Feed aggregator

Funding Friday: Restore Historic Mission Control

A VC - 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

A VC - 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

The SEC Speaks On Tokens

A VC - July 26, 2017 - 4:16am

Yesterday the SEC issued a report of investigation finding that DAO Tokens are securities under U.S. law. This report sent shock waves across the crypto sector leading to roughly 10% declines in the major cryptocurrencies. I must have received a dozen or more emails from people saying that “ICOs are over.”

I don’t think ICOs are over. I think regulatory clarity is going to be good for the crypto sector long term and while this report does not give us total regulatory clarity, it does give us some very valuable insights into what the SEC is thinking about tokens.

Specifically, we now know that:

  1. The Howey test is the regulatory framework through which to evaluate whether a token is a security.
  2. A token that return profits to holders will be considered a security.

We likely know a lot more regarding jurisdictional issues and what the SEC is going to regulate and what they are not. But I will leave it to the lawyers and other SEC watchers to weigh in on that. I am not a professional and don’t want to pretend to be.

At USV, we have been urging our portfolio companies and others in the crypto sector to get good legal advice before embarking on an ICO, investing in ICOs, and more. That legal advice, given as far back as several years ago, more or less anticipated much of what was in this report.

You could see this coming if you did your homework. None of this is surprising to me and to most of the folks in the crypto sector who have sought legal counsel on these matters.

In fact, if you look at all of the regulatory actions that have been taken in the US over the life of cryptocurrencies, you will see that it has mostly been straightforward application of existing laws, on AML, KYC, taxes, securities, etc. Almost all of this could be, and in many cases, was anticipated by those who took the time to consider what the regulators might do and would do.

None of this means that the crypto sector in the US (or elsewhere) won’t be harmed by bad regulations. That has always been a big risk to the sector and remains one. Regulators must be careful to “do no harm”, here in the US and elsewhere. To date, I would say they have done a good job on that. I encourage them to continue that track record.

But mostly I would encourage all entrepreneurs, investors, and others who are actively participating in the crypto sector to get good legal advice before doing anything significant. The regulators are watching. Closely. So know the rules and play by them.


USV TEAM POSTS:

Nick Grossman — August 4, 2017
Learning by doing

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

Nick Grossman — August 3, 2017
Keeping it simple

Categories: Blog articles

Zemanta – From SeedCamp to Outbrain

A VC - July 25, 2017 - 10:00am

In the summer of 2008, I attended the SeedCamp in London and the winner of that class was a company called Zemanta, out of Ljubljana Slovenia. I was taken with everything about Zemanta; a small team (three founders), out of a place that I had never been to and had barely heard of, winning the SeedCamp with a really smart blogging tool that I just had to have on my blog.

USV invested in a seed round that summer that was led by the SeedCamp folks and Eden Ventures. Zemanta was USV’s first European investment. Today, we have ten out of sixty-seven active portfolio companies (~15%) based in Europe.

The seed investment in Zemanta led to a nine year journey with Bostjan and Andraz, who founded Zemanta along with Ales.

The blogging tool is amazing. It recommends links and images in real time as you type into your blogging tool. I still have it running in my WordPress web application. It looks like this right now.

Zemanta sold the blogging tool to a company called Sovrn a while ago and refocused on the native advertising market. They understood how to place related content into a content feed as well as anyone and they decided to focus the company on that. Bostjan and Andraz recruited Todd to lead the new business opportunity. Over the course of the last three years, Zemanta DSP has become the leading buying tool for native advertising.

And the largest company in the native advertising market, Outbrain, became their largest customer. So a few months ago, Outbrain asked the Zemanta founders to join their team and help build some important new technology for Outbrain. After haggling for a few minutes, the deal was sealed and Outbrain now has an office and a team in Ljubljana.

Like every investment, Zemanta taught me a few important things. I learned how to work with founders from a different part of the world, I learned that Ljubljana is a lovely little city with wonderful cafes and restaurants along a gorgeous river, I learned that you can keep a company alive for almost a decade on less than five million dollars if you have a crack team of product managers, data scientists, and software engineers in a place that most people don’t know about, and I learned that tenacity wins, always.

