Sunday, January 31, 2010

First Round Capital Exchange Fund

First Round is one of the investors in VigLink (Google Ventures is another), so I have started watching them. Oliver, our CEO, was at the CEO/Founder summit last week, which sounded amazing. I was especially excited by this announcement of their new exchange fund. Josh Kopelman describes the benefits well,

"When I was an entrepreneur, I remember the feeling of having all my eggs in one basket -- and it is our hope that this fund will remove some of that stress.  Now our entrepreneurs can get the same diversified portfolio that our limited partners get (with better economic terms) and receive a financial benefit when other First Round Companies exit (even if their own company is still years away from an exit)."

I agree that mediating risk with this diversification removes a barrier to founding a company, but the thing that is most exciting to me about the exchange fund is the sense of community it must facilitate among the participating entrepreneurs. I have heard many blogs describe the process of starting a company as lonely and stressful, which it is. But for a carefully selected community of founders, which First Round's portfolio is, I imagine the potential for personal and professional synergy and coordination is massive!

See coverage here and here.

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