What was one of your most significant investments of the year and why?
We made a big investment, for us, in Santa Monica-based Conversion Logic. It’s right in our sweet spot at the intersection of software and digital marketing with experienced founders who we’ve known and worked with for years.
Jim Andelman, 47
Title: Managing Director
Firm: Rincon Venture Partners
Rank: Venture capital, No. 18
Years at firm: 10
Residence: Santa Monica
What was one of your most unusual investments of the year and why?
We co-led with Lowercase Capital a seed (round) in Mobcrush, which provides a live-streaming and communication platform for mobile games and mobile gamers. We don’t usually invest in consumer-facing businesses but were compelled here to make an exception.
When you partner with firms do you always work with the same ones or is it on a deal-by-deal basis?
Our most frequent co-investors are some of the other most active firms in L.A.: Upfront Ventures, Greycroft, Double M Partners, Lowercase Capital, Crosscut Ventures, and TenOneTen Ventures. We’ve also recently partnered with numerous others. Often the team has been interacting with other firms that they like and want to include in a syndicate.
What trends are you seeing in the sectors in which you specialize?
We invest almost exclusively in business-to-business Internet, software-based businesses. Mobile really has changed everything. We’ve all been using software as a service (Gmail, iCal, Evernote) on the powerful computers in our pockets for years now. That’s making it easier to get technology adoption in sectors that have historically been very slow adopters such as real estate, education, and health care.
How have declining valuations impacted your existing portfolio companies and the way you’re looking at potential investments?
For our portfolio companies that need to raise new rounds this year, we’ll likely incur more dilution for a given round size. For other companies, we are encouraging them to operate in a leaner mode to extend their runway or get to profitability with current resources.
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