Venture Capital Trends to Keep an Eye on

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Oct. 23 (Bloomberg) -- IA Ventures founder Roger Ehrenberg discusses investment opportunities in big data with Deirdre Bolton on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Startups is getting harder and harder.

Why is that?

Part of it is the cost of getting a company up and running has gone down so much and the proliferation -- i happen to think that is true.

Together with the explosion of accelerators and micro vc's an angel funds, you now have, the aperture is so wide, yet the amount of capital available to scale these companies is roughly the same.

So signal to noise is skyrocketing.

It is very hard to pick.

I want to come back to these changes as far as funding goes.

I know you're a friend of naval.

In the meantime, just to focus on the quality versus quantity, what does this mean for you as an investor?

Doesn't mean you invest last and then put in more?

How is it changing the way you behave?

So we are very much in old- style vc.

Old-school, you say with proud -- with pride.

Literally where we are focused on building partnerships with companies.

We are in no -- you are the specialist.

To be honest, that is how it works.

That is true, however, as we have gotten more comfortable in our approach four years into the venture, we are making fewer investments, and going very deep into companies.

For instance, we have made three investments this year.

Which is different than the pace you were doing in the past.

Is correct.

We had been doing more like eight investments are year.

It is not to say we would not do eight investments, just that our -- the bar is higher.

We are investing more time early on.

Speaking of that, you are a director and this is for the industrial age.

What about this company made you commit?

It was interesting because it is at the intersection of so many things.

On the one hand, it is leveraging the huge advances in cloud computing that had happened at hq, but there is a lack of connective tissue between the two, and that is what site machine is going after.

Helping with quality management.

Basically any company that has an engineering or industrial arm, this is useful for them.

And any process.

So they have clients in biotech, oem's, the big auto companies.

So you can see a natural evolution to national defense, anything where there is manufacturing.

This is another one.

This is meant to be for developers.

Even more than for developers.

Probably the easiest way to describe it is amazon for everyone.

Amazon would say they are for everyone.

If you actually try to get set up on amazon you need to be a certain kind of backend developer.

The documentation is really poor.

The scale is expensive.

The founders of digitalocean said we are going to start with those who are underserved.

It literally you can get it up and running in less than a minute.

It scales incredibly easily and it is dirt cheap.

Super fast and cheap and accessible.

What is not to mike?

I have to cycle back to angel list.

They started this defendant -- syndicate feature.

Do you think it is basically syndicate -- do you think it is basically going to knock at lower tier vcs?

If you do not have an advantage, it it is.

Proprietary deal flow is the lifeblood of every venture firm.

If you have a huge brandon you deliver over the years, that is one thing.

If you're a smaller player, like us, who have carved out a particular identity, and reputation, that is another.

If you are stuck in the middle, really hard.

I was going to say, you have this proven track record, even as an angel.

So i could see people wanting to say whatever that ties investing in, i want to invoke -- invest in as well.

You could almost become your own brand.

I do not know if you saw what foundry group did, they actually have a dedicated strategy around angel list.

I think that is very interesting.

We, as a small firm, with such deep engagement, we do not have the bandwidth to do that.

What we do is we have a universe of investors that will join us in our investments to move companies.

Always lovely to see you.

This text has been automatically generated. It may not be 100% accurate.


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