I am pleased that Zemanta has found a home inside a larger company with a bigger opportunity, I am pleased that Ljubljana has a startup success it can point to, and I am pleased that USV is now a shareholder in Outbrain, an investment I mistakenly passed on a decade ago. But mostly I am pleased that Bostjan and Andraz, with a lot of help from Todd, were able to go all the way, from startup to exit, never losing that which makes them special. That’s a big win in my book.


USV TEAM POSTS:

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

Nick Grossman — August 3, 2017
Keeping it simple

Albert Wenger — August 2, 2017
Uncertainty Wednesday: Jensen’s Inequality

Categories: Blog articles

What can history teach us about the present?

Beyond Money - July 24, 2017 - 12:47pm

Is there a science of history? Are there patterns in human affairs that tend to repeat themselves? Can we understand what is happening in our time by studying the past? These are questions that have intrigued me for a long time. Based on my study of systems, networks, political economy, and human behavior, my conclusions tends toward the affirmative in each case.

Based on his book, 1177 BC: The Year Civilization Collapsed, Prof. Eric Cline, in this fascinating lecture, looks back more than 3,200 years to describe the collapse of an earlier “global” civilization.  He presents evidence of an elaborate trading network around the Mediterranean which was composed of what he calls “the G8 of the ancient world.”

Here is a portion of the description from the YouTube channel:
“From about 1500 BC to 1200 BC, the Mediterranean region played host to a complex cosmopolitan and globalized world-system. It may have been this very internationalism that contributed to the apocalyptic disaster that ended the Bronze Age. When the end came, the civilized and international world of the Mediterranean regions came to a dramatic halt in a vast area stretching from Greece and Italy in the west to Egypt, Canaan, and Mesopotamia in the east. Large empires and small kingdoms collapsed rapidly. With their end came the world’s first recorded Dark Ages. It was not until centuries later that a new cultural renaissance emerged in Greece and the other affected areas, setting the stage for the evolution of Western society as we know it today. Professor Eric H. Cline of The George Washington University will explore why the Bronze Age came to an end and whether the collapse of those ancient civilizations might hold some warnings for our current society.”

On the same general topic, Ian Morris, Professor of History at Stanford University, in his lecture Why the West Rules — For Now: The Patterns of History, and What They Reveal About the Future, points to the same primary factors that lead to the collapse of civilizations.

Mass migration
Epidemic diseases
State failure
Famine
Climate change

Historically, each collapse had been followed by a “dark age.” Is that what’s in store for us in our time? View the full lecture at https://youtu.be/wnqS7G3LmMo.


Categories: Blog articles

Comment Policy

A VC - July 24, 2017 - 4:04am

Our portfolio company Disqus, the company that makes the comment system we use here at AVC, released a new feature last week.

This new feature allows a blogger/publisher to put their comment policy above the comment thread.

You can see it here, at the end of yesterday’s post, above the comment thread.

For those of you who use the Disqus comment system on their blogs and/or publications, here is a knowledge base post detailing how to use this new feature and containing some advice on how to set a comment policy.

As always, we encourage comments here at AVC. But please be nice or leave. It makes everything so much better.


USV TEAM POSTS:

Albert Wenger — August 2, 2017
Uncertainty Wednesday: Jensen’s Inequality

Nick Grossman — August 1, 2017
What’s your medium?

Categories: Blog articles

SegWit2x Update

A VC - July 23, 2017 - 4:28am

I posted last week about the debate between the SegWit2x Bitcoin update and the threat of a soft fork.

Since then a number of important things have happened.

BIP91 locked in on Thursday and and yesterday BIP91 enforcement was activated.

That means that SegWit is now active on the Bitcoin network.

This is a big deal because the most contentious protocol change in the history of Bitcoin, the introduction of SegWit, has finally happened.

