Jonathan Tower on the Series A Gap in VC and growing start-up ecosystems

On today’s Tank Talk we have Jonathan Tower, renowned venture capitalist and author of a recent piece on the Series A gap in VC.

Jonathan’s Background: Jonathan Tower is the Managing Partner at Catapult, a cross-border venture capital platform which specializes in investing in emerging tech hubs outside Silicon Valley. Jonathan has deployed more than $220mm in more than 50 companies across three core investment themes: consumer (ecommerce, marketplaces), enterprise (software, services) and frontier technologies (AI/data/robotics, etc).

Jonathan's investments include early bets in Jet.com (acquired by Walmart for $3.5 Billion), Dollar Shave Club (acquired by Unilever for $1 Billion), Freshly (acquired by Nestle for $1.5 Billion), and many other companies that have gone on to become market leaders.

Jonathan began his venture career with Gabriel Venture Partners and, more recently, was a Managing Director at TriplePoint Capital and a Managing Director at Hercules Capital. Previously, he was CEO at two successful software companies, an M&A investment banker, and a management consultant with Accenture and Braxton Associates.

In this episode we discuss:

01:17 Why seed investors grown over the last decade

04:35 What Series B and C funds are in for with the influx of capital into earlier stages

06:41 Concerns with the current trends

08:10 How the flood of capital misallocates funds to secondary players and real estate

11:18 Recruiting competition in this market

14:53 How Seed and A series has evolved in the last few years

16:16 The YC effect on startups and investors

19:03 How the concentration of follow-on deals can distort funds

21:05 What is the metric that startups should aim for to attract investors

23:01 Should seed investors evolve in later later stage

26:11 The right way to evolve to keep your LPs

27:34 Why start a new firm

30:53 How the pandemic has affirmed his investment thesis

32:09 What the Catapult pitch was to LPs

34:17 Advice to emerging managers raising their first fund

38:11 The ingredients for creating a successful tech ecosystem

41:57 How remote is affecting new tech ecosystem

44:04 The long term vision for Catapult

Books Jonathan recommends:Meditation by Marcus AureliusSkin In The Game Akim TalebThe Messy Middle: Finding Your Way Through the Hardest and Most Crucial Part of Any Bold Venture by Scott Belsky

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