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Mementos

A VC - 6 hours 13 min ago

I keep little things that remind me of events over my career in venture capital. And I have been doing that for most of those thirty plus years. I keep them on a bookshelf I have in my office at USV.

It started with the lucite “tombstones” that bankers would make up when a deal closed. I started collecting them in the late 80s and had them on my bookshelf until recently. I finally got rid of them. Over time, I moved onto more interesting things and started putting them on the bookshelf.

I moved offices at USV this fall and I had to put my bookshelf back together. I did that on Saturday afternoon this past weekend.

The new configuration looks like this:

The third shelf has my collection of useless consumer electronic devices that were a big deal at one time. I have a Apple Newton there, a first generation Blackberry pager style device, and a whole lot more.

I have a bunch of family photos and things my kids made for me over the years. The peace sign painting on the left of the third shelf was made by my daughter when she was ten. I love it.

I put my old Mac desktop on the right corner of the second shelf. I plan to put some digital art on there but have not yet gotten to that.

It took me about three and a half hours to put everything back on the bookshelf on saturday. I had to wipe stuff down to get the dust off. Dusting off memories, literally.

There are a few gems that I had forgotten about. The lighter that Jerry and Dan brought back from Beijing when they did the diligence on Sina.com in the late 90s. The matchbox Porsches that Mark Pincus sent me when we exited Freeloader. The “move to NYC” booklet that Rob Kalin made to convince engineers to leave Silicon Valley and move to the greatest city in the world and work for Etsy. The Dick Costolo mask (partially hidden on the upper left) that the entire Feedburner board put on before he walked back in for exec session. I chuckle every time I look at that one.

I have a ton of stuff that did not make the cut this time. Including all of the lucites. I can’t throw them out so they will collect dust in a closet somewhere and drive the Gotham Gal crazy.

Memories are important. A career of memories is a blessing. And I like to live with mine. It reminds me why I do this work and why I love it so much.


USV TEAM POSTS:

Bethany Crystal — November 12, 2018
Everybody’s doing it: A short treatise on social “tugs”

Bethany Crystal — November 10, 2018
Making time for what you want

Categories: Blog articles

What Happens When A Founder Is Fully Vested?

A VC - November 11, 2018 - 4:51am

Let’s say you are the founder and CEO of a startup and you have now been at it for four years. The company is doing great, you’ve raised several rounds of financing, you have a product in the market that is solving a real problem, you have a bunch of customers, you have a growing team, and things are stressful but largely great.

And you realize that you are now fully vested on your founder’s stock which means if you were to leave the company tomorrow, you get to keep all of it. What do you do about that?

This is a common question I hear from founders. They ask me what is standard in this situation. And I tell them that not only is there no standard answer, that this is one of the most emotionally charged issues to come between founders and their investors and boards and companies.

This situation also exists for other founders who are not the CEO, and the issues are very similar, but for the purposes of keeping this post as simple as possible, I am going to focus on the founder/CEO role.

Here are some, but not all, of the issues that come into play in thinking about this:

1/ If a founder/CEO were to leave their company after they become fully vested on their founder’s stock, the company would have to go out and hire a new CEO and that new CEO would get an equity grant that would be between 2.5% and 7.5% of the Company, depending on the value of the business. So one could certainly argue that the founder CEO ought to get similarly compensated.

2/ But that argument about how a new CEO should be compensated essentially puts on the table the question of whether the founder CEO is actually the best person to run the Company right now or if there is someone better suited to do that who could be recruited for a new market equity grant. It is often not in everyone’s best interests to have that conversation.

3/ Many founder CEOs four years in still own a lot of their companies. A typical range would be between 10% and 40% depending on if there are co-founders and how much capital had to be raised in the early years and at what valuations. For most situations, an equity grant that would be made to a new CEO is actually a relatively small percentage of the overall equity ownership of a founder CEO and in the context of that, it is not as valuable to the founder CEO as many other things.

4/ However, the founder CEO is subject to additional dilution in subsequent rounds so a new grant would at least partially offset future dilution and that is quite attractive to founder CEOs.

5/ One of the most valuable things to a founder CEO is having a large unissued equity pool from which to hire talent into their company and any allocation of that pool to the founder CEO reduces that asset.

6/ It is generally a good practice to have all executives vesting into some equity compensation. It standardizes the executive compensation program and aligns incentives.

