Blog articles

Video Of The Week: AirCraft By Dronebase

A VC - 5 hours 52 min ago

I saw this video a drone enthusiast made on AirCraft and thought I’d share it with all of you this week:


USV TEAM POSTS:

Albert Wenger — November 17, 2017
Twitter’s Verified Mess

Bethany Marz Crystal — November 16, 2017
Battling Sexism and Harassment by Improving the Social Feedback Loop

Categories: Blog articles

Funding Friday: goTenna Puerto Rico Mesh

A VC - November 17, 2017 - 4:28am

Our portfolio company goTenna sent a bunch of their mesh networking devices to Puerto Rico in the wake of Hurricane Maria and a number of mesh networks lit up on the island.

This is what the goTenna network map looks like on the west side of the island now:

So they kicked off this crowdfunding campaign to purchase another 300 devices to get more mesh connectivity on the island.

I backed the project yesterday and it would be great if the AVC community could close this out with more donations today. The total raise is $15k.

If you want to learn more about goTenna, this Techcrunch story is a good place to start.

In a few short months the goTenna mesh device has built this network around the US:

I’ve been a fan of the idea of people-powered mesh networking for a long time. It is great to see it happening.


USV TEAM POSTS:

Albert Wenger — November 17, 2017
Twitter’s Verified Mess

Bethany Marz Crystal — November 16, 2017
Battling Sexism and Harassment by Improving the Social Feedback Loop

Categories: Blog articles

Drip

A VC - November 16, 2017 - 4:29am

Yesterday, our portfolio company Kickstarter announced that they had relaunched Drip, a subscription platform they acquired almost two years ago.

Perry Chen, Kickstarter’s founder and Chairman, wrote this blog post explaining what they are trying to do with Drip.

I would like to highlight a few quotes from that post:

Kickstarter is for projects, Drip is for people. – Kickstarter and Drip are different. Kickstarter is about funding a project. Drip is about supporting a person.

In recent years, we’ve seen the growing validation of subscriptions for serial online content creators — podcasters, YouTubers, bloggers — using tools like Flattr, Patreon, and Steady. It’s been great to see organizations build tools like these — the world is far from having too many tools for creators. But there remain large groups of artists and creators who don’t see subscriptions as fitting their creative practices. Our goal with the new Drip is to change that. – Drip is about expanding the market for subscription patronage beyond serial online content.

creators will be able to export their data and content, and we’ll even help creators securely transfer subscription and payments information to other subscription platforms. We believe creator independence means not being locked into a platform by design. – Subscriptions are different than campaigns, they are for the long run. Being able to leave one platform and join another is critical.

Every Drip begins with a founding membership period to help creators build momentum. The founding membership period is a way for creators to entice their fans, friends, and new audiences to jump in and build up their base of support. (This is not all-or-nothing like Kickstarter, but it does build on our experience that a strong call to action is essential.) – Kickstarter knows that having a call to action is key to generating early support for a project. Until now, that notion has not existed in the subscription market.

We also designed Drip to be both separate from but complementary to Kickstarter. One way we’ve done that is that existing Kickstarter users can use their stored account and payment details to easily support creators on Drip. Kickstarter and Drip are different services but they share user accounts and payment credentials. If you are logged into Kickstarter, you are logged into Drip.

We will operate Drip with the mission and values codified in Kickstarter’s Public Benefit Corporation charter, which mandate our commitment to helping people bring their creative projects to life, not putting profit first, and maintaining higher standards for our practices. We think these commitments are more important now than ever. – Kickstarter is a different kind of company, a Public Benefit Corporation. Their products and business practices reflect these values.

I backed about ten drips yesterday. It is about the simplest thing to do on the Internet if you already have a Kickstarter account.

If you are interested in doing the same, you can find some great Drips here.


