Upstart | Marissa Campise, venture capitalist, Venrock

The woman at the helm of some of tech's most hyped investments explains her philosophy on the market.
Written by Audrey Quinn, Contributor

In the spring of 2011, Marissa Campise's jump from one firm to another gathered some serious ink. Business Insider called her "The 32-Year-Old Rock Star VC Venrock Just Poached." CNN Money wrote a piece, "Why Marissa Campise left Greycroft for Venrock." Betabeat noted her move too, and All Things D summed up the hype by calling Venrock's aggressive hire a sign of the current funding frenzy.

This was the year of out-sized initial public offerings from Zynga, Groupon, LinkedIn, Zipcar and Pandora, as well as frenzied speculation about Facebook's imminent unveiling. A number of fresh consumer-facing startups had shown signs of growing up. And where some analysts saw market promise, others worried about high valuations of companies yet to prove a profit.

"We are certainly in another bubble," Matthew Cowan, co-founder of the tech investment firm Bridgescale Partners, told Bloomberg Business Week. But Campise herself denounced such proclamations to Bloomberg TV. "Aren't we too paranoid to be in a bubble to actually be in a bubble?" she asked the interviewer. She framed the brouhaha over her move to Venrock, following a reportedly generous promotion at Greycroft, as journalist hype.

Just over two years later, I met Campise at Venrock's midtown Manhattan branch. The hallway wall charts investments since Venrock's birth as the venture capital arm of the Rockefeller family in 1969, including Intel, Apple, 3Com, Gilead Sciences, Slideshare and AppNexus. Campise is one of 10 investors for the firm's $350 million energy, health care and information technology fund. Her large desk remains sparse -- a Macbook, water bottle, two books by one of her favorite authors, A.A. Milne, and a pair of lightweight trainers.

Since joining Venrock, Campise has worked on investments in Klout, the social media analytics company; sat on the board of investors at Slideshare, the presentation hosting service that has since been sold to LinkedIn; helped direct the fund toward the cloud storage company CTERA; seeded the men's apparel company Trumaker; and has an observer seat on the board of Dataminr, a real-time data information discovery company. She also observes on the board of a yet-to-be-unveiled mobile social product, which she hints at as "explosive."

"You may be catching me on an off day," she apologized from her desk. She was fresh from a dentist visit involving three shots of Novocaine. But Campise showed no signs of slowing as she led me out of the building and through crowded Midtown blocks in search of an elusive espresso bar. "We'll find it one way or another," she said, grinning.

I reminded her of that 2011 investment scene. Campise said she based her dismissal of tech-bubble proclamations on what she saw in the public markets at that time. For example, she said, "Apple was trading at 12 times earnings and Google at 15 times earnings."

She explained that a bubble is when an asset class is up today only because it was up yesterday. "If it were a bubble," she said, "everyone would be throwing money into stocks." But instead, she explained, in 2011 there had been 25 straight months trending toward money coming out of the market rather than people continuing to invest. "It wasn't the Wild West in the public markets," she clarified.

Despite a few hyped IPO's, the majority of 2011's buzz-driving tech companies were still privately funded. So it was private market venture capitalists, not the general public, who were putting their money on the line. "If you were in New York two years ago," she remembered, "it seemed like all these investments were getting done all the time. It was a bit wild. The valuations and the funding frenzy in the private market may have gotten out of control."

For the uninitiated, here's a primer on the stages of tech-industry financing: Seed investing typically funds startups in their idea phase. ("You're mostly looking at people and vision," Campise said, "people that see the world differently than we do.") Those seed investments, which are typically smaller and from private sources, picked up in 2011.

Series A refers to a company's first big round of venture funding -- it's the private stock sold to institutional investors. At this point, the company typically has a business model and solid evidence of its future potential.

After the increase in seed funding in 2011, the market slowed, Campise explained. "It's basically a matter of supply and demand," Campise said. "The number of companies that received seed investment went up significantly, but the number of Series A investors stayed the same for the most part. As a result, it may be harder for some companies to find Series A investments." By some accounts, a finite number of Series A investors lead to a Series A crunch in 2012.

"I read a lot about the Series A crunch," Campise said. "I don't have an opinion just yet. I haven't heard many horror stories just yet. I think that companies with great teams, great ideas and good data to support what they started will find funding."

Amid Midtown's lost tourists and bee-lining office workers, a coffee shop emerged and we headed inside. Campise noted the large window in back that offered a behind-the-scenes look into the active kitchen. "It's a very Vine-able opportunity," she noted. She says she's been using the video app to improve on how she captures her surroundings. "I have to step up my game," she added, smiling.

Campise said she sees the shift to mobile as one of the most noteworthy trends in the market now. She acknowledged buzz over social commerce: "Some people claim that social commerce lowered customer acquisition costs," she said, "because you found them on social media so they cost you nothing. And that it increased the lifetime value of your customers, that they stayed around spent more with you. But I don't know that the data has ever really proved that out." But she said the transition to mobile and data-focused businesses are high on her radar currently.

Campise focused on Series A funding at her prior position at Greycroft. At Venrock, she's investing in companies through their full life cycle, with a focus toward early investments. The new role puts her in front of a larger fund with larger outcome goals. "It's very different and calibrating is very different," she said, "because you do have to think about companies becoming large companies early on, which can be particularly difficult."

I asked how she's found her way in this new arena. She credited a wealth of mentors. "I'm still learning it," she said. "I think this business is an apprenticeship. I think you need white hair around you, experienced investors." She took a sip of her iced coffee and grimaced, reminded of her dental work.

Venrock has offices in New York City, Palo Alto and Cambridge, but Campise primarily works from the Manhattan branch. "We believe in New York, we double down in New York," she said with pride. She cited Venrock as one of the larger investment funds in the city.

But when asked to explain her own success in her field, Campise demurred. "I don't know if I'm good," she said. "The reality is with venture the average holding period is eight years. I've been in the business now four. So time will tell."

What she does know, she told me, is venture capital is about balancing risk and reward. And that's something she enjoys. "I've taken some risks in my life," she reflected, "and they've turned out pretty good."

She cited her VC career itself as a chance she took and saw to fruition. Her other example was more personal. "It was a risk for me to raise a kid as a single mom at 19," she said, "and that's turned out to be pretty rewarding."

But, she was quick to clarify, she sees startup founders as the bigger risk-takers in the VC world. "Every company that I've helped or backed has had tough times," she acknowledged. "Startups are hard. I have so much respect for the entrepreneurs who start companies, and in many companies sacrifice everything to start these companies." She nodded for emphasis, "Those are the real risk takers."

Photo: James Westman

This post was originally published on Smartplanet.com

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