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Investor Friendly Terms

A VC - August 14, 2018 - 4:02am

At USV, we have always had simple and investor-friendly terms with the institutions and individuals that provide the capital we invest.

I got thinking about that this morning in reading Brad Feld’s post about recycling management fees, something we do aggressively at USV (we have recycled between 20 and 25% of our mature VC funds).

We have never charged a premium carry or off-market management fee, we return all capital before taking carry distributions, and we recycle aggressively.

Certainly, we could charge more, but we have never wanted to do that.

When people ask me why not, I like to tell a story.

When Brad Burnham and I were raising the first USV fund, into the teeth of the VC and Internet meltdown of the early 2000s, we visited one of the top VC LPs in the world and he told us the story of a VC firm that they had been investing with for more than twenty years.

As the Internet bubble neared its pinnacle in late 1999, that firm came to the LP and told them that they were raising the carry from 20% to 30%. The LP, who had been supporting this firm for twenty years, was not comfortable with this hike in carry, but held their nose and went along with it.

Three years later, the firm came back for another fund, this time with a 1999 vintage fund in shambles.

They started out the pitch like this “we have had a wonderful and profitable relationship with you for twenty-three years.”

To which the LP retorted “Not really. We had a wonderful relationship with you for twenty years, then you reset the relationship and it has sucked ever since.”

That was the end of that LP/VC relationship.

That story has really stuck with me. Every time I think “we are well below market” I then think “but this is no time to upset the apple cart.” And I get back to work.

The same is true of entrepreneurs and VCs. You can push things too far and if you then stumble, it will come back to haunt you.

But if you are fair and reasonable, it will get paid back over time, particularly in times when you are struggling and need more capital.

That is how the world works. What goes around comes around. Best to be in good standing with your investors when it does.


USV TEAM POSTS:

Dani Grant — August 22, 2018
Observations About The Crypto Dev Experience

Categories: Blog articles

Strike When The Iron Is Hot

A VC - August 13, 2018 - 9:18am

I introduced a young friend of one of my children to a colleague in the tech business last month. The young friend took a day to reply to the email introduction and by then the introduction had gone cold.

Happily the introduction resurfaced this week and something may still come of it.

That story reminds me of another.

It was 1996 and Flatiron Partners had just relocated to the Flatiron district of NYC (we really had no choice but to locate there). A friend invited me to lunch at Gramercy Tavern which had opened a couple years previously and was one of the most happening restaurants in NYC.

We sat down to lunch and Danny Meyer, the owner of Gramercy Tavern, comes into the restaurant and starts working the lunch time crowd.

When he gets to our table my friend says to Danny “please meet Fred Wilson, founder of Flatiron Partners who has just relocated his business to the neighborhood.” Danny reached into his pocket, took out his business card, and said to me “Welcome to the neighborhood. If you ever need a table please give me a call and we will take care of you.”

That night when I got home I told the Gotham Gal “I met Danny Meyer today and he gave me his card and said I could call him whenever I need a table.” To which she replied “go there for lunch tomorrow.” And I told her “I don’t have a lunch tomorrow.” She said “Get one. He will remember who you are tomorrow but won’t next month.”

So I got a lunch, called Danny, got a table, and he again said hello when he worked the lunch crowd (something he used to do whenever he was in town). I became friends with Danny and still call him when I need a table at one of his restaurants and can’t get one on Resy.

Striking while the iron is hot is so important. I often thing of the Gotham Gal saying “get one.” It was absolutely the right thing to do and always is.


USV TEAM POSTS:

Dani Grant — August 22, 2018
Observations About The Crypto Dev Experience

Dani Grant — August 21, 2018
‍ Announcing Gravity

Categories: Blog articles

Capitulation?

A VC - August 12, 2018 - 5:50am

One of the things I have disliked the most about the crypto sector is the idea that people should “hodl” or “hold on for dear life.”

I have written many times here at AVC that one should take profits when they are available and diversify an investment portfolio.

The idea that an investor should hold on no matter what has always seemed ridiculous to me.