USV TEAM POSTS:

Albert Wenger — November 17, 2017
Twitter’s Verified Mess

Bethany Marz Crystal — November 16, 2017
Battling Sexism and Harassment by Improving the Social Feedback Loop

Categories: Blog articles

Update On Stock Options/RSUs Issue

A VC - November 15, 2017 - 3:05am

I just saw this on my twitter:

The @NVCA has been working hard to make sure #innovation & #entrepreneurship are drivers of US growth!#TaxReform pic.twitter.com/q1Ez7EfbC7

— Phil Sanderson (@SanFranciscoVC) November 15, 2017

This means that the Senate has now made the tax reform bill a win for those who work in startups instead of a loss.

I’m thrilled and I want to thank all of you who called your elected officials and those in the Senate Finance Committee who clearly understand the importance of equity compensation to the startup model.


USV TEAM POSTS:

Albert Wenger — November 17, 2017
Twitter’s Verified Mess

Bethany Marz Crystal — November 16, 2017
Battling Sexism and Harassment by Improving the Social Feedback Loop

Categories: Blog articles

FemaleFounder.Org

A VC - November 14, 2017 - 6:00am

My partner Rebecca posted this to her Twitter yesterday:

Excited to band together with a group of women that I’ve learned so much from to help women starting the next generation of breakout businesses. Female founders we’re so ready for you! Apply here: https://t.co/hQkMiylfDf https://t.co/u2zkL8qDoz

— Rebecca Kaden (@rebeccak46) November 13, 2017

FemaleFounder.org is a group of women VC investors who are doing regular “office hours” to advise and mentor female founders.

As they say “A community of women helping women”

I know most of the women who are doing this and they are all great people, investors, and advisors.

If you are a woman getting started on your startup journey, check out FemaleFounder.org.

It’s a great initiative.


USV TEAM POSTS:

Albert Wenger — November 17, 2017
Twitter’s Verified Mess

Bethany Marz Crystal — November 16, 2017
Battling Sexism and Harassment by Improving the Social Feedback Loop

Categories: Blog articles

Don’t Tax Options And RSUs Upon Vesting!

A VC - November 13, 2017 - 3:56am

The current draft of the Senate Tax Reform Bill would tax stock options and RSUs upon vesting.

Currently, stock options are taxed upon exercise and RSUs are taxed upon release of the underlying shares.

This is a HUGE deal to everyone who works in companies that partially compensate their employees with these two equity instruments.

What this would mean is every month, when your equity compensation vests a little bit, you will owe taxes on it even though you can’t do anything with that equity compensation.

You can’t spend it, you can’t save it, you can’t invest it. Because you don’t have it yet.

Taxing equity compensation upon vesting makes no sense.

I have seen many employees leave companies and not exercise their vested stock options. It happens all of the time.

That should be a clear enough example to the lawmakers that vesting should not be a taxable event.

But, sadly, I don’t think this is really about what makes sense. It is about politics.

The US Senate, particularly the Republican leadership, needs to hear from you, the employees who will feel the pain of this change, that it is wrong.

Otherwise, I think this provision could become law.

And that would be the end of equity compensation in startups as we know it.

If this provision becomes law, startup and growth tech companies will not be able to offer equity compensation to their employees. We will see equity compensation replaced with cash compensation and the ability to share in the wealth creation at your employer will be taken away. This has profound implications for those who work in tech companies and equally profound implications for the competitiveness of the US tech sector.

So, what can we do about this?

First, we have to move fast. The tax reform bill is moving quickly with a goal of getting it done before year end.

This particular provision, which was in the House bill and was taken out last week, will be considered by the Senate as soon as TODAY.

So, please reach out to your Senators and let them know that they “must remove Section III(H)(1) from the Senate Tax Cuts And Jobs Act”.

The best way to do that is to call their office and speak to the staffer who handles tax reform for them.

Here’s a short explanation of how to do that.

Please do it today. This is really very important to everyone who works in tech.


