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Economic justice and the true meaning of the parable of the talents

Beyond Money - November 27, 2017 - 11:46am

I have, of late, been attending Sunday services at Grace St. Paul’s Episcopal Church in Tucson. What that might say about my views on religion is something I’ll save for a later time, but among the things that have drawn me to involve myself with that place are, first of all, its declared mission of caring, openness, social action and inclusion, and secondly, the deep insights into Biblical and related scriptures of its rector, Rev. Steve Keplinger.

In his sermon of November 19, 2017, Rev. Steve Keplinger explains the meaning of the parable of the talents (Matthew 25:14-30). Looking at it in the context of the prevailing culture at the time of Jesus, and the audience he was addressing, Steve’s interpretation will surprise you, as it did me. It makes a great deal more sense than the interpretations I (and probably, you) heard in your earlier religious education.

The first part of the audio recording is a clip from the soundtrack of the movie, Jaws, in which two of the characters compare their scars from wounds suffered in previous encounters. That sets the stage for Steve to describe his spiritual scars that remain from his earlier encounters with incorrect interpretations of that parable. You can listen to it here or on the Grace St. Paul’s website, or you can read the transcript here.


Categories: Blog articles

Cyber Monday Suggestion: Shop Etsy

A VC - November 27, 2017 - 3:47am

Etsy, now twelve years old, remains the best place on the Internet to find something unique and special for your holiday gift giving.

If you want to reject the sameness of Amazon and Walmart this holiday season, head on over to Etsy to do your shopping.

Here are two suggestions for holiday shopping on Etsy:

Holiday Gift Guides

 

Cyber Week Sales

 

Happy Shopping!


USV TEAM POSTS:

Albert Wenger — December 6, 2017
Uncertainty Wednesday: Suppressed Volatility

Albert Wenger — December 5, 2017
What Does it Mean to Be Human?

Categories: Blog articles

Success And Failure

A VC - November 26, 2017 - 12:09pm

We saw the Churchill film, Darkest Hour, yesterday. I loved it

It ends with a great quote, by Churchill of course, about success and failure:

Success is not final, failure is not fatal: it is the courage to continue that counts.

I think that sums up investing and entrepreneurship well. At least it does for me.


USV TEAM POSTS:

Albert Wenger — December 5, 2017
What Does it Mean to Be Human?

Jacqueline Garavente — December 4, 2017
CryptoKitties

Categories: Blog articles

Video Of The Week: Borders Are Within Us

A VC - November 25, 2017 - 6:54am

This is a fantastic Ted Talk given by Karoli Hindriks, founder and CEO of our portfolio company Jobbatical. It’s only ten minutes long and well worth your time this weekend.


USV TEAM POSTS:

Jacqueline Garavente — December 4, 2017
CryptoKitties

Categories: Blog articles

Funding Friday: Eyebeam’s New Home

A VC - November 24, 2017 - 7:46am

Eyebeam is a “a nonprofit studio for collaborative experiments with technology” which is based in NYC and has been connecting artists with technology for twenty years.

Eyebeam is moving into a new studio and is doing a crowdfunding campaign on Kickstarter to raise funds for some extras. They have already reached their minimum funding target of $15k but if they can reach $20k, they will be able to “purchase live-streaming equipment to enable event programs to be accessed globally.”

I backed this project this morning and if you are a fan of Eyebeam, like me, you can back it too right here.

Categories: Blog articles

Thankfully

A VC - November 23, 2017 - 7:01am

Thankfully the US is enjoying one of the longest economic expansions of the post-war period (101 months and counting)

Thankfully that economic expansion is starting to result in job growth for the parts of the economy that have lagged during this expansion

Thankfully the Trump Administration has, so far, failed to enact the most troublesome parts of its agenda

Thankfully the developing world continues to experience rising wealth, income, and living standards

Thankfully technology continues to produce answers to our most vexing problems

Thankfully renewable energy continues to grow and displace carbon-based energy around the world

Thankfully gender and racial equality is on the rise and white male dominance is on the decline