7/ Refresh grants for executives are not usually equal to their sign-on grants. They are usually some percentage of the sign-on grant. So the same should be true of a founder CEO getting a refresh except that they never got a sign-on grant.

8/ Investors bet on the appreciation of the equity they already own not the issuance of new equity. A founder is aligned with the investors when they too are focused on making the equity they already own more valuable.

9/ When founders get diluted below double-digit ownership, they begin to see themselves as employees, not owners and that is bad for the company, the team, and the investors. For some founders, they start to feel that way at below 20% or 15%.

10/ It is hardly ever the case that what happens after a founder is completely vested is negotiated ahead of time, during the various rounds of financings, and priced in by the investors. If a founder was to pre-negotiate a new “market grant” for themselves once they are fully vested, and that was included in the size of the option pool that is set aside and baked into the pre-money valuation, investors could model that future dilution and build that into their valuation models and price that into a round. But nobody does that because founders want to maximize valuation in the financing rounds and investors assume that the founders will be happy with their initial grant or will not be around to earn it. Both parties either naively or purposefully kick the can down the road until the issue rears its head and then the emotions come out.

So what happens in practice?

It depends entirely on the situation at hand.

If the founder CEO owns a large percentage of the business, a new grant is rarely made because the value of it pales in comparison to the annual value that their founder’s equity is increasing organically.

If the founder CEO has been massively diluted and owns a small percentage of the business, a new grant is often made.

If the business is performing very well, the likelihood of a new grant is higher.

If the business is performing poorly, the introduction of the idea of a new grant can be very destabilizing and can actually precipitate a larger conversation about who should be running the company.

A common area for compromise is a new grant to the Founder CEO that is some percentage of what a “market” grant to a new CEO would be and that percentage ranges from 20% to 50% depending on the situation. The less a founder owns of the company, the higher the percentage will be and the more a founder owns, the less that percentage will be. If a Founder owns more than a quarter of the business, this is almost never done. I certainly have never seen it done for founders who own more than a quarter of the business.

I have two suggestions for how entrepreneurs should handle this issue.

The first suggestion is that you might want to raise this issue with all of your investors before you take money from them, and understand how they feel about this issue and what their expectations are so that you know that ahead of time. Do not wait until the moment to find that out.

The second is that if you wait to raise this issue once you are fully vested, do it carefully and delicately. If it is seen as a demand, it will not go well. If it is seen as a discussion about what is in the best interests of the company, it will go better.

But most of all, remember that there is no “one size fits all” solution for this situation and that you and your board will have to figure it out on a case by case basis.


USV TEAM POSTS:

Bethany Crystal — November 12, 2018
Everybody’s doing it: A short treatise on social “tugs”

Bethany Crystal — November 10, 2018
Making time for what you want

Categories: Blog articles

Audio Of The Week: Turning Buildings Into Power Plants

A VC - November 10, 2018 - 6:04am

The Gotham Gal and I are investors in Blueprint Power, a company that helps landlords turn their buildings into mini power plants.

Robyn Beavers, the CEO of Blueprint, was on the Gotham Gal’s podcast this past week. They talked about how Robyn spent fifteen years working in the tech, energy, and real estate industries and took all of those work experiences and combined them into the idea for Blueprint. They also talk about how the changing supply and demand for energy is opening up new revenue streams for property owners and how Blueprint enables that. 


USV TEAM POSTS:

Bethany Crystal — November 12, 2018
Everybody’s doing it: A short treatise on social “tugs”

Bethany Crystal — November 10, 2018
Making time for what you want

Categories: Blog articles

Funding Friday: Women in STEM Holiday Cards

A VC - November 9, 2018 - 3:49am

I backed this project the minute I saw it.

Maybe you might like to back it too and get some holiday cards that might inspire the girls in your life to grow up and be like these amazing women.


USV TEAM POSTS:

Bethany Crystal — November 12, 2018
Everybody’s doing it: A short treatise on social “tugs”

Bethany Crystal — November 10, 2018
Making time for what you want

Categories: Blog articles

The Anchor Tenant

A VC - November 8, 2018 - 4:12am

Malls need anchor tenants. These are the stores that bring the folks to the mall so that they can discover all of the other amazing places to shop that sit between the big tenants.

Cities need the same. Particularly cities that are trying to develop new industries.

NYC’s tech sector has had an anchor tenant since the early 2000s in Google. I wrote a bit about this a few years ago and cited my partner Albert’s line that 111 8th Avenue (Google’s NYC HQ) is the “gift that Google gave NYC.