USV TEAM POSTS:

Albert Wenger — November 17, 2017
Twitter’s Verified Mess

Bethany Marz Crystal — November 16, 2017
Battling Sexism and Harassment by Improving the Social Feedback Loop

Categories: Blog articles

Location, Location, Location

A VC - November 12, 2017 - 6:42am

Here are some “truisms” about startup investors and location that I’ve experienced and passed on over the years:

  • Startup investors prefer to invest locally
  • The younger the startup business, the more that is true
  • Your lead investor/board member is more likely to be a local investor than your passive/follower investors
  • The location preference is more pronounced with investors who are located in vibrant startup markets
  • The location preference fades as companies mature

Last week Techcrunch published some numbers on the issue of location and startup investing using Crunchbase data on 36,700 startup investment rounds they have tracked from Q1 2012 through October 2017.

So let’s see what the numbers say about these truisms.

Startup Investors Prefer To Invest Locally

This is true, over half of all investors in startups are in the same state. But it appears that the location preference is declining over time, maybe brought on by the significant improvements in videoconferencing and other communications technologies.

The Younger The Startup, The More There Is A Location Preference

This is true. 66% of angel investments come from in state investors whereas only 58% of VC investments come from in state investors.

Lead Investors Tend To Have A Stronger Location Preference Than Passive Investors

This does not appear to be true.

Location Preference Is More Pronounced In Vibrant Startup Markets

This is very true.

The Location Preference Fades As Companies Mature

This is very true.

At USV, about 25% of our investment activity is in NYC, 50% is rest of US, and 25% is outside of US. We are not completely location agnostic as we don’t invest very far away (South Asia, Asia, Middle East, Africa, etc) and we likely over-index on NYC vs the rest of the VC industry.

But the truth about being a startup investor, unless you are located in the bay area, is you have to go where the best opportunities are. That is particularly true if you are a thesis driven investor, as we are at USV.

So as much as I’d like to walk to my board meetings, that just isn’t reality. That said, I plan to walk to a board meeting on Tuesday.


USV TEAM POSTS:

Albert Wenger — November 17, 2017
Twitter’s Verified Mess

Bethany Marz Crystal — November 16, 2017
Battling Sexism and Harassment by Improving the Social Feedback Loop

Categories: Blog articles

Video Of The Week: Nurx

A VC - November 11, 2017 - 7:03am

Our portfolio company Nurx provides prescriptions via an app on your mobile phone.

The initial offerings are birth control and HIV prevention medications, but they will add other prescriptions in the future.

This news report talks about their launch in Texas this summer which was extremely successful.


USV TEAM POSTS:

Albert Wenger — November 17, 2017
Twitter’s Verified Mess

Bethany Marz Crystal — November 16, 2017
Battling Sexism and Harassment by Improving the Social Feedback Loop

Categories: Blog articles

Funding Friday: Reflex

A VC - November 10, 2017 - 4:24am

I just backed this project and I thought I’d share it with all of you:


USV TEAM POSTS:

Albert Wenger — November 17, 2017
Twitter’s Verified Mess

Bethany Marz Crystal — November 16, 2017
Battling Sexism and Harassment by Improving the Social Feedback Loop

Categories: Blog articles

Central Bank Interventions and the Looming Catastrophe

Beyond Money - November 9, 2017 - 11:21am

In this recent interview below, Dr. Paul Craig Roberts describes the “house of cards” that is today’s global regime of money, banking and finance. Since the financial crisis of 2008, the major central banks around the world—the Federal Reserve, the Bank of England, the European Central Bank, the Bank of Japan—have all been active in the securities markets, buying huge amounts of government and corporate bonds and shares of private companies, a process that is euphemistically called “quantitative easing.”

As Roberts points out, these actions are being taken to support the big banks. I agree, but it goes much deeper than that. The underlying objective is to preserve the global interest-based debt-money system which requires continual expansion if debt, an inherent systemic flaw which I call the “debt growth imperative.” The result of these market manipulations, of course, has been the inflation of market bubbles in bonds, stocks, and real estate, and the massive transfer of wealth into the hands of a small segment of the population.