Thankfully literacy rates continue to rise rapidly around the world

Thankfully almost 100,000 students in the NYC public school system got a computer science class last year

Thankfully the NY Knicks are young, hungry, play hard, and are winning

Happy Thanksgiving Everyone

Categories: Blog articles

The End Of Net Neutrality As We Know It

A VC - November 22, 2017 - 5:22am

I have written about net neutrality frequently here at AVC. I believe that for as long as we have local monopolies and duopolies for last mile broadband internet in most parts of the US, we need our federal government to actively reign in the broadband providers from doing things that are anti-innovation, anti-consumer, and pro-big business. For much of the last decade, the internet crowd has been a force to be reckoned with on this issue and we fought for and won good net neutrality rules that were put in place and defended in court. If you are a long time reader of AVC, you heard me advocating for and celebrating these wins.

The times have changed. We have a pro-big business team in the White House and at the FCC who are hell-bent to overturn those hard fought for net neutrality rules. We should fight them in these efforts, just like we have fought for these rules at every turn. Here are some things you can do:

#NetNeutrality is NOT DEAD YET. Congress has stopped FCC votes before. Do NOT give up!

1) RETWEET this to help spread the word that we can still stop this.

2) CALL your lawmakers: https://t.co/S8d0OxZQe0

3) PROTEST at Verizon stores on Dec 7: https://t.co/OvdNJe0Idh pic.twitter.com/oPXgyGRsam

— Fight for the Future (@fightfortheftr) November 21, 2017

But even as we fight for net neutrality, we also should be investing heavily in efforts to reduce our society’s reliance on the big cable and telcos for our broadband internet. That’s the core problem here.

So, in addition to fighting for net neutrality, here is what you should be doing:

  1. Don’t use an ISP who won’t commit to following basic net neutrality rules if you have a choice. Our portfolio company Tucows has a subsidiary called Ting that provides fiber broadband in some parts of the country and they are committed to following basic net neutrality rules no matter what the law says. Use an ISP like that if you can.
  2. Report abusive behavior and business practices by your ISP to the FCC. This will become even more important if the FCC overturns net neutrality.
  3. Join a mesh network or multiple mesh networks. Peer to peer wireless is our best long-term solution to the monopoly/duopoly issue.
  4. Look for blockchain projects that are seeking to solve the mesh networking issue and support them. The token-based incentive business model is a powerful way to bootstrap p2p mesh networks. This piece from 2015 explains that well.

I believe that technology is ultimately a better solution than regulation to market failures like the monopoly/duopoly issue in last mile broadband and I am confident that we will get the technology to solve it soon enough (certainly in my expected lifetime). But until that happens, regulation is a good tool to keep things moving in the right direction. That’s why I have supported net neutrality and will continue to support it until the technology arrives in the mass market to address the underlying problem.

Categories: Blog articles

200x Growth

A VC - November 21, 2017 - 5:42am

Back in 2011, my partner Brad suggested that USV invest in a search engine called DuckDuckGo.

I laughed at the idea, “why would we ever want to compete with Google?”

“Because they do something Google will never do”, Brad explained.

That thing was private search, no storage of search history, no storing of personal information.

DuckDuckGo was doing about 100,000 searches a day when we had that conversation.

Last week, they had a day in which over 20mm direct searches were done.

That’s 200x growth over the six plus years we have been invested in DuckDuckGo.

Brad was right, of course, and I saw that pretty quickly as did everyone else at USV and we made that investment.

And I’m very glad we did.

I suspect I’ve told this story a few times now at AVC.

I love it so much.


USV TEAM POSTS:

Albert Wenger — November 29, 2017
Uncertainty Wednesday: Recap on Sample Behavior (Inference)

Categories: Blog articles

Hashpower Podcasts

A VC - November 20, 2017 - 4:59am

I sent these three Hashpower podcasts to a friend who was trying to make sense of the whole crypto thing and she found them valuable.

