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Thursday, September 11, 2014

Rise of the Micro VC

By: Matthew J. Moisan

Securities and Venture Capital 

The most significant trend in the venture capital community is the rise of seed or micro-venture funds.  These funds target early stage companies and typically invest between $25,000 and $500,000 in a particular company.  They are on the uptick, increasing their investment activity by 77% as compared to Q1 2011. The managers of these funds range from former venture capitalists, to angels, to larger venture firms that use these funds to prospect later opportunities.

In my experience, these funds fill the gap that has developed between an angel round and a traditional venture capital round providing much needed funding to early stage companies.  Moreover, as entrepreneurs continue to leverage technology the ability to prove concept become less expensive.  This trend provides significant opportunity for the micro-venture fund community.

According to this CB Insights analysis, internet and mobile currently dominate micro VC investments.  Within the internet section, Advertising, Sales & Marketing tech saw the highest percentage of deals.  In the mobile section, Gaming and Social ranked highest.  Notably, two NY micro VC firms, Lerer Ventures and Founder Collective rank third and fourth on the list of most active micro venture funds.   For a full list of the 135 micro-venture funds click here


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