Roberts does not mention it, but the recurrent waves of tax cuts for the rich likewise seem to be designed to keep these market bubbles pumped up. The wealthy class, for the most part, does not spend these windfall gains, they invest them in, you guessed it, bonds, stocks and real estate. If tax cuts were to go mainly to the lower and middle classes, what would they do with the money? They would surely spend much of it, which would stimulate consumption of consumer goods and restore the real economy, but much of it would go toward reducing the massive amounts of debt that these people carry and make it unnecessary for them to borrow even more. A system that requires perpetual expansion of debt cannot tolerate that.
Now, do you understand?

 


Categories: Blog articles

Carta

A VC - November 9, 2017 - 4:49am

Our portfolio company eShares changed their name to Carta this week.

Why?

For a bunch of reasons, but mainly because the opportunity has gotten a lot bigger than “shares”.

As founder/CEO Henry Ward points out in this post, the opportunity is to build the ownership graph:

If you drill far enough into the ownership graph, through the pensions and real-estate trusts and all the shared ownership vehicles, you eventually get to a person. You reach their retirement plan or savings account or option grant or even a simple title representing their ownership interest. That is how our society works. The leaf nodes of the ownership graph must be individual people.

This ownership graph is large and hard to quantify. We don’t know how many corporations, properties, investment vehicles, and partnerships exist in the world. But we do know if you mapped the entire graph your leaf nodes would eventually represent every person in the world. There are 7 billion people in the world. That is a lot of leaf nodes. Who knew the cap table market could be so big?

If you and/or your company uses eShares (now Carta) to track your ownership table, you likely understand this. Using Carta is transformative for all parties. And that is why it is growing as fast right now as any software company I have ever been involved with. And the TAM, it turns out, is massive.

A lot of our best investments at USV have gone this way. We invest early, when we like the product and the founder, and then over time the opportunity reveals itself to everyone (including the founder) to be a lot bigger than anyone thought. “Sharing what you had for lunch?”, “an API for text messages?”, “a search engine for jobs?”, “a Bitcoin wallet in the cloud?” and now we can add “cap table software?” to that list.


USV TEAM POSTS:

Albert Wenger — November 17, 2017
Twitter’s Verified Mess

Bethany Marz Crystal — November 16, 2017
Battling Sexism and Harassment by Improving the Social Feedback Loop

Categories: Blog articles

Quantitative Investing in Shampoo

A VC - November 8, 2017 - 4:42am

My partner Andy wrote a blog post on USV.com with this title today. I like the title so much that I want to feature the post on AVC today too.

I have been a skeptic about data-driven venture capital investing for a long time. However, I do think CPG is a sector where this could work very well.

Can a machine help you invest in shampoo? Coffee? Another consumer product?

Last week, the USV portfolio company CircleUp announced the closing and launch of CircleUp Growth Partners  – a $125 million fund that will use a quantitative machine learning approach to invest in early-stage consumer and retail brands.

We believe this is an important evolution towards using data technology to make investment decisions – a theme we at USV have invested in many times ranging from Lending Club to Funding Circle to Numerai. CircleUp Growth Partners is slightly different. The Fund’s thesis is that one can use machine learning to determine early-stage equity decisions in consumer companies. This machine learning platform, Helio, identifies and evaluates companies across billions of data points. The Fund is live right now – Helio recently analyzed 3,400 vitamin and supplement companies and flagged HUM Nutrition as being in the top 3% for brand score. This ultimately led the Fund to make one of its first investments in that company.

The provocative proposition is that a system like this can run these types of analyses at scale and pinpoint brands earlier and with more efficiency than traditional investors. Consumer investors historically have had to spend around 75% of their time sourcing deals manually. Helio is able to automate this entire sourcing process and provide data-driven insights to help companies grow.

Helio has also been applied to two other business lines – credit and marketplace.  CircleUp originally operated solely on a marketplace model but has recently launched a credit arm that provides working capital to consumer companies. These three business units all provide data back to the model, which in turn makes each better in its own domain. This is a data network effect – Helio is continually improving.