Now, the crypto markets are in the eighth month of a long and painful bear market and we are starting to see some signs of capitulation, particularly in the assets that went up the most last year.

Whether this is the long-awaited capitulation of the HODL crowd or not, I can’t say.

But capitulation would be a good thing for the crypto markets, releasing assets into the market that until now have been locked up by long-term holders.

Until then it is hard to get excited about buying anything in crypto.


USV TEAM POSTS:

Dani Grant — August 21, 2018
‍ Announcing Gravity

Categories: Blog articles

Audio Of The Week: Ryan Selkis On The Messari Project

A VC - August 11, 2018 - 9:25am

On this episode of the Epicenter podcast, Ryan Selkis, founder of the Messari project, talks about what they are trying to do with Messari and how it might bring needed transparency and accountability to ICOs and other token projects.

Categories: Blog articles

Funding Friday: This Place Will Be Water

A VC - August 10, 2018 - 8:10am

The neighborhood where we live in NYC will be underwater with a 2-degree Celsius increase in global temperatures.

This Kickstarter project will create stickers that all of us can place on places like ours and remind everyone that climate change is a big deal.

I backed this project today and you can too right here.

Categories: Blog articles

Regulating and Legislating Tech and Tech Companies

A VC - August 9, 2018 - 11:54am

More and more of the news around tech these days is about the relationship between technology companies and government. That was not the case a decade ago when regulators and elected officials took a largely hands off approach to technology, particularly the Internet, web, and mobile.

While I am not a fan of many of the moves that regulators and elected officials have made over the last few years, including the NYC City Council’s recent bills to clamp down on home-sharing and ride-sharing in NYC, I do believe that the tech sector and tech companies must engage with the public sector and they must do it earlier in their development.

It is hard to be an advocate for the tech sector and tech companies with the public sector, a role I play fairly regularly, when the companies in question have not been the best actors themselves.

The good news is that the tech sector no longer naively believes that it can opt out of the public discourse and political engagement.

The bad news is it is playing catch-up and is on it’s heels. That is going to take time and money to fix.

Emerging sectors like crypto and machine learning should pay heed to what has happened here and not make the same mistakes as their predecessors.


USV TEAM POSTS:

Dani Grant — August 17, 2018
Planet Money Buys A CryptoKitty; Takes Them Over An Hour

Categories: Blog articles

Reporting

A VC - August 8, 2018 - 1:21pm

At USV, we report to our investors on our portfolio and performance four times a year, once a quarter. We produce an audited report once a year, with our Q4 results.

We do that in writing and we also do a quarterly call for our investors three times a year (we combine our Q4 and Q1 calls since our annual audit process slows down our Q4 reporting).

In our annual and Q2 written reports, we prepare a short update on every one of our portfolio companies. We call these “one-pagers.”

This can be a fair bit of work but we do it regularly and have been doing it since we started USV.

I think it is a great discipline for investors to take the time on a regular basis to sit down and write and speak to their investors about what is going on in their portfolio and in the macro environment.

It is a time-honored tradition that fund managers write a letter to their investors explaining what they are seeing and doing. Warren Buffet’s letters are a particularly great example of that. But there are many fund managers who are excellent writers and whose letters get passed around and read by many in the investment community.

Everyone here at AVC knows that I think writing and investing fit like a hand and glove and writing and thinking out loud can make you a better investor.

The Gotham Gal and I are investors in a number of venture capital funds and I have noticed a trend among venture fund managers to reduce the amount of writing and verbal communication they do with their investors. I understand that it can be time-consuming and that many fund investors don’t even bother to read the reports.

But I would urge my peers to resist that urge and to take time to regularly sit down and write about what is going on in your portfolio companies and the markets you invest in. I think it provides insights, raises issues, and gets the entire investment team talking about things in a way that few other regular processes do.

Plus I really enjoy doing it.


USV TEAM POSTS:

Dani Grant — August 17, 2018
Planet Money Buys A CryptoKitty; Takes Them Over An Hour

Categories: Blog articles

Selling

A VC - August 7, 2018 - 7:02am

I like to think of the investing discipline as composed of three key modes of operation.

