Blog articles

Universal Access and Choice

A VC - September 24, 2020 - 5:29am

Our current investing thesis at USV is about expanding access to knowledge, wellness, and capital. We believe that these are core human needs and that opening up access to them is both good for society and also good business. Our approach to these challenges is centered on lowering the costs of these services and increasing competition to provide them.

Often society’s answer to providing universal access is to grant a monopoly. Look at cable services in the US. We granted local franchise monopolies in return for a commitment to build out the market and serve everyone. Look at our K12 system in the US. Everyone can go to school for free but you have to go to the school in your town, even if it’s much worse than the school in the next town. Look at Medicare in the US. Everyone over 65 can get Medicare. But everyone gets the same coverage even if they have vastly different medical needs.

These efforts are all great successes. They have provided needed services to the vast majority of society. But they are monopolies. To see them any other way is wrong.

I strongly believe in equity for all humans, but I also believe that choice is incredibly important. It keeps everyone honest. It keeps costs in check. And it is central to ensuring equity for everyone.

I started thinking about this during a debate with my kids and their friends this summer about making college education free for everyone. I wondered whether that would just entrench the current ridiculously expensive model of college education in the US. And whether there might be a better way of making sure everyone can access a high quality higher education experience.

It is tempting to say “we should standardize on this and agree that we will all pay for it and make it available to everyone.” How can you argue with that?

And yet we know that approach leads to systems that don’t change, don’t adapt, cost too much, fail us, and frustrate us.

This is the reason I am so drawn to the idea of a universal basic income. I can’t honestly understand how we would structure it, how we make it sustainable, and how we actually all agree to do it. But the idea of spending our money ensuring that everyone has the means to access the essential human needs instead of trying to provide these services makes a lot of sense to me. Imagine if we stop providing these services and use all of that money to give people to ability to pay for them.


USV TEAM POSTS:

Nick Grossman — Oct 2, 2020
USV Algorand Transparency Statement, Q3 2020

Rebecca Kaden — Oct 1, 2020
Sora

Categories: Blog articles

Priorities

A VC - September 23, 2020 - 5:10am

I am in the middle of a week of back to back to back to back all day meetings. Which means I am not responsive on email, which means I am not getting anything done, which means I can’t be easily reached. Which means I am stressed.

In times like this, I like to remind myself of my priorities. What matters most?

For me, I like this line of f words which does not include the one I want to use when I feel like this

Categories: Blog articles

Stablecoin Adoption Revisited

A VC - September 22, 2020 - 4:38am

I saw that the SEC and the OCC issued guidance on fiat backed stablecoins yesterday. Better late than never. Because fiat backed stablecoins are seeing significant adoption this year.

I wrote a post about stablecoin adoption in June in which I said this:

I was perusing the crypto markets today and noticed that Tether, the grandfather of all stablecoins, is approaching a $10bn market cap, making it the third most valuable crypto asset after Bitcoin and Ethereum.

I also noticed that USDC, the US Dollar stablecoin that Circle and our portfolio company Coinbase are behind, is approaching a $1bn market cap.

https://avc.com/2020/06/stablecoin-adoption/

Well, today those numbers are up by 50% and 150% respectively, as you can see on Coinbase:

I heard about a transaction that closed last week in which the buyer sent millions of USDC to the sellers’ wallet.

Instead of wire instructions, scan a QR code and hit send.

This is the future my friends.


USV TEAM POSTS:

Nick Grossman — Oct 2, 2020
USV Algorand Transparency Statement, Q3 2020

Rebecca Kaden — Oct 1, 2020
Sora

Categories: Blog articles

Rebuilding NYC

A VC - September 21, 2020 - 3:47am

The Gotham Gal and I spent a good part of saturday walking around NYC. At one point, we walked through the massive and amazing Chelsea Piers complex and saw this plaque:

Think about that. In one four year period, the New York Public Library, Grand Central, the subway, the Queensboro and Manhattan bridges, the fire hydrant system, electrical street lights, firehouses, schoolbuildings, and 51 piers, including the Chelsea Piers, were built.

