June 22, 2000
New Trends in Early Stage Investing
Surface at ‘Early Stage Venture Capital Alliance’
Twelfth Annual Conference
Woodside, CA -- Thirty leading early stage venture
firms from across the country convened to share common challenges
and practices, and discuss issues critical to their businesses at
the Early Stage Venture Capital Alliance Conference (ESVCA).
The event was held June 5 in San Francisco.
The ESVCA is a community of more than 150 seed and early stage
venture capital firms. The Alliance maintains a confidential
atmosphere which allows managing directors to freely exchange candid
observations and information on the most sensitive and timely topics
facing the industry. For the last nine years, the Alliance
has been chaired by Vincent Occhipinti, a founder and Managing Director
of Woodside Fund, a Silicon Valley VC firm that invests in early
stage technology ventures.
This year’s conference theme: ‘Building For Sustainability’ generated
animated discussions about the opportunities and challenges involved
with building sustainable companies and venture funds. During
the course of the day-long roundtable, several trends emerged from
the discussion of common experiences:
Fund Structures: Early stage venture capital firms
are increasingly utilizing venture partners and entrepreneurs in
residence, with mixed results.
Investment Focus: There has been a marked evolution
from B-to-C, to B-to-B, to Infrastructure and fiber optics.
In-house Support Services: Firms are adding Human
Resources and Public Relations functions to serve the portfolio
companies as well as the firm. While none of the conference
participants had added in-house marketing expertise, the idea stimulated
a positive reaction.
Recruitment: A significant challenge for portfolio
companies and the VC firms themselves. Increasing compensation
packages for top tier CEOs were discussed. Packages now include
unusual perks and financial privileges.
Valuations: Valuations are down, post market correction,
except for telecommunications, fiber optics and certain networking
businesses, which seem less affected.
Syndication: VC are syndicating rounds less at the
earlier stages due to the increasing size of funds, but is still
seen as a beneficial resource to portfolio companies and to the funds.
During a wrap-up discussion about future plans of the ESVCA, conference
attendees expressed interest in more frequent meetings. “The
ESVCA is the forum for early stage venture firms to come
together and freely discuss important subjects. The idea exchange
is very valuable, and that’s why the ESVCA is the only venture investing
conference I attend, ” said ESVCA steering committee member Noel
Fenton, a General Partner at Trinity Ventures of Menlo Park, CA.
Dennis Dougherty, also a member of the steering committee and a
founding General Partner of Intersouth Partners, located in the
Research Triangle area of North Carolina added, “There’s no “how-to”
source for how to run a venture capital fund. The ESVCA provides
members a terrific way to calibrate their company’s business growth
According to ESVCA Chairman Vincent Occhipinti of Woodside Fund,
while ESVCA members are friendly competitors, they share a common
goal to help entrepreneurs succeed. “Through the Alliance,
we learn from individual members and the group as a whole.
This means the Alliance can have a very positive impact on the early
stage market place,” he stated.
ESVCA has been a unique organization since its inception over
twelve years ago. While the venture community provided a host of
conferences on venture capital investing for VCs and the entrepreneurial
community, none existed specifically for early stage venture capitalists.
The Alliance’s mission is to serve its members, and in doing so,
contribute to the progress and strength of the early stage investing
About Woodside Fund
Founded in 1983, Woodside Fund has one of the longest and strongest
track records of success in early stage venture capital investing.
All Woodside Funds have performed in the upper quartile of the industry
for venture capital partnerships formed in their respective years.
Woodside Fund’s latest partnership, Woodside Fund IV, had its final
close in March, and invests between $5 and $10 million in early
stage ventures in Internet and electronic commerce, computer software,
telecommunications, and networking. The Fund serves as an
active lead or co-lead investor in most of its portfolio companies.