Big anchor tenants to a tech ecosystem provide all sorts of benefits but the biggest impacts are that they are both talent magnets (they attract people to relocate to the region) and talent sources (you can recruit from them).

Rumor has it that NYC is going to get a second anchor tenant as Long Island City is apparently a strong candidate to be one of two locations for Amazon’s HQ2. This would result in something like 25,000 new jobs for the NYC tech sector.

And another rumor is that Google is going to purchase the massive St John’s Terminal in the West Village and take its NYC workforce up to 20,000 over the next few years.

If both of these things happen, and that is still a big if, then NYC’s tech sector would have two large and well known anchor tenants. Together they would speak for about 10% of the jobs of the entire NYC tech sector.

I have had a front row seat to watch the emergence of the NYC tech sector over the last thirty years. It started as a trickle, then a stream, then a river, and it’s feeling more and more like an ocean.

NYC has responded well to the challenges of supporting a rapidly growing new industry with investments in infrastructure (real estate, connectivity, etc) and talent/education (CS4All, Cornell Tech, NYU Tandon, etc). Some areas have been lacking like transportation where we need better subways, better airports, and better regional rail systems.

I am hopeful that the continued growth of the NYC tech sector and the overall regional economy will give our elected officials and permanent bureaucracy the will and the resources to address these deficiencies and allow the NYC region to continue to develop into one of the most important tech sectors in the world. 


USV TEAM POSTS:

Bethany Crystal — November 12, 2018
Everybody’s doing it: A short treatise on social “tugs”

Bethany Crystal — November 10, 2018
Making time for what you want

Categories: Blog articles

TYWLS Digital Dance

A VC - November 7, 2018 - 5:45am

I blogged about this in the spring of 2017 but I am back with more.

TYWLS stands for The Young Women’s Leadership School, which is located in Astoria Queens in NYC. A few years ago the students decided to show off their computer science coding skills by making a “digital dance.” I posted the first one they did at the link above.

I just saw a video about their most recent digital dance and I just had to post it here.

I love this digital dance thing so much. It shows that coding skills can be used creatively. It shows that young women, particularly young women of color, can be coders and be proud of it. And it shows that technology is everywhere.

I have met some of these young women and they are impressive and I can’t wait to see what they are going to do when they grow up.


USV TEAM POSTS:

Bethany Crystal — November 12, 2018
Everybody’s doing it: A short treatise on social “tugs”

Bethany Crystal — November 10, 2018
Making time for what you want

Categories: Blog articles

If You Do Just One Thing Today, Vote

A VC - November 6, 2018 - 4:24am

Today is Election Day. Polls are open in every state in the US. It is time to stop the incessant back and forth, and do the one thing that counts – voting.

There is very little on my ballot here in NYC that matters much to me. The races are not close. The ballot referendums are not on issues that matter a ton to me. 

It would be easy for me to blow off voting today.

But I am not going to do that.

I plan to go to my polling place, stand in line for however long it takes, and fill out the ballot and submit my choices and be counted.

I hope everyone who reads this blog that lives in the US and is a citizen will do that today unless they have already done it via early voting.

I feel that voting is not only our right, it is our responsibility.

Let’s do it.


USV TEAM POSTS:

Bethany Crystal — November 12, 2018
Everybody’s doing it: A short treatise on social “tugs”

Bethany Crystal — November 10, 2018
Making time for what you want

Categories: Blog articles

Pixel 3 XL

A VC - November 5, 2018 - 4:29am

I spent a fair bit of time this weekend moving phones from the Pixel 2, which I have loved using, to the Pixel 3 XL.

It is drop dead simple to port over all of my accounts, data, and apps from one Pixel to another. Google has made that as easy as moving from one iPhone to another. You just connect both phones with the cable that comes in the Pixel 3 box and in about ten minutes the new phone has everything that was on the old phone.

But getting all of my security set up on a new phone (2FA, passwords, etc) and then logging into all of my apps (because I don’t like to log in with Google or Facebook or anyone else) is a massive pain. 

But at least I feel more secure.

After using the Pixel 3 XL for the last couple days, I cannot say that it is a meaningfully different experience than using the Pixel 2. Everyone says the camera is better. I have not noticed that yet but I am also not hugely particular about my phone camera.