That right there is a recipe to get NYC back on its feet once this pandemic is over. We can and should build our way out of this downturn.

There is no shortage of things to build in NYC. We need more housing, particularly affordable lower and middle-income housing. We need more transit. I am a fan of light rail, like the proposed BQX, throughout the outer boroughs. We need fiber to every block in NYC, not just the wealthy neighborhoods. We can build zero carbon buildings out of mass timber and reduce our carbon footprint. These are just a few examples of things we can and should build in NYC.

Building can be financed with bonds. Building puts people to work. Building makes our lives better. Let’s do it NYC.


USV TEAM POSTS:

Nick Grossman — Oct 2, 2020
USV Algorand Transparency Statement, Q3 2020

Rebecca Kaden — Oct 1, 2020
Sora

Albert Wenger — Sep 24, 2020
Fear is the Mind-Killer

Categories: Blog articles

Funding Friday: Dear Frontline

A VC - September 18, 2020 - 4:22am

I backed this project today to make large scale public art projects honoring frontline workers.

Frontline workers have been and continue to be the heroes of this pandemic. They are out there delivering our packages, stocking our stores, caring for sick people, etc, etc. I really like the idea of honoring them.


USV TEAM POSTS:

Rebecca Kaden — Oct 1, 2020
Sora

Albert Wenger — Sep 24, 2020
Fear is the Mind-Killer

Nick Grossman — Sep 23, 2020
No Wasted Footsteps

Categories: Blog articles

Mobile App Stores and Crypto

A VC - September 17, 2020 - 4:03am

I have written extensively on this blog over the last decade and a half about the significant negative consequences that the two large mobile operating systems have on distribution of software. I am strongly opposed to the monopolies that Apple and Google have over mobile apps that run on iOS and Android.

I am rooting for Epic/Fortnite in their battle with Apple over the 30% tax that Apple charges developers for distribution in their app store. But more than the tax, what bothers me about these monopolies is the innovation tax they impose on the broad tech sector with their terms of service/rules.

There is no better place to see that than crypto, the next big wave in computing (after web and mobile). There are a number of reasons that decentralized crypto apps (dapps) have not gone mainstream, but certainly one of them is that the Apple and Google app stores don’t allow a number of important features that decentralized apps require.

The founder and CEO of our portfolio company Coinbase, Brian Armstrong, explained this well in a tweetstorm last week:

He ended with this tweet:

Recently Apple announced a way for developers to suggest updates to the App Store policies. Our team is planning to submit a formal request for Apple to allow its users to earn crypto and see a list of decentralized finance apps. We'll keep you updated on what we hear back.

— Brian Armstrong (@brian_armstrong) September 11, 2020

Coinbase, Epic, and Spotify are not alone in their struggles with Apple and Google. They are simply large enough and protected enough to go public with their struggles. The truth is every developer that distributes software through these two app stores struggles with them.

In what world does it makes sense for two large and powerful companies to completely control software distribution on mobile phones? In no world does it make sense. It must stop.


USV TEAM POSTS:

Rebecca Kaden — Oct 1, 2020
Sora

Albert Wenger — Sep 24, 2020
Fear is the Mind-Killer

Nick Grossman — Sep 23, 2020
No Wasted Footsteps

Categories: Blog articles

Circulate Networking Events

A VC - September 15, 2020 - 4:27am

My friend and former colleague Charlie O’Donnell created a new kind of networking event for the moment we are in. These are virtual networking events designed to “include diverse perspectives in the innovation community.” They are called Circulate.

These are curated discussions, meaning you sign up to participate and the right group is selected to attend.

These industry-specific events will bring together a who’s who of accomplished and influential professionals as well as the most promising and most curious people from underrepresented communities that represent the future of these spaces.

http://www.brooklynbridge.vc/circulate

The next three events are shown here:

If you are interested in participating in a Circulate Event, pls sign up here. There are a few remaining spots open for the event Thursday night on Education.


