
First Round Capital Open Application for Startups - _pius
http://firstround.com/openapp
======
staunch
YC has had the field to themselves for a decade because no other firm actually
believes the best people are outside their personal networks.

Other VCs want to believe in "proprietary deal flow" and their own ability to
worm into hot companies. Probably because it seems more a sure thing than,
_gasp_ , actually judging startups on their merits, like YC at least tries to
do.

~~~
mbesto
> _YC has had the field to themselves for a decade because no other firm
> actually believes the best people are outside their personal networks._

Unfortunately at scale YC operates today (~2,500+ submissions per batch) this
is no longer true. It's simply too difficult to get through all of that noise
without "knowing someone", and the exceptions to that rule are getting rarer
every batch.

Source - ask any YC Alumni candidly.

~~~
tlb
This is not the case. Most companies YC funds do not come with alumni
recommendations. Which in a way is surprising -- with 2000+ alumni, it's not
that hard to meet one.

Source - YC partner.

~~~
mbesto
Hi tlb, thanks for your unique perspective! I didn't mean to imply that an
actual alumni recommendation in the traditional sense was the norm, akin to
perhaps a letter of recommendation for grad school. I admit, my comment
"knowing someone" was quite ambiguous, so you probably thought that an
official recommendation was what I implied.

------
zmitri
Hmm this seems like a waste of time. Very nebulous. You should focus on
building your product and users instead. If you do that and succeed at it
you'll be able to get a meeting with whoever you want.

Most investments come from warm referrals or investors you meet and build a
relationship with. I would be surprised if this got you a serious meeting with
a partner who can make a decision.

How is this different than YC you ask? YC makes their terms clear and upfront
(120k for x%) and has a whole process for reviewing all the applications you
send in. Not only that, it is in YC's best interest to introduce you to other
investors.

------
ffoxdd
Don't do it! They'll put you in an embarrassing holiday music video!

~~~
sytse
Lol! For anyone who hasn't seen these great video's
[https://www.youtube.com/user/FirstRoundCapital](https://www.youtube.com/user/FirstRoundCapital)

------
mcginleyr1
I've been involved in a First Round company since just before the A round.
Generally against VC for my ideas. Kinda thinking just grow slow on the side
as much as you can, more a lifestyle business. My time with a few VC backed
companies has made me jaded I guess.

------
teammatters
This is nice to see and is a step to breaking down the ivy league snob high
school mentality that Ive experienced with some VCs.

Case in point a VC whose east coast venture recently imploded was speaking at
a conference. After the conference ended entrepreneurs started to approach and
pitch him. He acted like he was king crap and he didn't to be bothered by
entrepreneurs, but umm that's what he signed on for. He even later made a rude
remark on Twitter about an entrepreneur he just met(didn't name names).

VCs like him... please get over yourself, be humble/nice and don't be D*&K!
Because one day like the VC I noted above, your on cloud 9 and the next you
look like a fool/complete failure in front of the community!

------
minimaxir
It's worth noting that HireVue, the company used to process the applications,
is _not_ a First Round Capital-funded startup, which is unusual as VC-firms
tend to favor their own startups for external affairs. (Hacker News, for
example, has had interaction with YC companies Octopart, Algolia, and
Firebase, possibly more.)

~~~
zkhalique
I think they got this idea from indie.vc

------
kenrikm
Semi-Curious about the "seed-stage" investments being 1-3m as that seems
rather large even by post demo day YC standards. Unless the expectation is
that there has been a friends/family/angel round prior to this with existing
growth/traction from said investments? I think some additional clarification
on what traction/stage First Round is looking for would save some time on
their end and also for companies applying that might not fit into that mold
not to waste their time.

~~~
johan_larson
Here's a useful PDF:
[https://www.preqin.com/docs/newsletters/pe/Preqin_PESL_Oct_1...](https://www.preqin.com/docs/newsletters/pe/Preqin_PESL_Oct_13_Average_VC_Deal_Size.pdf)

Series A rounds are typically slightly north of 5 million. It's hard to make
out, but seed rounds seem to average some fraction of a million.

So the characterization of 1-3 million rounds as "seed" does seem odd.