One new feature of the Pixel 3 that I am using is wireless charging. I also bought the Pixel Charging Stand and when I get home, I just put the phone on the stand and it charges wirelessly. That’s nice. I used to charge my earlier Pixels wirelessly but they got rid of that in the recent models and now it is back. I like that.

I am excited about getting the Pixel 3 to screen my calls. That is another new feature it comes with. But I have not yet set that up. I will report back on how that is working for me.

The biggest disappointment for me is the lack of facial recognition on the Pixel 3. I like using my fingerprint to log into my phone, but I think I would like facial recognition even more. The iPhone has had that feature for a year or so now and I can’t understand why Google can’t match that.

Anyway, my big takeaway from spending a fair bit of my time this weekend moving from Pixel 2 to Pixel 3 is that not much changed for me. That’s fine. A new phone is always a nice thing to have. But I am not sure it was worth all of the setup time I put in this weekend. It’s pretty much the same phone I have had for the last year or so.


USV TEAM POSTS:

Bethany Crystal — November 12, 2018
Everybody’s doing it: A short treatise on social “tugs”

Bethany Crystal — November 10, 2018
Making time for what you want

Categories: Blog articles

Broken Syndicates

A VC - November 4, 2018 - 7:18am

One of the most challenging situations in startup/venture capital land is the broken syndicate. It is not a topic that is talked about much, but it is fairly common, particularly for companies that succeed in building a business but falter at achieving escape velocity.

A syndicate is a group of investors that come together to support a startup financially. They tend to be built over time. Some investors get involved with a company in its seed round. Others get involved in a company in the Series A round. And some get involved in the Series B round.

By the time a startup has raised three or four rounds of venture capital, it is likely to have built a syndicate of between three and five venture capital firms and other investors (corporate, strategic, individuals, family offices, etc).

The idea is that the syndicate supports the company financially until it no longer needs capital. That can happen via a sale of the company, an IPO, or achieving profitable operations.

And that is typically what happens in the best situations, when the company executes well and finds that happy financial chart that goes up and to the right with a steepening slope. In companies like that, the syndicate almost always sticks together and more investors clamor to get into it.

And then there is the company that never really figures out how to build a business. In those situations, everyone around the table, including the founders, figure out how to wind things down, either through a sale of the business, an acquihire, or a wind down. This happens all the time and is generally not a particularly painful process.

But there is a middle ground, where the team figures out how to build a business with customers, revenue, and lots of employees. But often the business stumbles and revenues flatten and losses pile up and more capital is needed, often a lot more than the existing syndicate is prepared for. This is when there are often management changes, founders depart, and there is a lot of drama.

And holding a syndicate together during the “stumble” is very hard. Some investors are managing huge funds and need exits that will produce hundreds of millions to their fund. When they see that a company will not do that, they often move on. Some investors have small funds and don’t have the capacity to fund a company round after round. Corporate and strategic investors can lose interest when a company stumbles and they no longer believe the business is strategic to them. 

Those are the “rational” reasons that syndicates break.

But there are other reasons. There is a fair bit of churn inside venture capital firms right now. Younger partners leave to start their own firms. Or are asked to leave because they are not producing the expected returns. When a partner who leads an investment inside a venture capital firm leaves, the investment is often “orphaned” and the other partners will pretend to support it but they really don’t want to and don’t.

Or even more upsetting is when a venture capital firm finds another company in the same sector that they like more and they lose interest in your company and stop supporting it.

All of these things happen to companies who stumble and they happen way more frequently than anyone talks about. It really doesn’t benefit anyone to go public with these situations. So they are worked out quietly.

Often broken syndicates lead to early exits, when the founder(s) and remaining investors realize that they are screwed and decide to find a home for the business before they run out of gas. Many times these exits are disappointing outcomes relative to the opportunity and they can make for fantastic acquisitions.

Another thing that happens with broken syndicates is the recapitalization. This is when the remaining investors reset the valuation in order to bring in new capital, either from their funds or ideally from fresh sources of capital. The losers in this situation are the early investors, founders, and investors who walked away. 

And sometimes what happens is the business shuts down, leaving people scratching their heads. Why did that company which had lots of customers, revenues, and employees suddenly close up shop? Well the answer is often that their syndicate broke and they could not put it back together.

At USV, we have worked through these stumbles and broken syndicates many times over the years. We often find ourselves in the position of trying to put Humpty Dumpty back together again. We have managed to do that many times. But we don’t manage to do it every time. 

