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Microsoft Ventures Director James Maiocco
James Maiocco

SAN FRANCISCO–A quartet of venture capitalists spoke about funding new startups as a part of a panel discussion at today’s Launch Festival in San Francisco. The conversation inevitably turned to the challenges founders face when it comes to getting their companies additional funding past their seed round, best known as the “Series A crunch.”

According to James Maiocco, a Director at Microsoft Ventures, the crunch is real. But it might not be such a bad thing.

“If it’s truly fundable, then the market will fill the need,” Maiocco said.

DFJ Managing Director Josh Stein
Josh Stein

Josh Stein, a Managing Director at Draper Fisher Jurvetson, agreed. In his view, the narrowing of funding opportunities for more mature startups creates an ecosystem that promotes natural selection towards better companies.

“Companies that are solid companies are getting funded, and they’re getting funded in solid deals,” he said.

Moreover, Maiocco said that VC ecosystems overseas, especially in China and Israel, have been growing and maturing rapidly to help companies there get the funding they need to be successful.

But even with a growing VC ecosystem, there will always be companies left out in the cold, according to Zelkova Ventures co-founder Jay Levy. “Not everyone is always going to get funded, and not everyone is always going to be happy.”

In the Pacific Northwest, $503 million was invested in 45 deals during the fourth quarter. That compared to $332 million in 41 deals in the fourth quarter of 2012.


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