------
nodesocket
Why not integrate with the AngelList platform, so I can just submit my startup
to FirstRound that way?

~~~
solve
The Angel List application process is horrible. Surprisingly horrible. It
pastes all of your private answers to your public profile without even asking,
it sends no confirmation emails when you submit, it's junk. Feels like
something an intern coded up in a day and then abandoned. Would not recommend.

On a side note, I've grown be highly suspicious of any accelerator / VC that
refuses to create their own form, and instead uses Angel List / F6S for the
forms. If they're that lazy, I'll bet that you're dealing with the used car
salesman kind of VC.

~~~
kmontag
AngelList dev here. FWIW, we do have a shared set of application questions
which also appear (with limited visibility) on your profile, but any
accelerator-specific questions are kept private to that application. We also
do send confirmation emails (though that wasn't always the case) :)

------
yid
> Should everyone apply to First Round through the OpenApp? > No. The best way
> to reach us is still through a referral.

I'm curious why even an "open application" has big bold lettering saying that
referrals are favored over the application itself. Is spam really such a huge
problem, or is this some sort of signaling mechanism?

~~~
jasode
Yes, the "signaling mechanism" is one of the oldest kind in civilization: if
others you know & trust see something of value, then you give tremendous
weight to that opinion.

A parent would rather hear about a good babysitter referred by a friend rather
than watch 10 video presentations of babysitters that nobody in her circle
knows. The same goes for finding doctors or lawyers. Your colleagues opinions
on professionals they know will be more helpful than watching 10 videos from
unknown attorneys. An investor is not any different in preferring referrals
over videos.

Check out the importance that Larry and Sergey placed on being referred to
Sequoia and how they needed help to make it happen. It is a story told by
investor Ron Conway from one of the YC startup videos:

[https://www.youtube.com/watch?v=uFX95HahaUs&feature=youtu.be...](https://www.youtube.com/watch?v=uFX95HahaUs&feature=youtu.be&t=27m46s)

[https://www.youtube.com/watch?v=1z87RGFGuxQ&feature=youtu.be...](https://www.youtube.com/watch?v=1z87RGFGuxQ&feature=youtu.be&t=21m1s)

------
sparkzilla
I think this initiative great for companies like mine who are outside the VC
and Silicon Valley loop. However, I wish it was through a normal application
process which uses a text-based application, followed by an interview in real
life or on Skype. It's a huge extra level of stress to have to make a video
for multiple questions with 30 seconds prep for each answer, with no human
feedback, and with no chance of re-doing your answers. It's the equivalent of
doing 18 Y Combinator one-minute videos live back to back with no chance of
fixing mistakes. In fact, because I didn't know how the system worked and
pressed the wrong button I've already screwed up the first question with no
chance to fix it. I don't know if I should just give up already, or go through
the rest of what is really an unnecessary painful process. Don't get me wrong,
I've made videos for Y Combinator applications (one minute usually takes me
and my partner at least ten tries) and am happy to talk on Skype, and of
course do presentations in real life, but this format sucks.

