A VC

Syndicate content
Musings of a VC in NYC
Updated: 18 hours 41 min ago

How To Hire Executives

August 15, 2017 - 4:06am

Brian Armstrong, founder and CEO of our portfolio company Coinbase, writes a regular blog in which he talks about a bunch of things; Coinbase, things he has learned, the crypto market, and a bunch more. If you don’t follow Brian, you might want to.

Last week he laid out the entire process he uses to hire executives and it’s a really great post.

Here is the outline of the process:

  • Speak to subject matter experts [1–2 weeks]
  • Choose the hiring committee [1–2 days]
  • Draft the mission/outcomes/competencies (MOC) document [1–2 weeks]
  • Source candidates [2 weeks]
  • Build the relationship [1 month]
  • Evaluate candidates [1 month]
  • Close them [1 month]

If you plan to hire executives or are already doing it and would like to see how another CEO does it, I would suggest you go read Brian’s post.

One thing Brian leaves out, likely not intentionally, is the role of board members and investors in this process.

I have seen board members and investors play a valuable and highly engaged role in the “hiring committee” and most certainly in the closing process. I have done this for Brian a number of times and so have Micky Malka, Chris Dixon and Barry Schuler. We are very fortunate to have a great management team and Board at Coinbase and that makes a big difference in running an executive hiring process.

I have been an investor in Coinbase and have worked with Brian for almost five years now. I have watched him grow and develop as a CEO. He takes that very seriously and it shows. Putting down things like your hiring process is a great way to pass on to others what you have learned and get feedback too.

 

Categories: Blog articles

MBA Mondays

August 14, 2017 - 11:33am

For almost four years, from Jan 2010 to late 2013, I would write a column every Monday called MBA Mondays where I tried to cover the basics of a business education here at AVC.

There are roughly 200 posts in total that I wrote during the time this weekly series was active.

Since many regular readers have shown up since then and may not know about MBA Mondays, I thought I would let all the new readers know about it.

You can see the entire MBA Mondays archive here.

There is a lot of good stuff in there.

Categories: Blog articles

Founder Friendly

August 13, 2017 - 4:31am

Long time VC watcher, writer, and analyst Dan Primack suggested on Friday that the days of VCs trying to out “founder friendly” each other are now over.

It is an interesting observation and was worthy of a reply. The VC industry is highly competitive for the best opportunities and we certainly do try to ingratiate ourselves and our firms to the entrepreneurs who will decide who gets to invest in their companies and who does not. Being “founder friendly” is an important way to do that.

But there is another important participant in the VC/entrepreneur relationship and that is the Company the entrepreneur creates and all of its stakeholders; the employees, the customers, the suppliers, and even the community around the Company.

Having worked with entrepreneurs for over thirty years now, I have developed tremendous admiration for what they do and for the Companies they create. Entrepreneurs are a very special breed of people.

But there are times when interests diverge and what is best for the Company and it’s stakeholders may not be what an entrepreneur perceives to be in their own best interest. This creates a conflict situation and VCs are often caught in the middle of it.

I’ve been there many times and my mantra in those moments is “what is best for the Company?”. It has to be that way and, many times, when it is all over and done, the founder realized it was in fact best for them too.

Of course, reasonable people will disagree about what is best for a Company. That is what Boards are for. They are the bodies made up of reasonable people who can and should debate these issues and find resolution and make the hard decisions.

I reject the notion that being led by its founder is always what is best for a Company. It is often so, but certainly not always so.

Orthodoxy in thinking and believing is quite troublesome. There is no one way to do things and no single truth. You have to figure things out all the time based on facts and circumstances, based on a combination of experience and knowledge. If you do that well, you will get a lot right but never everything right.

I have heard from quite a few founders that they read the book Hatching Twitter and came away thinking that they would not want to work with me. That sucks for me but I don’t regret anything I did or said in the events that were described in that book.

You must try to make the right decisions for what is best for the Company and if that means being labeled unfriendly to founders, so be it.