USV TEAM POSTS:

Albert Wenger — Sep 24, 2020
Fear is the Mind-Killer

Nick Grossman — Sep 23, 2020
No Wasted Footsteps

Categories: Blog articles

Home Sweet Home

A VC - September 14, 2020 - 4:29am

We have been back in NYC for about a week after being away for the entire pandemic. We were in LA when the pandemic hit and then spent the summer on the east end of Long Island.

Like everyone, we have read the horror stories of NYC being a wasteland of homelessness, crime, shuttered storefronts, filthy streets, and more. These stories occupy the front page of the NY Post every day and cannot be avoided.

While we have not ventured into every borough and neighborhood, we have been in downtown Manhattan and North Brooklyn, and what we have found is almost the exact opposite of what is being reported.

New Yorkers are out and about, wearing masks, keeping their distance, and enjoying our city very much. Fall is the best season in NYC and New Yorkers are taking advantage of it. My daughter and I biked in Prospect Park yesterday like we do most Sunday mornings and it felt as busy as any Sunday morning in my memory.

The Gotham Gal and I have been going out to dinner at our favorite restaurants in lower manhattan, sitting outside, and enjoying the experience. The walks to and from dinner through lower manhattan are amazing, the streets are bustling and NYC feels very much alive.

It is true that the streets are filthier. It reminds me of NYC in the 80s and 90s when we first fell in love with this place. It is also true that many storefronts are empty, a continuation of something that has been going on in NYC for the last decade and has been accelerated by the pandemic.

I am sure there are parts of the city that are not doing so well. I’ve heard that midtown is empty and facing challenges. I know that the neighborhood around the USV office in Flatiron is not as vibrant as it usually is. And I am sure that there are challenges in the neediest neighborhoods where the pandemic hit hardest and the economy is the most challenging. I am not saying that NYC is doing great.

What I am saying is the demise of NYC seems to have been greatly exaggerated by the media and others. The NYC that we are experiencing is showing its resilience and makes me very confident that it will once again get back up from the punch it just took and start swinging again.


USV TEAM POSTS:

Albert Wenger — Sep 24, 2020
Fear is the Mind-Killer

Nick Grossman — Sep 23, 2020
No Wasted Footsteps

Categories: Blog articles

Funding Friday: Attack Surface Audiobook

A VC - September 11, 2020 - 7:18am

The author Cory Doctorow is out with his third book in the Little Brother series. called Attack Surface, and is crowdfunding the audio book to keep it out of the Amazon/Audible ecosystem. I backed the project this week.


USV TEAM POSTS:

Albert Wenger — Sep 24, 2020
Fear is the Mind-Killer

Nick Grossman — Sep 23, 2020
No Wasted Footsteps

Categories: Blog articles

My “Zoom Room” Keyboard and Trackpad Setup

A VC - September 10, 2020 - 5:31am

I’ve written about the power of having a really great setup for doing long video meetings. I call it my “zoom room” because it rhymes. I use Google Meet and a bunch of other video services regularly in my Zoom Room so it’s not so much about the video service I use.

One of the challenges of using a computer (in my case a Mac Mini) from a couch vs a desk is the keyboard and pointing device setup.

My partner Nick suggested this trick and I use it in the office and at home. I buy an Apple Magic Keyboard and an Apple Magic Trackpad and then I snap them together with this piece of plastic called the MagicBridge.

It looks like this:

I find this works really well and if you are putting together a similar setup, I highly recommend it.


USV TEAM POSTS:

Nick Grossman — Sep 23, 2020
No Wasted Footsteps

Albert Wenger — Sep 21, 2020
Fighting the Climate Crisis is the Most Pro-Progress Program

Rebecca Kaden — Sep 18, 2020
Outschool’s Series B

Categories: Blog articles

Bolster Your Management Team And Board

A VC - September 9, 2020 - 9:53am

I have had the great pleasure of working with Matt Blumberg and the senior leadership team of USV’s former portfolio company Return Path (which was sold in 2019) for much of the last twenty years. Matt and many members of his leadership team got the band back together early this year and started a new company called Bolster in partnership with Silicon Valley Bank and the early-stage VC firm High Alpha. A few months later, USV joined that investor group along with our friends at Costanoa.