So I am sharing all of them with you today:


USV TEAM POSTS:

Albert Wenger — November 29, 2017
Uncertainty Wednesday: Recap on Sample Behavior (Inference)

Categories: Blog articles

The Top Of The Funnel

A VC - November 19, 2017 - 7:34am

Whether you have a e-commerce business, a SAAS business, a media business, a marketplace business, or some other business model, you are going to start thinking about customer acquisition at some point.

And there are a lot of options out there for acquiring customers; direct sales, indirect sales, channel, search engine marketing, social media, email, display, etc, etc.

But the best option, if you can pull it off, is to own an organic customer acquisition channel that is large and that sustains itself.

At USV, we have investments in a bunch of companies that have very large organic and sustainable top of the funnel customer flows. Many of these companies use a number of customer acquisition techniques, but they start with the organic channel and optimize it with their product development efforts.

Here are a few examples:

Codecademy – Codecademy offers a number of subscription learning services to people who want to learn to code. But because it has been offering free curriculum for learning to code for six years now, it was the first organic result I got this morning when I typed “learn to code” into Google:

Quizlet – Quizlet offers over 200mm study sets on the web and mobile to people who want to study and master something. No matter what you want to learn, you can find a study set on Quizlet to learn it. Quizlet is the “Wikipedia of studying” and because these study sets are free on the web and mobile, they have a huge organic flow of new users every month. Quizlet offers two subscription offerings to students and one to teachers and this organic flow is the primary customer acquisition channel for these offerings.

SoundCloud – SoundCloud is the first place most musicians go to post their music on the Internet. There are upwards of 200mm tracks on SoundCloud, the vast majority of which are free for anyone to listen to. This content is a huge attraction for listeners on web and mobile. SoundCloud has three subscription offerings, two for listeners and one for creators. The organic channel is the primary acquisition mechanism for these subscription offerings.

Kickstarter – When a project creator launches a Kickstarter project, they share it with as many people as they can through email, social, blogging, etc. This brings millions of backers to Kickstarter every month. Most of those backers arrive to consider backing a specific project and move on. But enough of them stick around to see what else is going on that Kickstarter has been able to build a large and sustainable business without any need for paid marketing channels.

Etsy – Etsy is now a public company and is no longer a USV portfolio company but I am the Chairman and remain actively involved with Etsy. Etsy is similar to Kickstarter in that sellers who have shops on Etsy are actively promoting their shops through various channels. Most of the buyers who arrive on Etsy that way purchase from the seller who brought them but some stay and shop from other sellers too. Etsy explained in it’s IPO filing that the vast majority of it’s traffic was organic. That is slowly changing but in Etsy’s early years, all of the traffic was organic.

I could keep going but I think you get the point. One of the things I look for in an investment is a free and sustainable flow of customers. This big top of the funnel may not be the only way a management team will choose to build their business but it makes a great foundation to build on and the LTV/CAC is infinite.


USV TEAM POSTS:

Albert Wenger — November 27, 2017
The Emotional Benefits of Letting your Car Drive You

Categories: Blog articles

Video Of The Week: AirCraft By Dronebase

A VC - November 18, 2017 - 6:22am

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 27, 2017
The Emotional Benefits of Letting your Car Drive You

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.

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:

Bethany Marz Crystal — November 24, 2017
Black Friday Throwback: What I Learned from Working at JCPenney

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:

Bethany Marz Crystal — November 24, 2017
Black Friday Throwback: What I Learned from Working at JCPenney

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 22, 2017
Uncertainty Wednesday: Pay Extra to Read (Or Fight to Protect Net Neutrality)

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 22, 2017
Uncertainty Wednesday: Pay Extra to Read (Or Fight to Protect Net Neutrality)

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 20, 2017
Wenger Design: Men’s Wear

Bethany Marz Crystal — November 20, 2017
Why I love traveling alone (and meeting new people)

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 20, 2017
Wenger Design: Men’s Wear

Bethany Marz Crystal — November 20, 2017
Why I love traveling alone (and meeting new people)

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:

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
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