Categories: Blog articles

Video Of The Week: Albert On Decentralization And The Knowledge Age

August 12, 2017 - 4:41am

My partner Albert gave this talk recently at The Blockstack Summit. He frames the crypto/blockchain movement in the context of a broader societal shift into the knowledge age.

Categories: Blog articles

SoundCloud

August 11, 2017 - 12:46pm

Internet treasures don’t die so easily and @SoundCloud is one of the most treasured parts of the Internet https://t.co/ciYyMwbVu1

— Fred Wilson (@fredwilson) August 11, 2017

I have spent much of the last four months working on this and was up most of the night last night finishing it, so I don’t have a lot of gas in the tank today.

But I do plan to write about all of this at some point, maybe soon, maybe not so soon.

It has been one of the most interesting and challenging projects I’ve worked on in my entire career.

And it could not have been for a better cause.

Categories: Blog articles

Work Market Acquires Onforce

August 10, 2017 - 10:59am

Our portfolio company Work Market announced today that they have acquired their competitor OnForce from its owner, The Adecco Group.

This combination makes Work Market the undisputed work automation leader in IT services sector, where both companies got their start.

Work Market also offers work automation services for many other verticals, but the IT services sector is very strategic as it has been using work automation software solutions long before other verticals.

Work Market describes the transaction in more detail here.

For those who haven’t read my many posts on Work Market over the years, work automation software allows companies to automate and scale their agile workforce, from W2 employees, contractors, staffing firms, and freelance/1099 workers.

We think this is the future of work and Work Market is powering it for many enterprises, large and small.

Categories: Blog articles

Was This About Me?

August 9, 2017 - 3:23am

I often get people asking if something I wrote was about them or their company.

I have a rule for myself.

I don’t write a post about a specific person or company without making it clear that the post is about that person or company.

There are times when I don’t want to name that person or company, but when something is about a someone or some company, I don’t hide that. I make it clear.

On the day I wrote the “Greed Isn’t Good” post, I got a lot of questions about who or what it was about.

I replied on Twitter:

As always a confluence of events and not just one thing

— Fred Wilson (@fredwilson) August 7, 2017

I do not send messages to people or companies via a post on my blog. If I want to tell someone something, I will do that privately.

Categories: Blog articles

A Public Record

August 8, 2017 - 4:54am

AVC has been going on for almost 14 years now. I write every day, mostly about tech and investing in startups and observations about entrepreneurs and entrepreneurship.

WordPress says I have posted 7,622 times. That is more than once a day but that is because I used to post multiple times a day. Now I can barely find the time to write once a day.

Anyway, posting your thoughts and investment ideas every day creates a public record.

That can be bad when you are consistently wrong about something, like I have been about Apple since Steve Jobs left the company.

But all in all, I would not have it any other way.

A few days ago, Founder Playbook posted a timeline of my writing on Bitcoin and Blockchain, stating that “Since 2011, Fred has been bullish, yet critical, on the crypto market.”

I have been a believer in Bitcoin, Blockchain, and Crypto since 2011 and my confidence in this macro investment thesis gets stronger every day.

And I will continue to critique the sector, calling it out when I see things like greed, infighting, or other issues that get in the way of its collective success.

One could do a similar lookback on my roughly decade long obsession with social media that led me to blogging and ended around the time I fell for crypto.

I tend to get obsessed about one thing and write a lot about it. Which creates a public record. You can’t hide from that, but then again blogging is the opposite of hiding.

Categories: Blog articles

Greed Isn’t Good

August 7, 2017 - 6:24am

The famous Gordon Gekko line that “greed is good” is bandied about quite often to explain why capitalism, and the pursuit of riches, is a positive thing for the economy, society, and the world at large.

Greed is not good. There is a fine line between the profit motive and greed.

I am a firm believer in the profit motive. It drives many of us to work hard, make new things that can move the world forward, and better our lives and the lives of our children, and others, through philanthropy.

But when the profit motive is taken to excess and you enter into the territory of greed, things go bad quickly.

We have seen this in the tech sector in many places, we have seen it in wall street, in real estate, and elsewhere. And we certainly are seeing it crop up in the crypto sector as well, particularly recently.

