Josh Kopelman First Round Capital Building a Venture Capital Empire

Josh Kopelman's journey to building a venture capital empire at First Round Capital is a remarkable one. He co-founded the firm in 2004 with two other partners, including Howard Morgan, a well-known venture capitalist.

First Round Capital started small, with just $35 million in initial funding. This humble beginning laid the groundwork for the firm's future success.

Kopelman's leadership and vision played a significant role in First Round Capital's growth. He has been instrumental in identifying and investing in innovative startups.

Josh Kopelman grew up in Great Neck, New York on Long Island.

His father, Dr. Richard Kopelman, was a professor at Baruch College, and his mother, Carol, was a real estate broker.

Josh attended the Wharton School at the University of Pennsylvania, where he graduated in 1993.

During his sophomore year at Wharton, Josh co-founded Infonautics, a company based in Wayne, Pennsylvania, in 1992.

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Josh Kopelman's impressive track record in the venture capital world is a testament to his expertise and influence. He ranked 3rd on the New York Times list of Top Venture Capitalists in 2008.

Kopelman has consistently ranked in the top 20 of the Forbes Midas List of the top 100 tech investors, including 18th in 2011, 6th in 2012, 12th in 2013, 11th in 2014, 4th in 2015, and 6th in 2016.

In 2007, Kopelman was named one of "Tech's New Kingmakers" by Business 2.0 magazine, a title that reflects his growing influence in the tech industry.

He was also recognized as a "Rising VC Star" by Fortune magazine in 2008, solidifying his position as a rising star in the venture capital world.

In 2014, Kopelman was named one of the top ten angel investors in the United States by Newsweek, a distinction that highlights his ability to identify and support promising startups.

As of 2016, Kopelman had taken on a new role, being elected chairman of the board of directors of The Philadelphia Inquirer.

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Josh Kopelman is a well-known figure in the venture capital world, and his public presence is quite active. He is a partner at First Round Capital, a venture firm that has invested in companies like Uber, Warby Parker, and Venmo.

Josh regularly shares his thoughts and insights on Twitter, where he has over 60,000 followers. He often discusses trends and ideas in the tech industry.

First Round Capital has a strong online presence, with a website that features a list of its portfolio companies.

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Josh Kopelman co-founded First Round Capital in 2004 with his partners, Jeff Jordan and Howard Morgan.

The firm was initially based in New York City, but later moved to San Francisco.

First Round Capital started with a $35 million fund and a focus on seed-stage investments in the United States.

This approach allowed them to identify and support innovative startups early on in their development.

Their first investment was in a company called TellMe Networks, which later sold to Microsoft for $800 million.

This deal helped establish First Round Capital as a credible player in the venture capital space.

First Round Capital's success can be attributed in part to Josh Kopelman's experience as a serial entrepreneur.

He had previously founded several companies, including Infonautics and Half.com, which was acquired by eBay for $160 million.

Kopelman's expertise and network helped First Round Capital attract top talent and secure investments in promising startups.

Their investment strategy focused on identifying companies with strong founders and innovative products.

Today, First Round Capital has invested in over 300 companies, including Uber, Square, and Warby Parker.

Their success has made them one of the most respected venture capital firms in the industry.

At First Round Capital, decision-making is a collaborative effort. The entire partnership votes on each investment, requiring a 2/3 approval for all investments.

The firm's voting process is designed to encourage diverse perspectives and minimize the influence of any single partner. No partner has a veto, which helps to prevent decisions being driven by individual opinions.

First Round's voting process is based on a 70-30 split, with ~70% of decisions focused on the founder and ~30% on market/product. This emphasis on the founder's potential is a key aspect of the firm's investment strategy.

The firm uses Salesforce to track "time to decisioning", the number of days between meeting a founder and signing a term sheet. This metric has decreased from 90 days in the mid-to-late 2000s to 9 days leading up to 2020.

Pricing and ownership are crucial aspects of investing, and First Round's approach is worth noting. They've learned from their early days, where they lost deals like Twitter and Dropbox due to price.

Josh advises against turning down deals based on valuation, calling it a "mental trap." He believes valuation is 90% science and 10% art, where you need to know when to cave on valuation.

First Round co-led the first round of funding for Square with Khosla at a $40M pre-money valuation, which worked out. They recognize the importance of maintaining discipline to produce top-tier returns.

Josh thinks about valuation as representing two things: the size of the opportunity and the amount of risk between where you are today and success. This perspective helps them make informed decisions.

First Round believes it's essential to build ownership on the first check, as it gets expensive to accumulate ownership in later rounds. They commit to taking their full pro rata in 100% of outside-led second rounds.

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Decision making is a crucial aspect of venture capital and startups. Josh believes that picking the right idea and founder is a huge skill, and most VCs spend 10% of their time doing it, but it drives 80% of returns.

Time to make the pick has decreased significantly since Josh started First Round. They track the number of days between when a partner first meets a founder to signing the term sheet, which has decreased from 90 days to 9 days.

The First Round partnership doesn't follow traditional investment theses. They focus on finding truth and asking the right questions, rather than trying to identify obvious trends. A successful outcome in a partner meeting can be learning something from the other partners and not investing in the company.

Key questions they ask themselves include what is the objective truth, what is knowable and what isn't, and what risks are worth taking. They also vote on each investment, requiring 2/3 approval, and most decisions are based on the founder and market/product.

A great board member is not the one with all the right answers, but the one who asks the right questions. Josh empowers founders to make better decisions by asking questions and bringing out their insights.

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First Round has invested heavily in building a platform team, spending more on this effort than many seed stage funds generate in management fees. This is a deliberate choice to create a community of connected companies.

Their goal is to transition a portfolio of independent companies into a cohesive group where founders can support and learn from each other. This is a departure from the typical venture capital approach, which can be seen as an anti-network effect business.

First Round wants to bring network effects into the VC business by connecting CEOs and employees across their portfolio companies. This creates a community where founders can give and take, paying it forward and viewing participation as a benefit.

Their platform is designed to foster cohorts and peer groups, both online and offline, where founders can share knowledge and experiences. This approach is a key differentiator for First Round, setting them apart from other venture capital firms.