Chris Fralic is Managing Partner of First Round Capital, an early-stage investment company.
AdExchanger.com: It seems like First Round is everywhere – ok, maybe not everywhere, but you all are invested in quite a few companies at an early stage. What’s the method to the madness?
CF: Yes we are busy, and we do think we have a method to our model. We typically work with companies at the seed stage where it takes relatively small amounts of capital to get started, and we provide the bulk of our value and time in the first 18-25 months of a company’s formation. We were one of the most active investors in 2009 according to this Wall Street Journal article (http://blogs.wsj.com/venturecapital/2010/01/22/one-of-these-venture-capital-firms-is-not-like-the-other/tab/article/) and now have 8 partners and investment professionals and we’re opening our NYC office in addition to our San Francisco and Philadelphia offices. We also focus on providing tools/platforms and “structural value” that go beyond just the capital we provide and the point person they have from First Round. But we do keep very busy and like to think we work as hard as our entrepreneurs.
What are a few key characteristics of a compelling product for an investment?
I’d say product is important but that the market size/opportunity and the entrepreneur/team are more important – we like to back great entrepreneurs going after big market opportunities. But on the product side, I’d say it’s really important to understand your customer and their problem and how your product solves it – too often that’s not understood or articulated clearly enough.
