Welcome to the Executive Innovation Show Podcast, brought to you by One Touch Video Chat. During this podcast hear host, Carrie Chitsey, talk with Mike W. Erwin (Founder and Chief Investment Officer of Ecliptic Capital) and Brett Andrews (MicroVentures).
Mike W. Erwin has a 30-year history of success in serial entrepreneurship and venture investing. Mike is the Founder and Chief Investment Officer of Ecliptic Capital, an Austin based “Venture 2.0” Fund, targeting emergent investment opportunities by specializing in efficient execution, rapid scale, and the outsized value creation of an increasingly interconnected world.
Brett Andrews works at MicroVentures, a venture capital and investment banking firm in Austin, TX, where he is primarily responsible for sourcing investment opportunities, managing front end due diligence, and negotiating the term sheets for those engagements. Before joining MicroVentures, he was a Partner at NewGate Capital Partners, an Angel Investment and M&A firm out of Orlando, FL where he focused on sourcing and evaluating angel investments and helped develop and grow the company’s M&A division 10-fold.
Listen to “Venture Capital: Does Seed or Early Stage Still Exist?” as we discuss:
- Carrie sets the stage of this week’s podcast, “Venture Capital: Does Seed or Early Stage Still Exist?”. It seems like more venture capital firms are looking for a magic $1M ARR number. While they still like to have conversations and chat with folks to not miss the next unicorn, has the market shifted and where do founders turn for capital. In this latest episode, Carrie dives in with some burning questions from founders banging their heads on the walls wanting to know the answers.
- Carrie comes out with the burning question right out of the gate, does early stage, seed, or Series A, still exist?
- Mike says terminology doesn’t matter, LP’s are now needing to deploy more capital to get their returns. This is driving folks to take more capital that they don’t really need it or know what to do with it. i.e. they are giving up more of their company and killing their Series B evaluation.
- Mike talks about how he’s deploying small funds to companies that need it to help them be successful in growth. Listen as he talks about most MVP where you are figuring things out and are ready to operational scale.
- Brett talks about the impact of the 2/20 model on capital deployment and says some folks might call Series B early stage these days.
- Why does Carrie love the chart (of where they deploy capital) on Ecliptic’s website and think that all venture companies should have it on their site. It calls out the 4 stages of investment, did Mike and team add it to their website from past experience of raising money as entrepreneurs?
- If we looked at any other industry with this “generic marketing message” on VC’s websites, would we tell them they are generating unqualified leads? Are VC’s missing this mark just to attract the next “hoodie unicorn”?
- Listen as Mike explains why they added it and how they support entrepreneurs throughout this investment journey.
- Where is MicroVentures investing in these 4 stages? Brett gives the 3 main areas where they are investing in.
- From the entrepreneur perspective, finding the right investment partner is much like a marriage. Carrie asks Mike for his thoughts and tips to entrepreneurs on what advice he’d give founders to dip deep and find the right partner vs. ending up in a situation where you are just “taking money”.
- Does Mike think that entrepreneurs should have more of a mindset that they are bringing venture capital companies a great opportunity vs. the opposite?
- Hear his red flag on financials, money, numbers? “If you solely focus on the money, you are going to have someone that solely focuses on money.”
- What are the key ingredients that both Brett and Mike look for in companies to invest in? Entrepreneurs listen up and take notes.
- Are relationships a higher priority than the numbers?
- There is a lot of debate about when is the right time to raise? What’s the real meaning behind the same old VC emails of “keep us updated on your growth”, “not enough traction” etc.?
- Is there a right or straightforward answer to Carrie’s question, listen and find out.
- You’ll be shocked when Mike says, “don’t focus on the money, you’ll lose sight of value creation.” Get off the model and create value. Listen to other tips to get to that term sheet.
- What is keeping these investors up at night? We know they are keeping entrepreneurs up at night, but hear what makes these guys lose some z’s.