It is incredibly difficult work, probably the hardest work we do in the venture capital business. And we often are asked why we bother.

We have found that we can make excellent returns when we stick to our conviction around an opportunity and work to restructure the team, the operations, and the syndicate (and the valuation). We also have found that we are rewarded reputationally in the market as investors who are supportive when times get tough. And we believe that it our job to support companies and the founders who create them.

We wish everyone in venture capital land saw things the way we do, but they do not. And that is the reality of the world we operate in. 

Founders need to understand all of this when they put their syndicates together. You should ask around about the investors who want to put money in your company. Look for companies that have stumbled and get to the people who know what happened in those situations and ask about how their investors behaved. That will tell you a lot.

The bottom line is that syndicates are fragile things. They break. And putting them back together is hard. So figure how to build one that is strong and will stay strong. The best way to do that is to under promise and over deliver on the business plan. But you can also do yourself a lot of good by finding resilient investors and getting them into your cap table. So do that too.


USV TEAM POSTS:

Bethany Crystal — November 12, 2018
Everybody’s doing it: A short treatise on social “tugs”

Bethany Crystal — November 10, 2018
Making time for what you want

Categories: Blog articles

Video Of The Week: Ethereum 2.0

A VC - November 3, 2018 - 3:47am

I just watched Vitalik Buterin’s keynote at Devcon 4 in Prague last week, on Halloween and on the tenth anniversary of Satoshi’s whitepaper.

In this keynote, Vitalik explains what has taken so long in getting from Ethereum 1.0 to Ethereum 2.0, what Ethereum 2.0 will include, and how we are going to get there.

It is a bit geeky, I can’t say that I understood everything, but if you own Ethereum, or if you believe that a scaled decentralized smart contract platform is important, and I can say yes to both of those emphatically, then this is worth watching. It is 30 mins long.


USV TEAM POSTS:

Bethany Crystal — November 12, 2018
Everybody’s doing it: A short treatise on social “tugs”

Bethany Crystal — November 10, 2018
Making time for what you want

Categories: Blog articles

Funding Friday: Misen Non Stick Pan

A VC - November 2, 2018 - 2:58am

Earlier this week, I talked about the D2C consumer products sector and how it has exploded over the last decade. Another contributor to that explosion are crowdfunding services like our portfolio company Kickstarter that allow entrepreneurs to launch their products and quickly get feedback and funding for them.

The Gotham Gal has made a number of these D2C investments and one of my favorite of hers is Misen, a D2C manufacturer of cooking products.

They launch their products on Kickstarter and then take them to market direct to consumer over the Internet, thereby taking out the cost of the retail channel which allows them to sell high end products at mid-level prices.

They have a product launch on Kickstarter right now called the Misen Non-Stick Pan. I backed it earlier this week and the project funding ends this weekend.


USV TEAM POSTS:

Bethany Crystal — November 10, 2018
Making time for what you want

Bethany Crystal — November 9, 2018
Want a mentor? Stop asking for one.

Categories: Blog articles

Dapper

A VC - November 1, 2018 - 4:44am

Back in March of this year, I wrote a post on the USV blog announcing our investment in Cryptokitties

A lot has happened since then. The company that made Cryptokitties is now called Dapper and it has raised a couple rounds of financing which will allow it to do a number of things:

  • Continue to invest in Cryptokitties, which remains a vibrant game experience and is the world’s most used consumer blockchain application outside of exchanges, with 3.2-million transactions and tens of millions of dollars transacted on the platform
  • Work with the world’s top entertainment brands to bring compelling brands, communities, and intellectual property to the blockchain. This means more game experiences, often in partnership with existing brands and game developers.
  • Build out the infrastructure to make blockchain games, including cryptogoods (ie NFTs), accessible to a mainstream audience.

It has been exciting to watch a small team that built Cryptokitties at a hackathon turn into a large and growing blockchain gaming company with global ambitions and a number of important launches on the horizon.

As I wrote in the USV post in March, we believe that “digital collectibles and all of the games they enable will be one of the first, if not the first, big consumer use cases for blockchain technologies.”

A lot is happening behind the scenes at Dapper, and at a number of other blockchain gaming companies, and increasingly in the legacy gaming sector, to give me confidence that 2019 will be a breakout year for blockchain gaming and I believe that our portfolio company Dapper will be leading the way.