I like the concept of checks and balances. It is important to make sure to stay on the right side of the line between what is reasonable and what is excessive. Surrounding yourself with the right people, who have been around this issue a lot, can help a lot.

There are a lot of temptations out there when a lot of money is sloshing around. It is good to resist them.

Categories: Blog articles

Podcast Weekend: Gotham Gal On The Role Models Podcast

August 6, 2017 - 4:14am

My friend David reached out to me and suggested that I share this podcast with the AVC crowd.

In it, he and the Gotham Gal talk about her career and the lessons she learned from it over the years.

Categories: Blog articles

Audio Of The Week: Recovering From Failure

August 5, 2017 - 8:46am

In last week’s Positively Gotham Gal podcast, Christine Quinn, the former NYC mayoral front runner who got passed and beaten by Bill de Blasio, talks about dealing with failure and how to recover from it.

It’s a good listen:

Categories: Blog articles

Fun Friday: Summer Vacation

August 4, 2017 - 5:13am

It is that time of year that most of us take a week off and go somewhere to rest and relax.

I am on the East End of Long Island. Where do you plan to go for your summer vacation?


USV TEAM POSTS:

Albert Wenger — August 12, 2017
Preparing for Superintelligence: Living the Values of Humanism Today

Categories: Blog articles

A Range Not A Price

August 3, 2017 - 3:35am

Entrepreneurs often struggle with how to signal their valuation expectations to investors.

Investors rightly want to know what the entrepreneur’s price expectations are before investing significant time on the opportunity.

But entrepreneurs don’t want to negotiate against themselves and certainly don’t want to undervalue themselves.

So what I always recommend to the entrepreneurs we work with and, frankly, anyone who asks is to “give a range, not a price.”

Let’s say you are raising a Series A round and have an aspirational valuation in mind of $30mm pre-money, raising $6mm.

But you know that is an aggressive valuation and you may have to accept something materially less in order to get a deal done.

Then I would tell investors “we want to raise $4mm to $6mm and don’t want to dilute more than 20% including any increases to the pool.”

An investor could read that as you would accept $4mm at $16mm pre-money but you have signaled that $30mm post-money is where you are aiming.

And, because you said “don’t want to dilute more than 20%”, you have left some room for your aspirational valuation of $30mm pre-money in which $6mm would dilute the company roughly 17%.

Try this the next time you are asked for a valuation from an investor. It works well.


USV TEAM POSTS:

Albert Wenger — August 9, 2017
Uncertainty Wednesday: Risk Aversion (Jensen’s Inequality Cont’d)

Categories: Blog articles

Time Will Tell

August 2, 2017 - 8:52am

There is a lot of excitement about Bitcoin Cash. It became a thing yesterday and is up almost 100% in the last 24 hours according to Coin Market Cap.

It reminds me of the way hot IPOs trade. Snap went public at $17/sh, traded up to north of $24/share on it’s first day, and is currently trading at just under $13/sh.

I am not comparing BTC Cash to Snap. I am just saying that time will tell whether BTC Cash, or frankly any ICO, is going to be valuable long term.

But one thing is for sure, hard forks create something from nothing and we will see more of them as a result.


USV TEAM POSTS:

Albert Wenger — August 9, 2017
Uncertainty Wednesday: Risk Aversion (Jensen’s Inequality Cont’d)

Categories: Blog articles

Creating Tech Apprenticeships For Military Veterans

August 1, 2017 - 7:47am

AVC community member Bill McNeely is doing a Kickstarter to create tech apprenticeships for military veterans.

I backed it this morning and I thought all of you should know about it too.


USV TEAM POSTS:

Albert Wenger — August 9, 2017
Uncertainty Wednesday: Risk Aversion (Jensen’s Inequality Cont’d)

Categories: Blog articles

Unrelenting Stress

July 31, 2017 - 3:39am

I saw this Elon Musk tweet yesterday:

The reality is great highs, terrible lows and unrelenting stress. Don’t think people want to hear about the last two.