~~~
sparkzilla
I gave up. It's simply not worth my time and stress to go through this kind of
torture to get a meeting.

~~~
robertandy
Dude c'mon it is not giving up at all. It's more like realizing your own place
in the world. Make it good!

According to some, investor class has already undergone some major disruption.
And that's forcing them to think of better ways to not screw up. But what
we're obviously going to see next is only more blood on the dance floor.

Sit back. Enjoy your work.

------
faramarz
It's an experiment, and worth mentioning this line from the site

    
    
      "Furthermore, for the first few months of this experiment, 
      we will review only the first 100 interviews submitted
      through the Open App each month."

------
graycat
I know some people in (1) the top of business in the US, (2) high end US
research academics, and (3) information technology (IT).

(A) Bluntly likely none of those people knows anyone at First Round Capital.
(B) Bluntly, with the exception of Howard Morgan, the qualifications of the
people at First Round Capital in business, research academics, and technology
are not high enough to be respected by the people I know. Net, the people at
First Round Capital and myself know nearly none of the same people.

Moreover, for my technology startup, there is no one at First Round Capital
with business, academic, or technology qualifications good enough for me to
hire for a significant position. I'd have a tough time respecting any of them
to take their _advice_ on my startup.

Once, just once, I did call a person I know, the founder, COB, CEO of a major,
world famous company and asked for an introduction to his CIO. The CIO and I
talked and had a nice review of history, and he gave me an introduction to a
partner at a venture firm with a partner on the BoD of the company. Net, the
introduction meant nothing -- the venture partner paid no attention to the
introduction or my project at all; we did communicate but just as in a _cold
call_.

I never again wanted to bother any of the high end people I know, bother them
to _introduce_ me to a venture firm just to get past some absurd _hoop_ the
venture firm erected but ignored.

Net, venture firms who want _introductions_ get put at the bottom of my list;
the venture partners and I nearly never know or respect the same people; I'm
not going to pester the good, important people I know and respect to have them
waste their time communicating with people as poorly qualified in business,
research, and IT as all but a small number of venture partners. No way.

Next, in contacting venture firms just via _cold calls_ , I've had little
trouble getting through and getting a response including several hour long
conference calls. In particular well known venture partners at well known
venture firms are aware of my work on my project, all without any
_introductions_.

Net, it appears to me that _introductions_ are not really necessary and not
very helpful.

What was helpful was having a _team_ : For a while I did that, but too soon I
encountered the common problem -- disputes. So, now I'm a solo founder. There
are some serious advantages being a solo founder, but it does appear that
getting a phone conversation with a venture partner as a solo founder is more
difficult. For whatever reasons, venture firms don't like solo founder
startups.

Moreover, it appears to me that, really, venture firms have their feet locked
in concrete that, with only some rare exceptions, they just will not pay much
attention to an IT startup before the software is developed and there is
significant _traction_ growing rapidly. E.g., venture partner Fred Wilson at
his Union Square Ventures recently made it clear on his blog AVC.com that he
just will not fund software development. Okay by me.

But at

[http://a16z.com/2014/07/30/the-happy-demise-of-
the-10x-engin...](http://a16z.com/2014/07/30/the-happy-demise-of-
the-10x-engineer/)

with

"The Happy Demise of the 10X Engineer"

By Sam Gerstenzang

is in part:

"This is the new normal: fewer engineers and dollars to ship code to more
users than ever before. The potential impact of the lone software engineer is
soaring. How long before we have a billion-dollar acquisition offer for a one-
engineer startup? How long before the role of an engineer, artisanally
crafting custom solutions, vanishes altogether?"

So, Andreessen-Horowitz is admitting the possibility of a solo founder
creating a billion dollar startup.

I don't see just why not: Venture firms want the code written and traction
significant and growing rapidly. If the startup is ad supported, then it
doesn't take much traction to let a solo (single) founder startup have cash
enough for _organic growth_ , that is, without equity funding. Then, if enough
of the 3+ billion Internet users like the work a lot, presto, bingo, a billion
dollar startup.

Indeed, for my startup, I believe that, as the founder, I need to "know my
business" (a traditional criterion), and that includes the code, the servers,
how to please the users, how to please the paying customers, how to handle the
billing, bookkeeping, accounting, legal, etc. So, I'm not seeing where a
larger _founding team_ is necessary. First hire? Likely an Office Manager, and
not a _co-founder_.

There is some irony: Necessarily venture firms are looking for highly
exceptional projects, but their means of looking are mostly to compare with
simplistic patterns from the past -- not promising. And as in

[http://www.kauffman.org/newsroom/2012/07/institutional-
limit...](http://www.kauffman.org/newsroom/2012/07/institutional-limited-