USV TEAM POSTS:

Bethany Crystal — November 10, 2018
Making time for what you want

Bethany Crystal — November 9, 2018
Want a mentor? Stop asking for one.

Categories: Blog articles

D2CX

A VC - October 31, 2018 - 4:25am

One of the big trends in startup land over the last decade is consumer brands getting built direct to consumer (D2C) on highly efficient advertising channels like Google, Facebook, Instagram, Twitter, and YouTube. In these online channels, brands can test, measure, test, measure, test, measure, and then figure out what works and scale.

But these channels are getting more challenging as they have been optimized and scaled by thousands of brands over the last decade and the marketers in D2C land are increasingly looking around to see if there is anywhere else they can go.

Enter our portfolio company Simulmedia, which we invested in almost ten years ago to bring the transparency and efficiency of online advertising to television.

Simulmedia has launched an offering for these D2C companies to help them add television to their marketing mix. Television is hard for small companies. The initial buys are large and it is challenging to “test, measure, test, measure, test, measure” to optimize before you scale.

So Simulmedia has brought D2CX market. 

D2Cx is a marketplace featuring over 135 national TV networks, making it easy for direct-to-consumer brands to test TV advertising at low entry prices, learn what’s working, and scale.

You can start for as little as $50k and 100% of the cost of the media will go towards the purchase of media.

If you want to try out D2CX for your company/product, you can learn more here and sign up to try it out.


USV TEAM POSTS:

Bethany Crystal — November 9, 2018
Want a mentor? Stop asking for one.

Bethany Crystal — November 9, 2018
Protecting your tribe

Categories: Blog articles

Vertical Accelerators In NYC

A VC - October 30, 2018 - 3:43am

The Partnership For New York City operates some excellent “vertical” accelerators for companies that are getting started and are focused on serving industries with big footprints here in NYC.

Financial Services – FinTech Innovation Lab

Health Care – Digital Health Innovation Lab

Fashion – Fashion Tech Lab

Biotech – The BioAccelerate Prize

Transit – Transit Tech Lab

Both the Transit Tech Lab and the FinTech Innovation Lab are accepting applications right now for their next programs.

You can apply here:

Fintech Innovation Lab

Transit Tech Lab


USV TEAM POSTS:

Bethany Crystal — November 9, 2018
Protecting your tribe

Bethany Crystal — November 8, 2018
A big lesson from a little moment

Nick Grossman — November 7, 2018
The Dangers of Unstoppable Code

Categories: Blog articles

Creating Surplus

A VC - October 29, 2018 - 3:37am

Consumer surplus is the delta between what consumers expect to pay or are willing to pay for an item and what they actually have to pay given market dynamics. A good example of where we are generating a lot of consumer surplus is technology. I would be happy to pay for my email (and do) but I can get it for free from Gmail. A 49″ smart TV sells for about $300 on Amazon. A Samsung Chromebook is $200 on Amazon.

I like to think of all of this “found money” that consumers are getting from technology as the dividend we are getting from the technology revolution. It is also true that technology takes jobs out of the market, and adds them too, and that it may be a zero sum game or worse.

But the truth is many things have gotten a LOT less expensive over the last twenty years and that has made managing the household budget a fair bit easier.

My colleague Nick sent me this chart yesterday. I don’t know where he got it so I can’t identify the source.

What you see from the chart is that wages have increased about 70% over the last twenty years and many things, including housing, food, clothing, and most dramatically technology, have increased less, or have actually gone down in price, creating room/surplus in the household budget.

But not everything has gone down. Health care and education, most notably have increased dramatically.

So it is time to take aim at those sectors. We can do the same with education that we have done with other services. And we will. I feel that healthcare will be a harder lift, but I do think it can be tackled too.

In fact, our current thesis at USV compels us to go after these sectors. So we will.

I am excited about the potential to bring consumer surplus to these sectors and make more room in the household budget in doing so.


USV TEAM POSTS:

Bethany Crystal — November 8, 2018
A big lesson from a little moment

Nick Grossman — November 7, 2018
The Dangers of Unstoppable Code

Albert Wenger — November 7, 2018
World After Capital: UBI is Affordable

Categories: Blog articles

Women Rising

A VC - October 28, 2018 - 6:03am

This video is an advertisement in support of a group of women running for national office in these midterms.

I am compelled by this advertisement and these women. I am very hopeful that women like these will increasingly lead our congress and our country.