Matt is a great CEO and has even written a book about leading and growing a company called Startup CEO. Their new company Bolster is all about scaling and building a great management team for your startup. The Bolster team believes that scaling a high growth company means that you need to adapt, grow, and supplement your management team continuously along the way. And a big part of doing that is accessing “fractional talent” which means people that don’t work for your company full-time and permanently. All of this is outlined in the Bolster Founding Manifesto which explains why they started this company.

Fractional talent can be a fantastic independent board member, fractional talent can be a CFO mentor for your VP Finance that you want to grow into a great CFO, fractional talent can be a VP Product that can cover for your VP Product while they are on family leave, fractional talent can be a part time Chief Revenue Officer that you want to “date before you get married”, fractional talent can be a part time Head Of Insights that will allow you to understand if you need a full-time Head Of Insights. I could go on and on because there is no end in sight for the various ways a CEO can leverage fractional talent to make their company and their management team better.

Bolster came out of stealth and into a beta period today and is opening up its marketplace to companies that want to access fractional talent and to executives who want to work at high growth companies in interim, fractional, advisory, or board roles. Bolster also will allow venture capital firms and startup investors to participate in its platform as super users. If you are any of the above and want to engage with the Bolster network, you can sign up here. The full marketplace will launch soon.

We have already introduced Bolster to a bunch of USV portfolio companies and the enthusiasm for this model is really high. I love the idea of USV investing in a company that can help our portfolio companies do things better. We have done that before with Twilio, MongoDB, Carta, Sift, and a host of other companies. It’s a double whammy and it pays off in so many ways.


USV TEAM POSTS:

Albert Wenger — Sep 21, 2020
Fighting the Climate Crisis is the Most Pro-Progress Program

Rebecca Kaden — Sep 18, 2020
Outschool’s Series B

Categories: Blog articles

Go, set, get ready for your mark!

Beyond Money - September 7, 2020 - 11:25pm

The dystopian world of George Orwell’s, 1984, and Aldus Huxley’s, Brave New World, has been creeping up on us for a very long time. Now it’s coming on at a gallop and seems bound to cross the finish line in just a few short strides. Its pounding hooves shake the earth as they grind into dust truth, privacy, human rights, and all that humans hold sacred. The heat and stench from the monsters fiery breath give fair warning that it means to consume whatever stands in its way. Like the temptation of Jesus by Satan, it promises us the world, but at the price of our very souls.
Read the full article here or on Medium.

Categories: Blog articles

Honoring Labor

A VC - September 7, 2020 - 4:45am

Something that bugs me about our tax code in the US is that we tax labor more than capital.

If you make $100,000 of gains on your purchase of Tesla stock you pay 15% of those gains to the IRS.

But if, instead, you earned that $100k of income as a school teacher, you would pay 22-24% of that income to the IRS (depending on if you are married and filing jointly or single).

This tax policy values capital over labor and seems wrong to me.

I think it would be better policy to lower the income tax rate and raise the capital gains rate to something like 20% so that all income is taxed equally no matter how it is achieved and so they the net impact on revenues is neutral.

It’s fine to have a federal holiday called Labor Day to recognize the contributions from working people but an even more powerful gesture would be to stop taxing their work more than your stock market gains.


USV TEAM POSTS:

Albert Wenger — Sep 21, 2020
Fighting the Climate Crisis is the Most Pro-Progress Program

Rebecca Kaden — Sep 18, 2020
Outschool’s Series B

Categories: Blog articles

Funding Friday: Insider Art

A VC - September 4, 2020 - 4:58am

The comic book community on Kickstarter is so great. This project that I backed today is a great example of the creativity that they express in every project they do.