The focused industry of consumer goods should lend itself well to this approach; consumer packaged goods all share the same business model, and data proliferates across the industry.

Could data-driven investment models like that of Circle Up be extensible to sectors beyond consumer goods? It will be interesting to see how these approaches might affect capital formation more broadly, as data applications move to designing new financial products and services we have not yet even considered.


USV TEAM POSTS:

Albert Wenger — November 17, 2017
Twitter’s Verified Mess

Bethany Marz Crystal — November 16, 2017
Battling Sexism and Harassment by Improving the Social Feedback Loop

Categories: Blog articles

Election Day

A VC - November 7, 2017 - 4:40am

It’s election day and I’m going to stop by the polls this morning and vote.

It would be easy for me to skip the polls as there is not much at stake in NYC this year.

Mayor de Blasio is going to get re-elected fairly easily as he has no strong challengers.

The same is true of the other citywide officials and most city council members, including mine.

But I am going to vote in spite of all of that.

I think one of our biggest problems in our country is voter apathy.

So I am going to demonstrate against that by showing up and voting in an election with little to nothing at stake.


USV TEAM POSTS:

Albert Wenger — November 15, 2017
Uncertainty Wednesday: Sample Mean under Fat Tails (Cont’d)

Categories: Blog articles

Onename to Blockstack

A VC - November 6, 2017 - 4:11am

Our portfolio company Blockstack, which was the subject of a video I posted here last week, started out as Onename.

Onename is a distributed identity system, kind of like Facebook Auth, built on the blockchain.

I wrote about Onename a few times here on AVC back in 2014 and I suspect some of you registered onenames.

If you have a Onename that you like to use on the Internet, you have to import it to Blockstack before November 11th, or you will lose it.

To do that, you have to download and install Blockstack on your computer and then log into the Blockstack browser and import your Onename.

Instructions how to do all of that are here.

I like to use the same userid everywhere. So this sort of thing is important to me.

If it is important to you too, then I suggest you take the time to do all of that in the next week.


USV TEAM POSTS:

Albert Wenger — November 15, 2017
Uncertainty Wednesday: Sample Mean under Fat Tails (Cont’d)

Categories: Blog articles

Airpods and Android

A VC - November 5, 2017 - 10:47am

I wrote a post a month or so ago saying that I had fallen hard for Airpods while I was briefly using an old iPhone and was going to miss them when I moved back to Android.

A bunch of readers responded to me in the comments and via email that the Airpods would work just fine as Bluetooth headphones on my Pixel phone.

And they were right. I have been using the Airpods with my Pixel for a month now and they work great.

So if you are an Android user like me and like the idea of tiny wireless headphones in your ear without wires or bulk, you can absolutely get a pair.

Now if Apple would only make iMessage work on Android there would be no reason to use an iPhone

Categories: Blog articles

Thomas Greco’s Latest Interview

Beyond Money - November 4, 2017 - 9:00am

Here is my latest interview on Primo Nutmeg. Discussion topics include alternative currencies, credit, central banks, the Federal Reserve, Austrian economics, the gold standard, bitcoin, geopolitics, and the relationship between U.S. foreign policy and the global system of money and finance.


Categories: Blog articles

Video Of The Week: More AirCraft

A VC - November 4, 2017 - 4:45am

I’m excited about AirCraft, which I blogged about yesterday.

Here’s a short teaser that Dronebase put up on YouTube yesterday:


USV TEAM POSTS:

Albert Wenger — November 13, 2017
Call Your Senators to Preserve Equity Compensation for Startups

Categories: Blog articles

Feature Friday: AirCraft By Dronebase

A VC - November 3, 2017 - 10:30am

I hesitate to call this a feature, even though it is, as AirCraft is a way bigger deal than a new feature.

Our portfolio company Dronebase operates the largest drone pilot network in the world. Tens of thousands of pilots fly missions for Dronebase and the Dronebase mobile apps are used by most of these pilots to do these missions. Pilots connect their mobile phones to their drone consoles and the smartphone adds a lot of capability during the mission.

