Two big pieces of news today for First Round Capital — a sign of more growth, and more opportunities, at the early-stage VC firm: the company has closed on another fund, and it has created two new partners, Phineas Barnes and Kent Goldman. Previously both had been principals with FRC, which they each joined in 2008.
The move signifies the focus that VCs are keeping on early-stage investment and the efforts they are making to find the best entrepreneurs and startups to fill out their portfolios by putting strong talent into their teams. Barnes and Goldman will join existing partners Chris Fralic, Rob Hayes, Josh Kopelman and Howard Morgan.
Kopelman notes that the new fund, First round Capital IV, will be the same size as its last fund, $135 million, and that the investor base will also remain the same.
“Every single one of our existing institutional Limited Partners has recommitted to our new fund – and we are honored and thankful for their continued support,” he wrote in a blog post. We first reported on this fund back in April when we noticed the SEC filing announcing it.
He also notes that the company will continue to remain focused on seed-stage investments. “We believe that the first 18-24 months of a company’s life are a special time – where the DNA of a company gets established. And seed-stage is the only place we play.”
Meanwhile, Barnes says that there are no new specific investments being announced alongside the news, and that in large part it will be business as usual for him and Goldman: the two will continue to work on firm initiatives like Office Hours and the Plus Startup speaker series, in addition to their core investment activities.
“In many ways the change in status reflects a title catching up with the reality of our responsibilities,” he told me earlier. “We will maintain our focus on helping them build great companies by leveraging our time, our personal networks, and the fantastic products, services and events available through the First Round Network and our active community of world class entrepreneurs.”
Just as FRC itself has grown from being a single office outside of Philadelphia to a business with additional offices in San Francisco and New York, funding some 185+ companies, the market for seed and early-stage investment has also boomed in the last several years — both in terms of the VCs offering it, and the startups seeking it.
“I think this is good,” Barnes told me. “More access to capital at this stage means more ideas get funded, but it also forces the sources of that capital, including First Round, to innovate and provide meaningful value beyond the check that we write.”
Barnes notes that at FRC this has translated into a lot of activity around what FRC calls the “Platform,” run by Brett Berson, which includes engineers on staff that build products and a team dedicated to other services and events to help portfolio companies.
He says that these extras are essential value-adds in today’s world of easy funding, where a VC has to stand for something more: “When a watch can raise $7 million on Kickstarter, investors have to add significant value to be relevant to the smartest people who are building the stuff that will change the world.”
In terms of what companies are exciting Barnes and Goldman (and the rest of FRC) these days, it seems to be a moving target based on how the target customer is being engaged. “I tend to start with the end user and if there is magic in that interaction, if a company is creating an experience that changes the way the end user does something (the way they learn, the way they buy, the way they manage their money, do their job or engage with their health) I am inspired and want to learn more,” he told me.
The respective experience that the two have are nice bookends to the life of a tech company: from startup stage to huge global entity. Barnes was the founder of ResponDesign, an independent video game company. Meanwhile, Goldman spent years at Yahoo (before it, in the words of Michael Arrington, it started to get “ridiculed” in 2008).
First Round Capital has already made a pretty big impact in the startup world, as evidenced by some of their portfolio companies. They include car service Über, mobile payments company Square, social network Path, and Simple, as well as a number of e-commerce investments like Warby Parker, Birchbox and Fab; and a few B2B properties, too, such as Monetate.