USV TEAM POSTS:

Rebecca Kaden — Sep 18, 2020
Outschool’s Series B

Categories: Blog articles

A Landmark Event in Exchange Alternatives

Beyond Money - September 3, 2020 - 9:23am

Greetings,

This is a heads up to inform you of an important upcoming virtual event in which I will be a featured presenter. It is the annual convention of the International Reciprocal Trade Association (IRTA), the premier organization for the commercial trade exchange industry and a leading force for monetary and financial innovation.  

The theme of this year’s convention is Navigating the Future, something that is becoming increasingly problematic for businesses and individuals alike, especially in the wake of the massive economic disruptions of the past several months. But every crisis brings with it opportunities, both for good and for ill, and we will need to choose wisely.

The presenter lineup is the most diverse and interesting to date, and brings together knowledgeable experts representing all aspects of the exchange revolution, including commercial, grassroots, for-profit, non-profit, and technologies like crypto currencies and blockchain.

The convention will convene virtually over three days, September 23rd-25th, 2020, for four hours each day. You can see the entire list of presenters and the full program schedule at the convention website: https://irta.pathable.co/

My interactive session, titled “Get Ready to Play in the Butterfly Economy,” is scheduled for Thursday, Sept. 24th at 1:45 PM Eastern time (10:45 AM, Pacific and Arizona time).

Here are some convention highlights:
Michael Terpin, the “Godfather of Crypto & Blockchain” will be the Keynote Speaker!

Other presenters will include:

  •  Giuseppe Literra, Founder of Sardex & Local Pay, Sardinia, Italy
  • Will Ruddick, social entrepreneur and founder of the Grassroots Economics Foundation
  • Dr. Lee Oi Kum, SME Visionary, Singapore & Malaysia
  • Caroline Macdonald, COO, BBX, Artamon. Australia 
  • Dariusz Brzozowiec, Co-Author, University Research Paper on Economic Security of Regions During the Covid-19 Period in Poland.
  • And, of course, yours truly.

Because of the key role that the exchange of value plays in the lives of every person on Earth, and in light of the evident failures of existing systems of money, banking and finance, anyone can benefit from participation in this IRTA convention. Don’t miss it!

Ticket prices are extremely reasonable and are available on Eventbrite at: 
https://www.eventbrite.com/e/irta-2020-virtual-convention-tickets-117110644089?aff=affiliate1

Hoping to see you there,
Thomas

Categories: Blog articles

Some Thoughts On SPACs

A VC - September 3, 2020 - 5:57am

As many of you know, Special Purpose Acquisition Companies (SPACs) are all the rage on wall street right now. SPACs are publicly traded “shell companies” that raise capital in an IPO process and then use that capital to merge with a privately held business.

SPACs have been around for at least thirty years and I have always thought of them as a “liquidity path of last resort” for our portfolio companies. The thinking was that if you could not go public in a traditional IPO, and if you could not find a traditional M&A buyer, then you would consider a SPAC.

But my thinking on SPACs has changed in this latest SPAC frenzy. I now see them as part of the continued “assault” on the traditional IPO process and largely a good thing.

For most of my career as a VC, the IPO has been the holy grail. Our very best portfolio companies would be offered an opportunity to go public by the top investment banks on wall street. And I have been involved in several dozen IPOs in my career.

The terms of an IPO are fairly locked down and are largely a great business for the top wall street banks and their buy side clients. I don’t take as much offense to this situation as others in the VC business have. I have viewed it as a mutually beneficial relationship between the top banks, VC firms, and the founders and CEOs who lead our portfolio companies.

However, in the last few years, competition has emerged for IPOs. On the left has come direct listings. And on the right, we have SPACs. Now founders and CEOs and Boards have a plethora of options for moving from a privately held business to a publicly held business.

Competition and choice is good. That is deeply held belief of mine across all aspects of life and business. And so the deluge of SPAC money coming to market right now is a good thing for the founders and CEOs who lead our portfolio companies. It offers them a wider array of options for going public than they had before. I am certain that will be a good thing for the tech sector and the VC sector.

