First Round Capital Competitive Analysis

As mentioned in my previous post, I will be publishing a series of profiles on potential competitors. I was recommended to start by writing a profile on seed-stage venture capital firm, First Round Capital.

First Round Capital is financially successful because they focus on being financially successful. The purpose of their funding model is to serve shareholders. The new economy we are building is made-up of businesses which do not exist to serve a few shareholders, rather, they exist to serve the needs of the people.

Competitor Profile

Name: First Round Capital

Market Share: $500 million

Target Market: Engineers, Technologists

How is my company different? My company focuses on providing support to those who are overlooked by firms like First Round Capital. The unemployed, those without tech skills, and everyone else who deserves to live a happy life. First Round provides great opportunity for their startups, but what impact are they having on humanity? My company is not concerned with finding the next big thing in technology. We are not concerned with ideas that lead to scalable companies which will provide the greatest financial return on our investment. We are focused on providing funding and support for businesses that solve social problems. Companies from First Round are motivated by money as the end goal. We are motivated by empathy and providing the services our fellow humans need which they are currently not getting

What are their strengths? First Round Capital seems to have a great model for turning out successful tech startups (200 companies according to their website). They have over a half billion dollars of capital to play with. They self-title themselves as the leader in the space. They can take risks which other firms without as much capital would never take. They attract the top talent from around the world.

What are their weaknesses? They are overlooking underserved populations (dropouts, graduates with degrees in the arts, non techies, etc) because they seem unprofitable to them.

How can you take market share away from their business? My goal is not to become a VC, but I do understand seed-stage capital is a necessary component in being able to see social enterprises flourish. An organization like First Round Capital could be an important component, but only if the types of companies that went through their program were different. Rather than take market share from them I would position myself as the company who prepares new social enterprises to apply for funding from First Round Capital.

How will they respond when you enter the market? The current structure of our economy is reinforced by powerful people like First Round Capital who invest as much as is necessary to keep things the way they are. In terms of their reaction, they will either ignore my model or begin to adjust their model in order to not lose customers. If we caused enough disruption to the point where customers who would have applied to First Round are now applying to us then First Round would be forced to approach us for partnership.

 

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