partners-must-accept-blame-for-poor-longterm-returns-from-venture-capital-
says-new-kauffman-report)

and

[http://www.avc.com/a_vc/2013/02/venture-capital-
returns.html...](http://www.avc.com/a_vc/2013/02/venture-capital-
returns.html#disqus_thread)

on average the venture firms are not making much money doing this.

Thankfully the US NSF, NIH, DARPA, various other parts of the US DoD, commonly
ignore simplistic patterns from the past and, instead, actually get expert
evaluations of projects submitted on paper. Moreover, the history is that
projects that do well on such evaluations have much better _batting average_
or _ROI_ than US IT venture capital.

E.g., for the Manhattan Project, the US DoD (then the War Department) didn't
reject the project because it looked nothing like the long history of bombs.

The CIA didn't reject the SR-71 because it looked very different from anything
in the past of aviation.

The US Navy didn't reject the first satellite navigation system because it
looked nothing like anything in the history of navigation.

NSF prize winning research rarely looks much like the past.

The Human Genome project funded by the NIH looked very different from anything
in the past.

Intel is shooting for 10nm -- again, _new ground_ significantly different from
anything in the past.

But only a tiny fraction of US IT venture partners have the ability, say, of a
project reviewer for a leading peer-reviewed journal of original research or
the NSF or NIH, to review leading-edge technical material. That's been their
business model. Okay.

Yes, venture firms on their Web sites commonly claim to have "deep domain
knowledge". Curious: Only a tiny fraction of US IT venture partners have the
qualifications even to be admitted to the graduate program where I got my
Ph.D.

Indeed, Google search

"deep domain knowledge" venture

gives "About 40,600 results". I've read the backgrounds of hundreds of US IT
venture partners, and I doubt that I've seen over 10 that have the
qualifications for "deep domain knowledge" in anything very technical. I've
seen a lot of lawyers, history majors, MBAs, international studies majors,
English majors, etc. and darned few math, physics, engineering, or computer
science majors.

It looks like in their educations, only a tiny fraction of the US IT VCs liked
the STEM fields.

I published a paper in computer science. The paper has a typo. Here I make a
public bet, of one dollar, that no US IT venture partner on their own can find
the typo. Should such a person wish to try, then reply here, and I will send a
PDF of the paper.

Hint: It would be good to be able to find, say,

Patrick Billingsley, 'Convergence of Probability Measures'

fun and easy reading, and for that should have greatly enjoyed, say, at least
the first ( _real_ ) half of

Walter Rudin, 'Real and Complex Analysis'

and

Walter Rudin, 'Principles of Mathematical Analysis'.

Come on US IT VCs: You've got "deep domain knowledge", high determination, are
all-go, never stop, never give up, commonly leap tall buildings at a single
bound, have over the top self esteem, etc. Should be a piece of cake for you,
right?

I'll save you some time:

(A) Look up the definitions of countability and of a sigma algebra. Then show
that there are no countably infinite sigma algebras.

(B) For positive integer n, the real numbers R, R^n with the usual topology,
and subset C of R^n closed in that topology, show that there exists function
f: R^n --> R zero on C, positive otherwise, and infinitely differentiable.
Notice that examples of C include Cantor sets of positive measure, the
Mandelbrot set, and sample paths of Brownian motion. Curious result.

If you find (A) and (B) easy, then by all means, also with your "deep domain
knowledge", read Rudin and go for the typo also using Billingsley.

What does the paper with the typo have to do with IT? It's likely the best
thing so far for detecting _zero day_ problems in large server farms and
networks.

Point: Only a tiny fraction of US IT venture partners have the "deep domain
knowledge" necessary to evaluate new work in information technology.

So, they have to evaluate based mostly just on _traction_.

As far as I can tell, nearly everything else US IT VCs say they want to see is
just smoke to cover the one thing they really want -- traction significant and
growing rapidly.

Point: Due to the possibility of a solo founder with tiny burn rate, waiting
for _traction_ will be too late.

Can a solo founder of an IT startup hope to be successful without equity
funding? Should be: All across the US, cross roads to the largest cities, solo
founders do well mowing grass, selling pizza or hamburgers, pumping gas,
paving driveways, ..., _big-truck, little-truck_ distribution businesses, etc.
without equity funding. IT should be an advantage.

------
robertandy
Summary:

> Should everyone apply to First Round through the OpenApp?

> No. The best way to reach us is still through a referral.

Outcome: Zilch.

------
notsony
The First Round team doesn't seem very diverse. Lots of white men, white women
and a few Asian ladies. Not a single Asian male. Is there a glass ceiling?

[http://firstround.com/people](http://firstround.com/people)

~~~
nrb
Are you for real? Diversity isn't achieved my ticking checkboxes next to each
race or nationality.

~~~
ejstronge
Totally agree with you.

But, the current makeup of the team (presumably) indicates that the hiring
process didn't rely on venues where other nationalities/races predominate. You
might respond that the team hired the best candidates available - which could
indeed be true - but GP's point is worth raising, if inelegantly phrased.