All of that said, I do think SPACs have positives and negatives relative to IPOs and Direct Listings. What is right for your company will depend on the circumstances you find yourself in, including whether or not you need to raise primary capital, whether or not you need a lot of secondary liquidity, whether or not your “story” will be exciting to public market investors right out of the gate, how quickly you need to transact, and a host of other factors.

It is also the case that a number of VC firms and growth investors are raising their own SPACs. That too reflects the changing dynamics of the investment business and how fund managers like USV access capital and deploy it. I have always been a traditionalist when it comes to raising capital and deploying it. I like the small VC firm model, a close and long standing relationship with our investors (called LPs), and the rhythm of raising funds and sending the money back again and again. But I appreciate that others don’t see things that way and they may be on to something important with the VC SPAC model. We will see. I like that people are experimenting with the model. It will be revealing to all of us in time.


USV TEAM POSTS:

Hanel Baveja — Sep 10, 2020
Mental Healthcare 3.0 Part 2

Categories: Blog articles

Mental Healthcare 3.0

A VC - September 2, 2020 - 4:14am

My colleague Hanel wrote an important post on USV.com yesterday. It looks at mental healthcare solutions and compares them to what has happened in online learning in the last decade. USV invests in both wellness and learning and we believe that the way learning has evolved can teach us about where healthcare can go. Hanel’s post is in keeping with those beliefs.

I particularly like this chart which lays out how mental health solutions have evolved over the last decade and where they may go in the next one:

If you want to understand that chart better and understand our thinking on where mental healthcare solutions can go, please read Hanel’s post.


USV TEAM POSTS:

Hanel Baveja — Sep 10, 2020
Mental Healthcare 3.0 Part 2

Categories: Blog articles

Better Residential Internet In Manhattan

A VC - September 1, 2020 - 5:37am

Our portfolio company Pilot Fiber, which provides the best fiber internet to businesses in NYC, has teamed up with a national telecom provider to offer residential fiber internet in Manhattan.

Here’s the way they describe it on their landing page:

Pilot has teamed up with a no-BS, national telecom company (trust us, you know them) to bring gigabit fiber to apartments, condos, and brownstones across Manhattan. We provide the super fast, reliable infrastructure—they hook residents up with a customer-obsessed home internet experience. 

If you live in Manhattan and want better fiber internet, go here and leave your name and contact info and get on the list.


USV TEAM POSTS:

Hanel Baveja — Sep 10, 2020
Mental Healthcare 3.0 Part 2

Categories: Blog articles

Some Email Stats

A VC - August 31, 2020 - 7:47am

I was looking at my Feedblitz dashboard this morning. Feedblitz powers the daily email for this blog.

These are all of the emails/blog posts I have done this month:

As you can see the open rate hovers between a low of 33% (Ghost Pacer) and a high of 45% (Subscription Agreements).

The unsubscribe rate ranges from 0.02% to 0.075% (on my birthday!).

I suspect the click data is not instrumented properly because I can’t imagine that nobody clicks on any links in the posts. But since I am not trying to generate clicks, I don’t really care too much about that.

I don’t view AVC as an email newsletter. I view it as a blog. But it is both and this data shows that lots of people get it that way and enjoy it. That’s great.


USV TEAM POSTS:

Hanel Baveja — Sep 10, 2020
Mental Healthcare 3.0 Part 2

Categories: Blog articles

Funding Friday: Isolated On The Road

A VC - August 28, 2020 - 9:08am

I backed a bunch of projects this morning on Kickstarter and this one really stuck with me. I like supporting young creators who are putting their work out there and seeking funding for it. And I also like the idea of documenting this pandemic in photos so we can remember it when its in the rear view mirror.


USV TEAM POSTS:

Hanel Baveja — Sep 10, 2020
Mental Healthcare 3.0 Part 2

Categories: Blog articles
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