Buying – Figuring out what you should buy and what you should not buy. There are many strategies that work here but my favorite is buying things that others are not buying. And my preferred reason for “others not buying” is that they don’t know about it yet.

Managing – This is the work an investor does to manage the investment. It includes decisions around whether to buy more of an investment that is working, which is incredibly important and can massively impact returns. But I believe that the most powerful thing an investor can do to impact their investment is to work with the management of the investment to make sure that the team is making the right strategic and operational decisions.

Selling – This is all about when to exit an investment and how. It is the hardest part of the investing discipline in my view.

The conventional wisdom on selling is that an investor should set a target price when they buy and once an investment reaches that target price they should sell.

That approach doesn’t work very well in venture capital because as a minority investors in an illquid investment, we don’t control the sell decision.

That doesn’t mean I/we don’t have targets when we make our investments. But it does mean that we don’t usually have the ability to do sell when those targets are hit.

And, as a result of this dynamic in venture capital, I have learned a different lesson over the years about selling and that is to let your winners run and sell everything else.

As I mentioned previously, as minority investors in illiquid investments we don’t control the sell decisions. They are made by the Board and driven strongly by the founders and management.

But that said, when we have the opportunity to sell an investment that is not one of our big winners, I have found that it is generally the right idea to do that.

When you make an investment that is really working out, I have found that it is generally a good idea to hold on to it even when it goes past your original sell targets for it. It can be a useful discipline to develop new sell targets when this happens based on the new information you have about this investment.

In the venture capital business, your best investments often go public and the venture capital fund distributes the stock to the underlying investors (called LPs) in the venture fund. Those investors then have to make the sell decisions on those investments.

As a general partner in these venture capital funds, I receive these distributions too.

And, as a result of some really poor decisions earier in my career around selling or not selling public stocks that were distributed to me, I have developed an approach for selling stock that is distributed to me.

I like to sell one third of the position immediately, put one third away for a long term hold, and actively manage the other third.

This method insures that if the whole thing blows up, at least we got something out. If it goes up 10x or more, at least we didn’t miss out on all of that. And it is simple and easy to execute and we do it this way all of the time.

But even with all of these lessons I have learned and approaches I have developed over the years, I continue to struggle with selling. It is hard for me to do and I resist the urge, particularly with the big winners. It is like taking your medicine. You know it is the right thing to do but it doesn’t feel very good when you do it.


USV TEAM POSTS:

Nick Grossman — August 15, 2018
A little, and then a little more

Categories: Blog articles

Voice Input – Some Observations

A VC - August 6, 2018 - 4:47am

I have an excellent voice assistant on my Android phone. I never use it.

I could be dictating this blog post using the same voice assistant. I don’t do that except when I want to prove that I can.

We have had Alexa and Google Home in our home. We shut them off and sent them away.

But we use the Siri voice assistant on our AppleTV all the time.

Why?

Well for one, searching for video content does not have to be exact. Just close enough. So when you say “Allen Iverson crossover Michael Jordan” into your AppleTV remote, even if Siri doesn’t translate that perfectly, YouTube understands it and delivers up one of my favorite basketball moments reliably.

Second, the keypad entry on AppleTV is horrible. I spent some time yesterday setting up apps, entering passwords, etc and it is about the most frustrating experience I’ve had on a computer in a long time.

Siri on the AppleTV is so much better than the alternative and reliably good enough that it has become the way we interact with our AppleTV.

Another example is my car. I have a Jeep and it has this awful smart car UI called UConnect in it. It’s the worst. Except I can say “call Joanne Wilson” while I am driving and it does that pretty reliably. I have called a person we know named Jan Wilson a few times by accident, but that is way better than another kind of a accident in my Jeep.

So while voice imput has not taken hold in our life where text input works reliably and conveniently, it has taken hold where text input is not reliable, convenient, or safe.

What this tells me is the path forward for voice input technology, which has gotten very good, is in applications that are not mainstream yet but can get mainstream by solving the data input problem.

