At First Round, we understand the importance of working with talented people and we apply that philosophy to both our investments and hiring. In our long search for an Associate to join our team, I spoke to a number of very talented individuals.  Since being introduced to CeCe in mid-October and spending time with her over the last couple of months it was clear that she not only met our high standards but vastly exceeded them.

CeCe comes to us from startup Qwiki where she led PR/marketing as Director of Communications and her previous experience spans politics in Washington DC and finance in Boston. She graduated from Princeton University in 2008 and has been living in San Francisco for the past year. CeCe is pentalingual, an avid traveler, and has an insatiable love for books.

Beyond CeCe’s quick intelligence and passion for the startup space, we look forward to benefiting from her creativity, PR/marketing background, strong network, and unique investment perspective stemming from an international background and diverse work experience.

On behalf of First Round Capital, I would like to welcome CeCe to the team – we could not be more excited to work with her!

Now that I have been a venture capitalist for over five years I’m able to recognize more patterns and one is around term sheet negotiation.  This last negotiation was a breeze.  The founders were tough, but they knew what was important to them.   I also know what is important to me and we were able to have a set of frank, open, and friendly conversations about it and we were able to sign inside of 48 hours.

In my experience this is likely to mean that my experience with these founders will be similar.  We’ll likely have frank and open discussions around the issues in the business but always be able to work together in a friendly way to get to a positive conclusion.  I’m excited.

I’ve had a few term sheet negotiations that have been less than satisfying.  They took forever to get closed, if ever, and we spent as much time on the nits as on the substantive issues.  One founder wanted to negotiate out of having to pay $10K in lawyer fees.  Said just because it was always done that way doesn’t mean we had to do it that way this time.  Turns out that person wanted to rewrite the book of convention on every decision he made.  I can’t tell you that’s why his company failed but it sure didn’t help.  Another person didn’t want preferred shareholders to have any preferred rights.  He never should have taken investor money and probably won’t again.  My favorite was the guy who wanted a relocation bonus….to move his boat to the bay area.  Not a boat he lived on, mind you, but one that he sailed occasionally.  That term sheet was never signed and it was probably best for both of us.

This doesn’t go one way, either.  The investor who spends hours browbeating you to avoid a tiny reduction in the option pool will also be tying up board meetings for an hour to talk about an assumption on line 18 of the revenue model submitted for discussion.   Is she too-clever-by-half, developing complex financial structures that even your lawyer can’t understand?  Expect to hear from this investor every time you are in contract with a customer as she tries to tell you how to structure that deal.  Does he wait until the day of close and then call you and tell you that he found out you have a competitor and is going to lower the valuation by 30% now that you are in a lockup?  This person is always going to be trying to find and exploit any leverage they have over common.

People are who they are and will show their colors early.  When you take investment you are entering a long term relationship where there will be ups and downs.  Be sure to read the signs in that first negotiation and make sure this is someone who you want to have that relationship with.  And so will I.

Matt hung out a ton at our offices as he was incubating the idea and then once he raised money and started building the team he commandeered the office next to mine through the first product cycle.  We have a relatively small team in San Francisco but a big office because we like companies to not have to worry about space when they first start up (we’ve also had ModCloth, Uber, and Foodzie, among others, share our space as they are starting up).  It was great to watch him, Brian, and the rest of team iterate through ideas and execute against deliverables day after day.

Now Sincerely has their own office and the team is growing the products are being released at a nice clip.  We’re thrilled to be investors in Sincerely and working with Matt again.  Expect good things from them.

I kind of hate that question.  Not because I have any particular point of view on how I became a venture capitalist.  No, I just don’t like it because like so many other people in the business I arrived here following a fairly unique path.  Inevitably the person asking is trying to find a pattern that they can use to get into the business and my story isn’t helpful for them.

As I gear up to hire a new associate for the San Francisco office of First Round Capital I know there is no standard way to find the next person to join our team.  Our current experience mix includes entrepreneurship, academia, banking, government, crime fighting, and some very poor scooter riding.  No one here burst from the womb wanting to do venture capital yet here we all are having the time of our lives while we strive to make our portfolio companies successful.

Given that, how do we find the next person?  I’m always game for trying a new model and so I am borrowing a bit from Angus Davis, the brilliant CEO of our portfolio company Swipely who builds his team in a very unique way.

If you are interested in working with us as an Associate, I’d love to hear from you.  But instead of telling you what I am looking for, let’s start with you telling me a little bit about yourself.  To structure the conversation I built this little website.  Head over there, answer a few questions, and let’s start this conversation.

I’m looking forward to hearing from you!

One of those people is Christine Herron.  I had known Christine for years and was thrilled when she decided to join First Round Capital a few years ago.  Her calm demeanor, wit, and keen eye for very interesting companies made her a great fit for us.  She worked hard for many portfolio companies and was an integral part of our deal flow and decision-making process.

It was therefore a bittersweet moment when she told me she would be starting the next phase of her career by joining Intel Capital to work on their consumer investments.  I know that this is a great step for her in what has been and will continue to be a great investing career.  She will be working with a stellar team and awesome companies and will now be a wonderful syndicate partner for us.  On the other hand, I will miss bouncing ideas around with her and having her help on the companies we worked on together.

On behalf of the First Round Capital team, I give Christine a hearty congratulations and best wishes.  And I remain thankful that I am in a profession where every day I get to work with the smartest and most creative people in the world, like Christine.