The SegWit2x road map is not complete yet, as the next step will be to introduce a block size increase.

Jeff Garzik, who has been leading the SegWit2x implementation, has a good interview up on Coindesk explaining all of this and more.

Bitcoin has a lot of great things about it. As Jeff says in the interview, it is by far the most secure blockchain. But it’s developer community has had a hard time finding consensus and moving forward together.

SegWit2x is an opportunity for that to change. And I am encouraged by that.


USV TEAM POSTS:

Nick Grossman — August 1, 2017
What’s your medium?

Categories: Blog articles

Video Of The Week: Mesh Networking For Wireless Connectivity

A VC - July 22, 2017 - 6:03am

Daniela Perdomo, founder and CEO of our portfolio company goTenna recently gave a talk at the New York Times about how mesh networking can improve wireless connectivity in urban environments.

It’s a short talk (~7 mins) and explains how mesh networking technologies can (and will) solve urban wireless connectivity issues in the coming years.

Also, goTenna launched a map of its mesh network yesterday. Here is what it looks like as of today:


USV TEAM POSTS:

Albert Wenger — July 31, 2017
VPNs and Informational Freedom

Categories: Blog articles

Funding Friday: Token Filings

A VC - July 21, 2017 - 3:44am

Public market investors who like to buy into IPOs have Edgar, a database of SEC filings that they can browse through to learn important information on upcoming IPOs.

Investors in token offerings have not had the same thing. Until yesterday.

AVC regular William Mougayar has launched TokenFilings.com which is essentially Edgar for Tokens.

Yesterday we got Coindexter. Today we get TokenFilings.

The crypto community is building stuff that makes this sector more interesting every day.

Reminds me of what the Internet used to be before the big guys took over.


USV TEAM POSTS:

Nick Grossman — July 29, 2017
Speaking page

Categories: Blog articles

What in the world is going on? — Part 3

Beyond Money - July 20, 2017 - 9:20am

George Friedman, professional geopolitical analyst, founder of STRATFOR and author of The Next 100 Years: A Forecast for the 21st Century seems quite knowledgeable about history and the current status of military and economic power around the world.  In the following presentation he talks about U.S. strategy over the past 100 years and “the real interests of the United States.” He argues that the powers that control U.S. foreign policy have one overriding fear, which is “a united Eurasia”–“Our primary interest is to make sure that Russia and Germany do not form an entente,” neither by conquest nor agreement.

He observes that “Eurasia is now in complete chaos,” Russia and China are both weakening, and that Japan, Turkey, Poland are on the rise. He admits that “We staged the coup in Ukraine.” Regarding the Middle-East, he says “it will come down to Israel, Iran, Saudi Arabia, and Turkey to work it out.”

He believes (or claims to) that the U.S. intervention in Libya was ethically motivated, but I find that hard to believe. The evidence of the past century of U.S. interventions around the world shows quite clearly that ethical and humanitarian motivations provide mere cover for quite different  objectives. In the case of Libya, I believe that the attacks by the U.S. and NATO forces, and the murder of Muammar Gaddafi, had more to do with keeping Libya within the global debt money regime than with rescuing the Libyan people from the clutches of a “brutal dictator.”–t.h.g.


Categories: Blog articles

Coindexter

A VC - July 20, 2017 - 4:47am

Our former USV colleague Jonathan Libov finally took the covers off a side project he’s been working on since he was at USV.

It is called Coindexter and it’s “a collaborative library for long-term investors in decentralized, blockchain networks.”

You can contribute to Coindexter, like a wiki, or dive into research areasthat interest you. Feel free to ask a question if there’s something you’re looking to learn.

Check it out if you are into token/crypto investing.


USV TEAM POSTS:

Albert Wenger — July 28, 2017
Putting People First on Healthcare

Bethany Marz Crystal — July 27, 2017
Beyond Coding: Gamifying the Link Between Education and Industry

Categories: Blog articles

USV Team Posts

A VC - July 19, 2017 - 4:19am

If you are reading this blog via email, you are missing out on a great new feature.

