Venture capitalist Bill Bryant is back in Seattle, and he’s got some money to toss around to hard-charging entrepreneurs who want to change the world.
DFJ’s Bryant moved to London last year, taking in Europe’s bubbling startup scene and exposing his family to the wonders of England’s capital city. An early employee at Visio, Netbot and Qpass who joined the venture capital ranks in the 90s, Bryant called his 14-month long London sabbatical the “best family decision ever.”
But now Bryant is back in Seattle, and he’s on the prowl for new startup companies. At DFJ, he’s also been moved to full partner, which means he becomes one of the only venture capitalists in Seattle representing a large Silicon Valley firm. That should be good news for Seattle entrepreneurs, who’ve lamented in the past how challenging it is to raise financing in the Pacific Northwest.
An early backer of Chef, The Clymb, Z2 and others, Bryant is now investing out of DFJ’s $325 million 11th fund. With six partners in the fund, that means each has about $50 million at their disposal. Over the next three years, Bryant sees an opportunity for DFJ to pick up the investment pace in the Northwest.
“We want to support Seattle entrepreneurs as best as we can,” he says.
And what’s the biggest change Bryant has noticed since returning to Seattle?
“Construction and traffic,” he says. “The growth is just stunning. It is mind-blowing, really.”
Here’s more from our conversation with Bryant, with the veteran venture capitalist discussing everything from the European startup scene to where Seattle’s startup community drops the ball to why he decided to stay in Seattle over Silicon Valley.
GeekWire: What’s the European startup scene like right now?
Bryant: “It’s super exciting. I got to go to a couple of the startup hubs. First of all, you start with London. There are 12,000 startups in London. Imagine all of Belltown down to Pioneer Square just filled with startups. That’s what you see around London in what they call Shoreditch and Old Street — and Silicon Roundabout what they are terming it. You just have blocks and blocks of software companies that are getting started. They are small still, but lots of activity. Berlin is another amazing startup hub. A lot of activity, more consumerish.”
GeekWire: Having lived in Europe now, how do you think it is going to frame how you do venture investing?
Bryant: “You get a deeper appreciation of a global, worldwide market. If you are a London-based startup, you are thinking about Germany and Italy and the entire European continent. But you are also primarily focused on the U.S. market. So, they are global in orientation from the start.”
GeekWire: Does the lack of a global orientation hurt Seattle startups?
Bryant: “It is not a detriment. They are probably 18-24 months behind us in terms of technology adoption. So, if you are thinking about future growth plans, you have to plant people on the ground. One of the things I was able to do is get DFJ companies better situated in the European market.”
GeekWire: What was the reaction in London when you told them you were an entrepreneur and venture capitalist from Seattle?
Bryant: “The good news, from a Seattle perspective, is that when you say Seattle, they know it now. They are not saying: ‘Is that Washington, D.C.?’ If you are in technology, you know about Amazon and Microsoft and Expedia and the other significant companies like that. I think we have a worldwide brand now as a technology community.”
GeekWire: Where do you see the venture capital market right now? Is it overheating? Are folks taking a break?
Bryant: “Overall, it is fantastic. Startups are culturally the norm, and young talented people are thinking about startups out of college. If they join an Amazon or Microsoft, they are thinking about how do I best position myself to do a startup. It’s part of what we are all about today. It is orders of magnitude easier to get a company started today than it was 5 years ago, 10 years ago, 15 years ago. Orders of magnitude easier. So, if you take sort of a longer-term view, there has never been a better time to be an entrepreneur. What I worry about is Seattle losing out in a comparative sense to other markets. New York City as an example. New York City was not on anyone’s radar a decade ago, and now it is the second most important venture market out there.”
GeekWire: Where is Seattle’s startup ecosystem weak in your view?
Bryant: “I’ve got the vantage point of seeing what is happening in the Bay Area and contrasting that to here. One thing that the Bay Area has is this highly evolved ecosystem around micro-VCs, super angels and AngelList-type things, accelerators and Y Combinators of the world. We track probably 20 different micro-VC funds in terms of their activity, because really it is deal flow for us. We are not trying to do a $500,000 or $1.2 million seed financing. We are not good at that, and we don’t pay enough attention to those opportunities, and we don’t support those types of companies. Certainly, in the last year, outside of Founder’s Co-op and TechStars continued evolution, there has not been that pool of capital to help support the early-stage companies in Seattle, like there is in the Bay Area. That is something that we continue to struggle with over the last decade. Between the indigenous funds and the funds that are prepared to come up to Seattle from the Bay Area — if a company deserves to get a series A, they will get it here in town…. Where we have gaps in the funding world, is how do raise $500,000 to $2 million here? That’s a struggle, and that piece of the market has not evolved in the same way as the Bay Area has, or London. London probably has a dozen funds that are sub-$100 million, maybe sub-$50 million. But they are filling in that important gap between “friends and family” — which can only take a company so far — and enough commercial traction that an institutional venture capitalist will come into that deal.”
GeekWire: Doesn’t Silicon Valley’s culture of job-hopping and chasing the next hot thing make it tougher for startups to take root, build culture and find success?
Bryant: “You’d think so. But what counterbalances all of that is access to capital. If you are not well established or don’t have connection points to super angels and what not, like water, you are going to go downhill and you will go find where the capital is plentiful. And that is in the Bay Area.”
GeekWire: What does Seattle need to jumpstart things on the capital side of the fence?
Bryant: “What would it mean to this community to have — say $75 million of capital — that is going to be invested in startups, say $250,000 to $1 million a pop? That’s a lot of startups. That’s potentially 50 startups. That, to me, is the key to unlocking this whole thing is having access to the first $500,000 or $1 million. And DFJ doesn’t do that. It is literally like three $25 million funds — that’s what Seattle needs. Or two $25 million funds, and one $50 million fund.”
GeekWire: What’s getting you interested from a VC standpoint these days?
Bryant: “I am not thematic in terms of what things I am trying to find. I am trying to find the best entrepreneurs in the Seattle area, and get excited about whatever they are excited about, and then find out whether we are the right partner for that opportunity. I don’t have a thesis that I am trying to find a company to fill a white space in our portfolio. I am just trying to find the very best emerging opportunities, whatever spaces they are.”
GeekWire: With the new fund, did DFJ ask you to move to Silicon Valley?
Bryant: “They did, but I am committed to being here and my family is here. There is no reason to move. Plus, down there I would be a small fish in a very big pond. And here I’ve got more access to the startup community then down in the Bay Area. No plans to migrate down…. I am going to try to focus my investment attention here.”
GeekWire: Why did DFJ buy into you being in Seattle?
Bryant: “We’ve done well here. We have a major stake in Redfin, and we are excited about that company. We think that could be a public company and an enduring company in the next few years. Chef is on its way to becoming a very important company in the software infrastucture space. We’ve had a public company offering in Nanostring. We’ve had a couple smaller exits. Mpire. We were involved in Alpental Technologies, and we were a small investor in Clipboard…. There have been some great opportunities here, and the partners said if we have a dedicated presence in Seattle, we could potentially see another one or two opportunities for the fund.”