Armory Square Ventures and the Evolution of Tech and Venture Capital
Reflections from Skaneateles, New York + Cambridge, Massachusetts
The Hunt for Solid Firms and Good Returns
Last summer, at the Armory Square Ventures annual meeting, Spencer Ante and Sree Sreenivasan highlighted legendary HBS professor, Georges Doriot’s key maxims for entrepreneurs. Three ASV portfolio company CEOs were among those who attended, and they spoke briefly on a few things that keep their own startup teams up at night.
Doriot took great care educating his students on how best to precisely and seriously evaluate manufacturing and business processes. He also believed CEOs had to watch competitors closely and keep tabs on young, novel entrants to industry.
As part of his assessment of Doriot, Spencer cited the importance of propitious timing, too. New services and ideas have to sync fundamentally with rapid shifts in consumer demand for a company to become successful. He explained how tech markets, too, can, at times, be variable and hard to predict (Spencer’s book, “Creative Capital,” on Doriot is here). (Btw, just catching up? See our previous notes from these conversations here.)
In VC and tech today, these maxims are still held dear. Large VCs and their smaller, Micro VC counterparts diverge on investment strategy, but the principles Doriot evangelized remain legion. They have become second nature, in many ways, across tech at-large. Some are so well-worn they are not attributed to Doriot at all, really (!). As it turns out, Spencer explained how plenty of the industry knowledge we take for granted originated from Doriot’s perspective. The painstaking, iterative approaches he cultivated to incubate new products (stressing when and where to pivot, too, for instance!) remain a cornerstone of how tech entrepreneurship is practiced in America.
For us, today, more often than not, Doriot’s principles illuminate how the industry he loved — venture capital — largely indigenous to this country — enjoys a vaunted reputation, worldwide, still (though, of course, several other places have now followed suit).
For ASV, a fund that has, so far, straddled two divergent geographies — Upstate New York and NYC — Doriot’s ideas are resonant. We have entered rounds early, monitored and helped our companies grow carefully, and focused on navigating complex product life cycles. Our Micro VC fund has steered startup teams to mindfully weather the more challenging phases of each product’s evolution and tried to guide each company toward next steps that track and anticipate fluctuations on the horizon.
Somak Chattopadhyay, Managing Partner at ASV, spoke with Edward Reitler, Managing Partner at Reitler Kailas & Rosenblatt (Reitler Law) on these concerns, generally, and on the Micro VC climate today (an intro).
The talk took place in Doriot’s hometown last August, at the late French immigrant’s alma mater. (Full disclosure: My father, Viney, teaches classes on VC and PE at Harvard and hosted the discussion. Many of his students are aspiring entrepreneurs and Micro VC fund managers with plans to enter the industry.)
ASV began operations in 2014 and Reitler Law helped structure ASV Fund I at the outset — so the talk was candid. Presently, Ed is one of NYC’s leading venture attorneys, representing dozens of VC funds and over 150 venture backed companies.
Somak and Ed discussed the perils associated with operating a Micro VC fund today, at a frothy time, when high mark-to-market valuations have become relatively common. In posts that follow, we will elucidate these insights in greater depth and identify industries that remain underserved.
For now, see a clip from their talk on how the Micro VC world is faring.
More in coming weeks. Stay tuned.