At the end of the first post on AVC, there is a widget that shows other blog posts by USV team members.

This is what it looks like today, featuring three posts by my colleague Bethany. I suspect she added her blog’s RSS feed to the widget yesterday.

This is a classic old school link sharing network. A number of my USV colleagues, including Nick, Albert, and Jacqueline also participate in this.

So we’ve added a little bit more USV to AVC. And that’s a good thing. And long overdue.


USV TEAM POSTS:

Albert Wenger — July 28, 2017
Putting People First on Healthcare

Bethany Marz Crystal — July 27, 2017
Beyond Coding: Gamifying the Link Between Education and Industry

Categories: Blog articles

Succession Planning In Partnerships

A VC - July 18, 2017 - 6:35am

I read today that the founders of KKR have named Joseph Bae and Scott Nuttall as co-Presidents and heir apparents. I’ve written before about succession planning in investment firms. Getting this right is challenging. There are a lot of stakeholders; the investors, the partners, the employees, the portfolio companies. Everyone worries about what might change under new leadership.

I am a fan of gradual but clear and transparent transition, which is what KKR is doing and what we have done at USV.

Our partners Albert and Andy have been running USV for the last eighteen months as Brad, John, and I have focused our time on our portfolio companies and new investment opportunities (which Albert and Andy also do).

Giving everyone clarity about what is going to happen but allowing the transition to play out over time seems to work best in investment partnerhsips, which contrasts with the quick handovers which seem to work best in operating businesses.

Partnerships are complex and powerful operating models. When they work well they are a beautiful thing. But they are easy to mess up and so transitions need to be handled with a lot of care.


USV TEAM POSTS:

Albert Wenger — July 26, 2017
Uncertainty Wednesday: Functions of Random Variables

Albert Wenger — July 25, 2017
Attention on Digital Monopolies

Categories: Blog articles

SegWit2x vs UASF

A VC - July 17, 2017 - 6:37am

Bloomberg has a good piece on the struggle between the Bitcoin core developers and the leading miners on how to best scale Bitcoin.

I am for the SegWit2x proposal and hope that we see it broadly adopted later this month.

There is a chance that doesn’t happen and a user activated soft fork (UASF) could be used to force SegWit into the market.

I personally hope that a user activated soft fork doesn’t happen as it would create a lot of turbulence. The Ethereum fork last year (almost exactly a year ago) that created Ethereum Classic is a good case study to look at if you want to see how that might play out.

Ultimately I do believe the best ideas will win out and that Bitcoin can survive any of these scenarios. But it would be good to see the Bitcoin community agree on something and implement it. That would build confidence that the governance model, which has been a bit shaky, is maturing.


USV TEAM POSTS:

Albert Wenger — July 25, 2017
Attention on Digital Monopolies

Categories: Blog articles

Easy Come, Easy Go

A VC - July 16, 2017 - 4:21am

I saw a friend last night who has been trading fiat currencies for thirty years. He looked at the Bitcoin chart and said “I would be worried about Bitcoin if I were you.”

He knows that we own a fair bit of Bitcoin (and Ethereum).

My take on the selloff that continues in the leading cryptocurrencies is “easy come, easy go.”

Anything that goes up 38x in six months can easily go down by just as much.

I am not saying that ETH is going back to $10 or that BTC is going back to $1000. That of course could happen. I am just not predicting it.

It has been too easy to make money in crypto this year. It has been too easy to raise money in token offerings this year.

Tapping people who have made 50x their money on ETH to invest in your whitepaper is a great way to raise money until those people start to lose money on their ETH and fear starts overtaking greed as the dominant emotion in crypto land.

But crypto has not been an easy business to be in over the last eight years. It has just been an easy business to be in over the last seven months.

I remember the two bubbles we experienced in BTC back in 2013:

In April 2013, BTC peaked at just over $200 and then quickly retreated back to below $100.