USV TEAM POSTS:

Nick Grossman — November 6, 2018
Internet Centrism

Nick Grossman — November 6, 2018
Making NYC Awesome

Nick Grossman — November 6, 2018
Backing into your network

Categories: Blog articles

Video Of The Week: The USDC Stablecoin

A VC - October 27, 2018 - 6:02am

Our portfolio company Coinbase announced this week that they will be adding the USDC Stablecoin to their various services in the coming weeks. 

This video below explains what the USDC stablecoin is and why it is important.


USV TEAM POSTS:

Bethany Crystal — November 5, 2018
Cheering on Marathon runners

Bethany Crystal — November 4, 2018
What we can learn from theatre’s performance reports

Categories: Blog articles

Funding Friday: Cryptopia

A VC - October 26, 2018 - 2:13am

Four years ago, filmmaker Torsten Hoffmann raised $AUS 17,000 on Kickstarter to make a documentary about Bitcoin called The End Of Money As We Know It. The film was released in July 2015 and I watched it and thought it was very good.

Torsten is back with a follow-up film project called Cryptopia and I backed it today. 


USV TEAM POSTS:

Bethany Crystal — November 4, 2018
What we can learn from theatre’s performance reports

Bethany Crystal — November 3, 2018
Befriending your neighbors

Categories: Blog articles

Free speech on the ropes

Beyond Money - October 25, 2018 - 10:18am

big-brother quotes

If liberty means anything at all, it means the right to tell people what they do not want to hear.     —George  Orwell

What the Arab world needs most is free expression.    —Jamal  Khashoggi

In his famous dystopian novel, 1984, George Orwell describes a world in which people’s actions and words are closely monitored in order to detect and punish thoughtcrime.  It is a world in which the ruling power structure has the means to preempt the expression of any idea or story that might challenge the official narrative of events and reality. Though a little late by Orwell’s reckoning, that world has all but arrived.

The development of the internet and the worldwide web brought, for a time, tremendous power to ordinary people to communicate and inform one another directly, bypassing the established news filters and centralized control of information. But in recent years, new corporate megaliths have emerged that have the power to shift control back in favor of “Big Brother.” We have become so dependent upon private corporate media platforms, like Facebook, Twitter, Google and YouTube, that they are able to manipulate our thoughts and behavior. To be banned from those channels means to effectively be banished from participation in political discourse. Corporate power on such a scale inevitably ends up being complicit with political oligarchies in controlling  public perceptions and defining “reality.” The hyped-up battle against “fake news” is really a battle against free speech.

Facebook teams up with the “Thought Police” to purge dissenting voices

Facebook’s purging of hundreds of pages and accounts in recent days has been widely reported. The purges have been done based on allegations of “spam,” and “inauthentic behavior,” or of providing  “Russian propaganda.” But there’s much more to it than that.

An article in the online journal, Global Research, describes the arrangement that Facebook made five months ago with the Atlantic Council to,  “prevent [their] service from being abused during elections.” And who is the Atlantic Council? According to the article, the Atlantic Council “is a think tank that is essentially funded by NATO, weapons manufacturers, Middle-Eastern oil-state monarchies, billionaires and different branches of the US military. In short, it has been described as being nothing less than NATO’s unofficial propaganda wing. The Atlantic Council doesn’t shy away from its political intents across the world, which can be seen solely by looking at who sits on its directors board – the crème de la crème when it comes to US neocons & war criminals: Henry Kissinger, Condoleezza Rice, Frank Carlucci, James A. Baker, R. George P. Shultz, James Woolsey, Leon Panetta, Colin Powell, Robert Gates, and many more.”

The article goes on to say that, “Many of the pages and accounts taken down have been political (often leftist), anti-war, independent journalists and media outlets that are known to go against the grain of mainstream media outlets.” You can read the complete article here.

So, what can we do? Let’s all dump Facebook, as well as Twitter, YouTube and all the other  massive, proprietary, data mining and propaganda platforms. I know that is not so easy to do, but alternatives do exist, and more of them are emerging every day. Here is a list of 6 Alternatives to Facebook. This article provides a list of 11 Facebook alternatives, and Fox News, surprisingly, provides a list of, Secure alternatives to Facebook, Instagram and Twitter. My search engine, DuckDuckGo, turns up several more.

