Venture capitalist Brad Feld has been active as an entrepreneur and investor since 1987. Feld uses a disciplined approach to investing.
Here are some ways to invest like Feld.
About Foundry Group and Feld: Foundry Group is the venture capital firm led by Feld and others.
Foundry Group was an early investor in Zynga Inc (NASDAQ:ZNGA), MakerBot and Fitbit Inc (NYSE:FIT). Current investments for Foundry Group include Rover, Seat Geek and StockTwits.The venture capitalist group takes stakes in companies through seed and series A investment rounds. Foundry also provides additional capital throughout the entire life cycle of the startups, helping along the way with its experience in starting and growing companies.
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Invest In What You Know: Feld started a software company while he was a student at MIT. Software and technology companies are the main focus of investment at Foundry Group.
“We have consciously decided to only invest in areas we know well and think we can be meaningfully additive to and constrain our focus to these themes,” Feld said in a 2010 piece describing his approach to venture capital investing.In the software and technology fields, the company is looking for targets that fit the following areas: distribution, human computer interaction, marketplace and protocol. It also seeks what it calls the “adhesive” and “glue” components of the software industry — things that help tie everything together.Foundry is attempting to get exposure to all parts of the software industry with these target areas and capitalize on what it sees as the next areas of growth in the sector.Investors are often looking for hot new sectors and areas to invest, but could do best by sticking to sectors they have experience with or basic knowledge.“This limits our time exploring lots of things that have a low probability of being an investment for us,” Feld said on sticking to the software sector.
Taking The Leading On Investments: A practice by Foundry Group is to be the lead or co-lead on investments it makes. The fund’s leaders are indifferent as to whether they are the only ones funding a startup or if other VC firms are involved.
The company takes stakes that range in price from $250,000 to $10 million.While it could be important to have a diversified portfolio, following Feld’s practice here would be to take large stakes in high conviction plays. Investors could take larger stakes in the companies they believe the most in to act as a lead investor.
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