In November 2013, BTC traded briefly above $1000 and then faded, and did not see that level again until January of this year.

I remember back in the late 90s, a reporter asked my partner at the time Jerry Colonna what he looked for in entrepreneurs.

Jerry said “I want to back people who are doing a startup because of the mission rather than the money, because someday the market will crash and the money will be gone and I want to be with an entrepreneur who will still be around then.”

Bubbles always attract people who are chasing the easy money. And those people come and go.

But crypto is about a lot more than making money.

And the people who are into crypto because of the mission, a global decentralized platform for innovation, are going to be around after this bubble bursts, and the next one bursts, and the next one bursts. They have been around since before the April 2013 bubble and the November 2013 bubble, building this important technology. And so have I and I’m not going anywhere either.


USV TEAM POSTS:

Albert Wenger — July 25, 2017
Attention on Digital Monopolies

Categories: Blog articles

Aaron Schwartz, revolutionary genius

Beyond Money - July 15, 2017 - 12:50pm

I could not help but be moved by watching this documentary about the life and death of Aaron Schwartz. Aaron fought for justice and for open access to the information commons. We all owe him a great debt of gratitude.


Categories: Blog articles

Video Of The Week: Richard Craib: Numerai

A VC - July 15, 2017 - 4:15am

In this episode of This Week In Startups, Jason Calacanis talks to Richard Craib, founder of our portfolio company Numerai.


USV TEAM POSTS:

Albert Wenger — July 21, 2017
Homo Deus by Yuval Harari (Book Review)

Categories: Blog articles

Funding Friday: The Other Music Documentary

A VC - July 14, 2017 - 4:43am

Other Music was an iconic record store in Greenwich Village in NYC. It closed last year.

This project is a documentary about an amazing place that no longer exists.

I backed it this morning.


USV TEAM POSTS:

Albert Wenger — July 21, 2017
Homo Deus by Yuval Harari (Book Review)

Categories: Blog articles

Clarifai Mobile SDK – Machine Learning On The Phone

A VC - July 13, 2017 - 7:32am

Our portfolio company Clarifai introduced something exciting yesterday.

It is a mobile SDK that any developer can put into their mobile app and it will allow for machine learning on the device:

Machine learning (the process by which computers can get smarter through data examples instead of explicit programming) requires massive computational power, the kind usually found in clusters of computer servers in massive datacenters (ooooh, the cloud). This means that machine learning technology is usually only available to those who can connect to the cloud.

Not anymore! Clarifai’s Mobile SDK gives users the power to train and use AI in the palms of their hands by installing machine learning capability directly on their devices, bypassing the traditional requirement of internet connectivity and massive computing power. After all, these days we have tiny supercomputers in our pockets – our mobile phones. Starting with an iOS SDK, Clarifai is on a mission to make user experiences uniquely personalized on any device from your cellphone to your toaster, anywhere in the world.

Here’s a slideshow that explains how this works:

Clarifai – MobileBeat 2017 AI Showcase Presentation from Amy Liu
USV TEAM POSTS:

Albert Wenger — July 21, 2017
Homo Deus by Yuval Harari (Book Review)

Categories: Blog articles

Trump resists pressure from the war mongers; makes friends with Russia

Beyond Money - July 12, 2017 - 1:24pm

The meeting between Donald Trump and Vladimir Putin at the G20 Summit was encouraging in its length, breadth, and outcomes. The western mainstream media propaganda machine has been relentless in its barrage of allegations, innuendo, and hype against Russia in the elite’s attempt to rekindle the cold war and corral every nation into the global debt-money regime that is their greatest lever of control.

President Trump seems to have thrown a monkey wrench into the works on that, but it  remains to be seen how far his administration will be allowed to get out of line before the rug is pulled out from under him—one way or another. This article by Israel Shamir on the Global Research website provides a thorough account and analysis of the Trump-Putin meeting. And this article by Finian Cunningham about the reaction from the US Deep State, is also worth reading. -t.h.g.


Categories: Blog articles
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