First Round Capital
The Conshohocken seed-capital firm, founded in 2004 by Josh Kopelman, 39, and Howard Morgan, 64 (in part with Kopelman’s proceeds from selling Half.com to eBay for north of $300 million), last year spread its funding over 25 deals, handing $500,000 or so each to young companies that haven’t raised that kind of cash before. It’s an approach that makes sense in today’s economy-class economy, and it works for the Philadelphia market, where we tend to have bootstrap start-ups, not spin-offs by rich Intel or Microsoft expats. Partner Chris Fralic, 47, thinks all the tech buzz around here is potentially good for the firm’s business. “It’s a better support system,” he says. “It helps aspiring entrepreneurs see how it’s done and see they’re not alone.”
The Safeguard Scientifics campus in Wayne during the dot-com era was a tightly knit community of funds and start-ups that fed off one another. Now former Safeguard execs are dispersed. Rob McCord, 51, became Pennsylvania Treasurer. Garrett Melby, 45, formed Good Company Ventures. Wayne Kimmel’s Eastern Technology Fund was based on Safeguard’s campus. Now it’s independent and called SeventySix Capital. “Relationships are still critical,” Kimmel, 40, says. “But because of new social networking technologies like Facebook and Twitter, you’re able to develop more relationships.” With $50 million under management, -SeventySix invests $2 million or less in emerging companies. It’s backing social-gaming developer Ryzing and is part of the troika of local firms funding travel start-up PackLate.
Genacast Ventures & Comcast Interactive Capital
After helping to build and sell two online advertising start-ups (ad server Tacoda went to AOL for a reported $275 million in 2007), Dresher resident Gil Beyda, 47, decided to take his winnings and dabble. He formed Genacast in partnership with Comcast Interactive Capital. Both are based in the Comcast building, but while CIC typically plunks down $2 million to $20 million per deal, mostly on companies with strategic benefit to Comcast, Genacast targets four or five seed-stage deals a year in the $250,000-to-$750,000 range. “Where the later-stage fund may go to conferences, we go to meet-ups,” Beyda says. “They go to the Capital Grille, we go to a diner.”
DreamIt sounds like a make-a-wish fantasy camp for entrepreneurs, and in a way, it is. The angel investors behind the firm (started in 2008 by Mike Levinson, 49, David Bookspan, 52, and Steve Welch, 33, who’d made money with their own start-ups) assemble an annual fund of about $500,000, mixing their money with input from organizations like Ben Franklin Technology Partners. Each year, DreamIt invites 10 to 15 fledglings to participate in a summer-long boot camp, with each getting $15,000 to $25,000, shared space in the University City Science Center, and three months of advice from experienced mentors. Graduates of the program don’t all survive, but most are ready to explain themselves to bigger-ticket investors. “We don’t think the returns from this are going to take us to another level of personal wealth,” Levinson says. “We’re trying to help drive the region as a viable tech center.”
Good Company Ventures
Based at the Navy Yard and spearheaded by former Safeguard Scientifics executive Garrett Melby, Good Company uses a similar summer-camp model, focused on companies with a social mission in addition to a profit motive.