Founders face a unique set of issues when growing their companies from 2 to 20 people.  At this stage there is no better help than someone that has been there before you.  As a partnership we are always trying to find new ways to create support structures for the entrepreneurs both in our portfolio as well as the community at large.  We had this in mind when co-developing the structure of the event and it turned out quite well.  

Many thanks to Raj Kapoor and Emily Melton of Mayfield fund and the support teams in both of our organizations for putting on a great event.  Also, big thanks to the entrepreneurs mentioned above who donated mentoring time to help out fellow founders.  I look forward to the next one!

The story goes that when Mint.com sold to Intuit for $170 million, they left way too much money on table because the company clearly had the opportunity to go for the billion dollar plus win.  This leads to what is now called the Patzer Problem, namely:

When companies sell for ~$100 million, and a much bigger outcome is possible, it is very bad for investors.

I understand that. For many venture funds, that size exit certainly doesn’t get close to making the fund successful.

But let me propose a corollary to the Patzer Problem:

For a normal homo sapiens, a ~$100 million exit is a life changing event.

There are certainly some founders who want to go big.  Those that have already had a smaller win are often not interested in another smaller win.  Other folks are just predisposed to continue building their company instead of selling it and being beholden to a different set of shareholders.  There are a whole group of founders who truly believe that they want to build a huge company right up to the point that they get that ~$100 million offer and begin thinking through the math.  But many are perfectly happy with a life changing event.  And I love them all.

I see the world rather simply.  Venture capital is like any other business.  We have customers (founders) and we have shareholders (limited partners).   Our job is to increase shareholder value, i.e. create an outsized return to our limited partners.  The way that we do this is by delighting our customers.  Our products include ourselves and our experience, our connections, and the structured value we can build around the portfolio, among other things.

For the record, the Mint.com exit was profoundly successful for us.  If we are doing things right and our company founders are successful, then over the long run we should be successful.   If we get to the point where our founders are successful but we can’t be, we should be rethinking our business.

First, he had partnered with Joe Stump, the guy who helped Digg scale from it's original MySQL incarnation to the behemoth of coding prowess that it is today.  Although he wasn't the same Joe Stump who is known as The Shredlord, this Joe Stump was clearly a different sort of rock star: highly regarded, very smart, no BS and he has some amazing tattoos. 

And while the original company was a super cool location-aware gaming play, they quickly figured out that they could not build the app they wanted without a lot of work on the location awareness piece.

Which is a problem that any mobile application that wants to be location aware would also have.  Which is more and more mobile apps.  Soon to be almost all mobile apps.  Umm…Eureka!

SimpleGeo was born.

I won't rehash VentureBeat's article about the pain that developers feel when developing these apps today.  Needless to say it is hard and SimpleGeo makes it simple.  Dead simple.  Creating that simplicity is a huge opportunity for SimpleGeo and it's customers and one that we had to be a part of.

We're proud to be leading SimpleGeo's initial round of investment and to be working with these two entrepreneurs.  I can't wait for their first public launch of the product and look forward to the good things that this team will produce.

Mint.com announced today that they were acquired by Intuit for $170 million.

It has been a short 3 years since we met Aaron Patzer at a STIRR dinner in the Valley.  Seven days after we met, he had a term sheet for his seed round and off he went.  During that time we have had a ringside seat while the company grew from a rough prototype on Aaron’s computer to an amazing personal finance tool with well over 1.4 million users and critical acclaim.

There are so many things that Aaron did right it is hard to remember them all, but the things that stand out include:

• Building a culture that relentlessly focused on the customer experience and continual product improvement
• Blowing away the crowd at the first TechCrunch 40 conference and meeting his initial 3 month goal for user acquisition in 36 hours.
• Knowing when to hire a top executive team and then going out and doing so.
• Continuing to own the vision of what Mint.com should be while letting that world-class team execute on his vision
• Fundraising at exactly the right time with the right process bringing in awesome investors like Shasta, Benchmark, and DAG
• Persevering to buy the Mint.com domain name when it looked like it was out of his reach.

While I’m sure that Mint would have continued to grow and prosper as an independent company, the opportunity to accelerate Mint’s growth as part of the Intuit platform was extremely attractive.  This is a great outcome for Aaron and his team we are thrilled for them.  The champagne will be flowing as freely at First Round Capital as it will in the future former Mint headquarters.

The only downside is that after three years I will miss working with Aaron as he continues to delight his customers.  It has been a great ride and I have learned a tremendous amount playing a supporting role as Aaron built this company.  My loss, however, is Intuit’s gain and I am happy for them as they work with Aaron and his team to take Mint.com to the next level.

A hearty congratulations to Aaron and team for a job well done!

As luck would have it I am going to Cincinnati next week to spend some time with my friends at Procter & Gamble.  They were kind enough to invite me to be on their Digital Advisory Board a while back and as a result I am making my first trip out to this part of the Midwest.  Stan Joosten at P&G asked if we would be interested in doing an Office Hours in Cincinnati with their help.

Absolutely!

The whole purpose of these Office Hours’ is to give some time to entrepreneurs wherever they may be.  So if you are an entrepreneur in Cincinnati then come on out to the Rock Bottom Restaurant and Brewery on Monday, July 13.  Same setup as usual; expect to have 10 minutes or so to ask questions, solicit feedback, or just spend a little time getting to know each other.

Sign up here.

We’ll look forward to seeing you there!