So what else can a smartphone do for a drone mission? Well it can add augmented reality.

AirCraft is the first augmented reality drone platform for commercial and recreational activities.

What AirCraft is, at the most fundamental level, is the ability for the drone to be a cursor in the sky.

AirCraft allows drone pilots to make something like this in the sky:

AirCraft is available in the Dronebase iPhone Pilot App today and will be available in the Dronebase Android app later this year.

If you want to build a virtual drone race course, you can do that with AirCraft.

If you want to build a flight plan for a drone pilot to do a regular survey of your radio tower, you can do that with AirCraft.

If you want to build a virtual city in the sky, you can do that with AirCraft.

The possibilities are endless, kind of like Minecraft in the sky.

So if you have a drone and the Dronebase iPhone app, you have AirCraft and you can get going on building things in the sky.

Categories: Blog articles

Token Summits in SF and NYC

A VC - November 2, 2017 - 2:24am

The Token Summit, run by AVC regulars William Mouyagar and Nick Tomaino, announced two more events in the coming months, Dec 5th 2017 in San Francisco and May 17 2018 in New York.

The first Token Summit was held in NYC at NYU last May, and sold out. Here’s a highlight reel from it.

Today, William and Nick have published the agenda for the San Francisco conference, and you can find it here. It is being held at the Mission Bay Conference Center at UCSF, in a hall that will fit 600 people.

Some of USV’s portfolio companies will be presenting, and I am sure William and Nick will have yet another successful event. If you want to learn about where the token economy is going, and network with the entrepreneurs and companies who are leading it, the Token Summit is a great place to do that.


USV TEAM POSTS:

Albert Wenger — November 10, 2017
Board Effectiveness Tip #5: Have a Lead Director

Categories: Blog articles

Fintech Innovation Lab

A VC - November 1, 2017 - 3:14am

I write this post every year because I think this is a great program.

Fintech Innovation Lab NYC is a business accelerator program that works with the largest financial services companies here in NYC to support emerging fintech companies and the founders who start them to get their companies off the ground.

This year, the lab is making a big push into insurance with a special track for entrepreneurs/companies that service the insurance market.

Here is the blurb they sent me this week to announce the kick off of their next program which will take place in the first half of 2018:

We’re looking for entrepreneurs developing disruptive, pioneering enterprise technologies for the financial services and insurance sectors. As part of the 12-week program co-founded by Accenture and the Partnership Fund for New York City, fintech companies selected by senior executives of the world’s leading financial services firms will receive mentorship that accelerates product and business development.

The participating financial institutions and insurance providers include: AB, AIG, Alight Solutions, Ally, Amalgamated Bank, American Express, AQR Capital Management, Bank of America, Barclays, BlackRock, BNY Mellon, Capital One, CIT Group, Citi, Credit Suisse, D.E. Shaw, Deutsche Bank, Fidelity Investments, Goldman Sachs, Guardian Life Insurance, JPMorgan Chase & Co., KeyBank, Marsh & McLennan, Mastercard, MetLife, Morgan Stanley, New York Life Insurance, Pitney Bowes, Rabobank, RBC Capital Markets, Scotiabank, Synchrony Financial, TIAA, The Hartford, UBS, U.S. Bank, Wells Fargo, XL Catlin and Zurich Insurance.

We are holding an information session on Wednesday, November 8, 2017 from 5:30 – 6:30 PM for any companies interested in learning more about the program. For additional information on the Lab, please have the companies contact us at info@fintechinnovationlab.com.


USV TEAM POSTS:

Bethany Marz Crystal — November 9, 2017
Leveraging Company Engagement Across the USV Network

Albert Wenger — November 8, 2017
Uncertainty Wednesday: Sample Mean under Fat Tails

Andy Weissman — November 8, 2017
Quantitative Investing in Shampoo

Categories: Blog articles
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