— Elon Musk (@elonmusk) July 30, 2017

What he describes in that tweet is the life of an entrepreneur. And also, to some extent, the life of a VC who cares.

The unrelenting stress is the hardest of the three in my opinion.

Stress is part of life, we all have it.

But starting and running companies brings stress that seemingly never stops.

Managing that so that it doesn’t eat you up and mess up your relationships is super hard.

Some things that I have seen work well for people are regular (daily?) workouts, eating and drinking healthy, having a coach, and most of all, having a spouse who keeps it all in check.

There is no better work, from where I sit, but it comes at a cost, particularly if you let it.


USV TEAM POSTS:

Albert Wenger — August 9, 2017
Uncertainty Wednesday: Risk Aversion (Jensen’s Inequality Cont’d)

Categories: Blog articles

On Forks

July 30, 2017 - 5:23am

Last year Ethereum forked and we got a new crypto asset called Ethereum Classic. I own Ethereum. I don’t own Ethereum Classic.

I could buy Ethereum Classic but I have not been interested in doing that as of yet. That may change.

Next week Bitcoin will fork. If you hold your Bitcoin directly, you will get Bitcoin Cash, the fork of Bitcoin, in addition to your Bitcoin.

If you hold Bitcoin at a hosted wallet or exchange that will not support the fork, like our portfolio company Coinbase, you will not get Bitcoin Cash.

I am going to keep my Bitcoin at Coinbase and pass on the opportunity to get some free Bitcoin Cash.

If, over time, Bitcoin Cash becomes interesting, I could buy some and maybe I will do that. Like I might buy some Ethereum Classic.

Yes, passing on the opportunity to get some free crypto is a missed opportunity.

But I am not sold on Bitcoin Cash, like I am not sold on Ethereum Classic. I would like these crypto assets to prove themselves in the market before I take ownership of them.

All of that said, I think forks are valuable. They allow for innovation. They allow for others to try a different model. They allow for the market to decide what is valuable and what is not.

Forks are a pain for the companies that provide the infrastructure for these crypto assets. Forks introduce instability for a period and the Ethereum fork last year is a good example of what can happen.

But all in all, I think forks are a feature not a bug in the blockchain sector. There is more good that comes from them than bad.


USV TEAM POSTS:

Albert Wenger — August 6, 2017
The Fallacy of Biological Determinism

Categories: Blog articles

Video Of The Week: Shipping As A Competitive Advantage

July 29, 2017 - 4:37am

Our portfolio company Shippo is helping ecommerce companies compete with Amazon by making shipping easier and less expensive to offer.

In this short(ish) video, Shippo’s founder and CEO, Laura Behrens Wu explains how they do that and why it is so important.


USV TEAM POSTS:

Albert Wenger — August 6, 2017
The Fallacy of Biological Determinism

Categories: Blog articles

Funding Friday: Restore Historic Mission Control

July 28, 2017 - 5:01am

This is so cool. I just backed it.


USV TEAM POSTS:

Nick Grossman — August 4, 2017
Learning by doing

Jacqueline Garavente — August 3, 2017
ARKit: a game-changer for the Metaverse

Categories: Blog articles

Startup Churn

July 27, 2017 - 2:25am

We encourage all of our portfolio companies to measure their churn rates by cohort. It is very revealing.

I saw this tweet by Liad this morning that shows startup churn by cohort.

No Cake Walk.
Not for Entrepreneurs.
Nor for Investors. pic.twitter.com/pRCLD3dfRy

— Liad Shababo (@L1AD) July 26, 2017

I don’t know the source, but the data is sobering.

Some of the churn is companies getting sold. Some of the churn is companies getting profitable. But most of the churn is companies failing.

We have looked at our portfolio this way and our portfolio has performed much better than this. Some of that is selection. Some of that is support. And some of that is tenacity of the founders.

But, as Liad says in his tweet, startups are no cake walk.


USV TEAM POSTS:

Nick Grossman — August 4, 2017
Learning by doing

Jacqueline Garavente — August 3, 2017
ARKit: a game-changer for the Metaverse

Categories: Blog articles