The Story of Balcony VC: Bridging the Gap Between Classic Venture and Modern Innovation

The Story of Balcony VC: Bridging the Gap Between Classic Venture and Modern Innovation

Sometimes the most impactful business journeys begin in unexpected places. For Axel Bichara, it started in the halls of MIT in 1987, where as a student he launched a venture-backed startup focused on mechanical CAD systems. In a recent episode of Category Visionaries, Axel shared how this early entrepreneurial experience shaped his vision for what would eventually become Balcony VC.

The Early Days “It was like the good old days of venture capital,” Axel recalls of his first startup experience. “We were very young students at MIT and with a vision to build a CAD system, mechanical CAD system.” The venture landscape was dramatically different then – “Venture was a tiny nichey industry, very few people doing it. $50 million was a large fund back in the day.”

What struck Axel most wasn’t just the funding, but the hands-on partnership approach of his investors. They “showed up with conviction, with real money, showed up for board meetings and helped us build a company.” This experience would prove formative, eventually inspiring him to transition to the investment side of the table.

The Evolution of an Industry After successfully selling his company in 1991, Axel watched as the venture capital industry underwent massive transformation. “A lot of what’s called venture isn’t really venture capital anymore,” he observes. “A lot of what we called growth equity back then is called venture today.”

This evolution created a gap in the market – one that would eventually inspire the creation of Balcony VC. The firm, which announced its official launch in April 2022 with a $100 million fund, aims to return to the fundamentals of classic venture capital.

The Balcony VC Approach “We lead pre-seed rounds, and there are actually very few people who do that,” Axel explains. The firm’s approach is distinctly hands-on: “go in with conviction and write half a million, $2 million check when one, two, or three founders first get started, we make up our minds independently, lead the round.”

The firm’s investment thesis centers on what they call “creative technologists” – “People who understand technology but who have the creativity to see into the future, 5-10 years into the future and leverage trends in society to a vision for a company and are able to articulate that.”

Building the Portfolio Since its launch, Balcony VC has made seven investments, including companies like Fiveflute, an engineering collaboration software company, SDAs in factory automation software, and Ibot, which provides rapid eye exam technology. Each investment reflects their focus on the intersection of technology and societal trends.

The Partnership Model Unlike many modern venture firms, Balcony VC emphasizes a true partnership approach. “We have four equal partners, two in Boston, two in San Francisco. We invest throughout North America, and every investment we make is actually a Balcony investment. It’s not any of the individuals’ investments,” Axel explains.

Looking to the Future As the venture industry navigates what Axel calls “the tail end of a boom that started in 2009,” Balcony VC sees opportunity in the return to fundamentals. “Things will continue to slow down in terms of valuations, deal making, pace, et cetera. We call it the tourists going away, both on the venture side and on the entrepreneurial side, and that’s a good thing.”

This environment, while challenging for some, creates opportunities for firms focused on true company building. As Axel puts it, “More focus on fundamentals of company building and actually a better environment for investors and entrepreneurs to build companies and execute.”

The future of venture capital, as Balcony VC sees it, isn’t about chasing the next unicorn or competing for Twitter fame. It’s about returning to the principles that made the industry successful in the first place: partnering with exceptional founders, focusing on large market opportunities, and having the patience to build sustainable businesses. In a world of venture tourists, Balcony VC is betting that this classic approach will prove more valuable than ever.