One Facebook alternative that has gotten significant funding support of late is MeWe. A recent article reports that MeWe has thus far managed to raise $10 million to support its development. The article quotes MeWe founder and CEO, Mark Weinstein: “It is clear that the world wants a better social network that treats its member as customers to serve, not data to sell. We’ve built a social networking experience that has a remarkable suite of features people love and none of the BS. MeWe has no ads, no spyware, no content manipulation, no facial recognition, and no Russians (or anyone) paying to show you fake news.”

Well, that sounds promising, but time will tell how real it is.
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Jamal Khashoggi’s murder and the U.S./Saudi connection

The sensational case of the murder and dismemberment of Washington Post journalist, Jamal Khashoggi, inside the Saudi Consulate in Istanbul, underlines just how desperate the power elite is to control the narrative and manipulate our perceptions and beliefs. It would be a mistake to view this horrendous atrocity in isolation from the wider geopolitical propaganda campaign, much of it emanating from the U.S. government and their NATO and middle-eastern allies.

Two weeks after Khashoggi’s disappearance, The Washington Post published his last editorial, in which Khashoggi wrote:

“Arab governments have been given free rein to continue silencing the media at an increasing rate. There was a time when journalists believed the Internet would liberate information from the censorship and control associated with print media. But these governments, whose very existence relies on the control of information, have aggressively blocked the Internet. They have also arrested local reporters and pressured advertisers to harm the revenue of specific publications.”

The reaction of Donald Trump to this affair has been what we would expect. While paying lip service to justice and accountability, he immediately tried to provide cover for the Saudi regime by suggesting that the murder may have been the work of “rogue killers.” He also made it clear that he would not halt weapon sales to the Saudi government, a clear signal that money trumps “American values,” and belies the myth of the United States as champion of democracy and human rights.

But the cozy relationship between Saudi Arabia and the United States goes back way before Trump. Recall that, according to the official report on the 9/11 terror attacks on the World Trade Center and the Pentagon, 15 of the 19 terrorists were from Saudi Arabia. Why then did the United States attack Iraq and Afghanistan instead? It is also established fact that the Bush family and the bin Laden family were longtime business associates. Furthermore, according to this article by Cindy Rodríguez in the Denver Post, “While all flights were halted following the terrorist attacks, there was one exception made: The White House authorized planes to pick up 140 Saudi nationals, including 24 members of the bin Laden family, living in various cities in the U.S. to bring them back to Saudi Arabia, where they would be safe. They were never interrogated.”

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Categories: Blog articles

Engaging In Cryptonetworks

A VC - October 25, 2018 - 4:22am

Ever since the first cryptonetwork, Bitcoin, was created, investors have had the opportunity to earn returns by engaging in the network. In Bitcoin’s case, that was done by mining the network, effectively powering it.

As the sector has grown, investors have largely turned their attention to buying and holding cryptoassets, and not that many of us are actively engaging in them.

But that is likely going to change for several reasons.

First, in proof of stake networks, asset holders will want to stake their tokens and earn the rewards of doing that, or risk being diluted/inflated. Conversely, those who do stake will earn rewards that will feel a bit like collecting interest or dividends on a bond or stock.

This technique of turning an idle asset into an incoming producing asset by engaging in the network is part of the design of many cryptonetworks and investors are going to increasingly want to do these things (staking, validating, governing, etc) to earn the rewards of that engagement.

There is another aspect to this, outlined by Tushar Jain of Multicoin earlier this week on their blog.

Tushar points out that asset holders can act with their capital to help bootstrap the network by providing storage on the Filecoin network or transcoding on the LivePeer network or creating DAIs on the Maker network.

The good news for investors is that there are a whole bunch of entrepreneurs setting up shop right now to help us do these things without each and every one of us becoming super technical about the ins and outs of each of these cryptonetworks. We will see (and are seeing) staking as a service, nodes as a service, and the like. These third parties will be like the proxy companies are in the stock markets.

I expect the custodians, like our portfolio company Coinbase, to offer many of these services, either as the provider themselves or the gateway to the third party provider, thereby making it even easier for us to engage in these networks.

It’s an exciting time to be a cryptoinvestor. A host of new cryptonetworks are starting to go live. The next 18 months will see many dreams come to fruition and with those dreams will come demands on the investors to engage instead of just hold. I am looking forward to doing that.


USV TEAM POSTS:

Bethany Crystal — November 3, 2018
Befriending your neighbors

Bethany Crystal — November 2, 2018
Listening vs. sharing

Categories: Blog articles
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