a compelling product? “It’s one thing to build a quality product and another to understand user acquisition. I can’t tell you the number of great product people I’ve seen come out of Google and Facebook who fail as entrepreneurs because they are used to building a great product and putting four words on the Google home page and getting a million views. I’m not sure big companies need viral growth hackers, they just need people who can build great products.”
- So First Round is jumping into enterprise software. What about the movement of smart Internet-enabled hardware? “We have just begun to dip our toe in the water. We have done two deals not announced yet. A large part of the reason we went into software was capital efficiency. Hardware is cheaper to build and tools like Kickstarter have made it possible to understand and measure demand before something is even built. We passed on Ouya. If we had seen them after Kickstarter that would have been a completely different story.”
(Disclosure: Kopelman is an individual investor in PandoDaily.)