We’ve put up a post on the Foundry Group site about a new theme of ours we are calling Distribution. We’ve been investing in this theme for a while but have continued to formulate exactly how we think about it.

I’ve talked about our thematic approach to investing many times in the past.  Every now and then it feels like it’s worth a quick post on our current themes. They are:

Human Computer Interaction: The way humans interact with computers 20 years from now will make the way we interact with them today look silly. Sample companies include Oblong, Organic Motion, and Fitbit.

Glue: Computers love to talk to one another. The amount of “computer to computer interaction” is increasing at a dramatic rate. There’s a software layer that “glues” this together. Sample companies including Gnip and Standing Cloud.

Digital Life: We believe that people own their digital assets and should be able to access them anytime from anywhere. Sample companies include Cloud Engines and Memeo.

Protocol: Many protocols – both formal and informal ones – support extensive software ecosystems. We’ve been investing in protocols like SMTP, RSS, XML, and SMS for years and expect to continue doing this. Sample companies include SendGrid and Urban Airship.

Distribution: Giant existing online markets can be completely disrupted by new distribution methods like Facebook, Twitter, Mobile, and User-Generated Content. Sample companies include Zynga, Topspin, StockTwits, and Cheezburger.

We’ve got one additional theme that we’ll be talking about shortly. We’ve decided to split our Glue theme into two different themes as we’ve realized a particular pattern in our investment dynamics around this theme. Look for another post on this shortly.

We got tired of Google having all the fun so we put up a new drawing of us on the Foundry Group home page.

Google also did a nice job with the Mystery Machine in the background.

Happy Halloween from Brad “Not your Mummy” Feld, Seth “Franken-Levine”, Ryan “El Diablo” McIntyre, and Jason “Count” Mendelson.

I’m at Newark Airport waiting for my plane to take me to Quebec for the Quebec City Conference where I’m being interviewed at the end of the day by Rob Cox of Reuters Breakingviews.  Yesterday Rob and I had a short call so he could get to know me a little better.

As he was probing me about Foundry Group and what makes us tick, we started talking about what we refer to as “deeply held beliefs.”  In my first company (Feld Technologies) we referred to these as “precepts” As we were talking through them, I realized that they defined us, and how we work, extremely well.

For example:

We will never raise a fund larger than $225 million. We just raised our second fund.  It was exactly the same size as our first fund.  Assuming we are successful, our next fund, which we expect to raise in three or four years, will be $225 million.

We will never add anyone to the team.  I have three partners (Seth Levine, Jason Mendelson, and Ryan McIntyre). We’ve worked together for a decade.  We’ve committed to each other to work together as partners “until we are done investing as VCs.”  We work extraordinarily well together and have no interest in ever introducing someone new into the mix.

Entrepreneurs want to work directly with us, not through junior people. The manifestation of this deeply held belief is that we don’t have principals, associates, or analysts.

We all work on the same things.  While we each have different strengths and weaknesses, we only invest in areas and companies that all four of us have expertise and affinity for.

We have plenty of other deeply held beliefs but these should give you a feel for how we think about it.  It’ll be interesting to see how the interview goes today at the conference and if these come up – if I end up on a long riff about it I imagine another blog post on this topic may be forthcoming.

At Foundry Group, we often talk about our thematic approach to investing.  Steve Bell from StartupTrek did a nice job of capturing my perspective in under eight minutes.

I have 2,143 lawyer jokes queued up.  Here’s a good one:

The devil visited a lawyer’s office and made him an offer. "I can arrange some things for you, " the devil said. "I’ll increase your income five-fold. Your partners will love you; your clients will respect you; you’ll have four months of vacation each year and live to be a hundred. All I require in return is that your wife’s soul, your children’s souls, and their children’s souls rot in hell for eternity."  The lawyer thought for a moment. "What’s the catch?" he asked.

Now some of my good friends are lawyers and several of my very best friends are ex-lawyers.  You probably know one of them – my partner at Foundry Group – Jason Mendelson.  When Jason started his blog, he made the wise choice of starting a series titled Law Firm 2.0.  His first post – Why Start-up Lawyers Frustrate Me – pissed off all of his lawyer friends, generated 54 comments, and was reprinted all over the place.  Not a bad start for a blog.

He continued posting about Law Firm 2.0.  One day he was approached by some interesting folks at a company called FirstDocs who shared a lot of similar ideas.  You can read about it more in Jason’s post Our Investment in Law Firm 2.0.  The outcome, as you might expect, is that we closed an investment in FirstDocs at the end of last year.

Now, we usually do not invest in companies aimed at vertical markets.  However, we make exceptions when we have extremely deep domain knowledge and expertise.  In addition, we view having past success as a bonus, such as our previous experience in the legal vertical market with Stratify (which Iron Mountain acquired in 2007.) 

A lawyer died and arrived at the pearly gates. To his dismay, there were thousands of people ahead of him in line to see St. Peter. But, to his surprise, St. Peter left his desk at the gate and came down the long line to where the lawyer was standing. St. Peter greeted him warmly. Then St. Peter and one of his assistants took the lawyer by the hands and guided him up to the front of the line into a comfortable chair by his desk. The lawyer said, "I don’t mind all this attention, but what makes me so special?" St. Peter replied, "Well, I’ve added up all the hours for which you billed your clients, and by my calculation you must be about 193 years old!" (ahajokes)

I look forward to seeing Jason, Dan Gaffney, and the team at FirstDocs increase the efficiency of lawyers.