And, in fact, that is what is already happening.


USV TEAM POSTS:

Nick Grossman — August 15, 2018
A little, and then a little more

Categories: Blog articles

What Was, What Is, and What Will Be

A VC - August 5, 2018 - 4:36am

A friend shared this book and blog with me called Vanishing New York. Both chronicle the loss of the culture and institutions that made NYC a magical place to live in the 70s, 80s, and 90s.

Certainly rising rents, rising wealth, a rising proportion of apartments owned by people who don’t live here, and all in all, a major bout of affluenza is afflicting Manhattan and possibly greater NYC right now.

But I personally struggle with sentimentality and wistfulness. Yes, the NYC that I fell in love the in the early 80s is no more, replaced by something that is much harder to sing the praises of.

But what interests me more is not what was or even what is, but what will be?

Where is NYC heading?

How will it manage it’s transportation crisis?

How will it cope with rising sea levels?

How will it deal with entire blocks of empty store fronts, brought on by the rise of ecommerce and landlords who won’t accept that their space is no longer worth what it once was?

I loved this Atlantic piece that suggested NYC should reimagine it’s massive array of subway tunnels as the underground highways for autonomous vehicles. I have no idea if that is a good idea or even feasible. But I love the ingenuity and thinking the author displays.

The Gotham Gal and I are making an apartment building in Brooklyn that is heated and cooled by solar power and has enough left over that we can sell it to the deregulating energy markets in New York State. We hope to make a few more of these buildings and maybe we will inspire other developers to do the same.

I am drawn to the vitality of life in the outer boroughs where the melting pot vibe still pulses through the neighborhoods. Of course, gentrification can and will mess them up the same way it has messed up Manhattan if we aren’t careful. But we still have time to implement policies that can mitigate the negative aspects of gentrification.

My point is this.

We can, and probably should, bear witness to what has become of NYC and what we have lost in the process.

But we must also be working on, investing in, and imaging what NYC (and life in general) can and will become.

Change is the only constant. Fighting it is a losing proposition. Shaping it is the winning one.


USV TEAM POSTS:

Nick Grossman — August 13, 2018
Layers

Categories: Blog articles

Video Of The Week: Peter Kafka Interview of Kerry Trainor, SoundCloud CEO

A VC - August 4, 2018 - 4:44am

At the Code Media conference a few months, Peter Kafka interviewed Kerry Trainor, CEO of our portfolio company SoundCloud.

It’s a great conversation about the past and future of SoundCloud and also the past and future of the music business.


USV TEAM POSTS:

Nick Grossman — August 13, 2018
Layers

Albert Wenger — August 13, 2018
World After Capital: The Knowledge Loop

Categories: Blog articles

Feature Friday: The AppleTV TV App

A VC - August 3, 2018 - 4:53am

In late 2016/early 2017, Apple introduced a new app to the AppleTV called TV. We’ve had it on our various AppleTV devices but have not been big users of it until this summer.

With our recent move to ditch traditional cable/satellite and go “over the top”, we have started using the AppleTV a lot more and the TV app has become our primary way into TV content.

When you launch it, the app shows you what is playing now and what you have been watching recently:

There is a sports tab that is great when a lot of sports is on but not so great at 6:45am:

You connect your various apps to the TV app in settings and then the TV app aggregates the content from all of them:

What I don’t understand is is why some apps are supported and others are not. The awesome YouTubeTV app and Netflix, for example, are not supported by the TV app.

I guess this feature is invite only right now or something like that.

If the TV app was connected to every app that we have on our AppleTV, it would be the Google of TV and that’s a pretty powerful place for Apple to be. I have to believe that it is in their interest to go there.


USV TEAM POSTS:

Albert Wenger — August 11, 2018
Speech and Power

Categories: Blog articles

Sonos

A VC - August 2, 2018 - 3:57am

Sonos priced it’s initial public offering last night at $15/share and will start trading today under the ticker SONO.

I am very fond of this company and the products it makes. The Gotham Gal and I are surely one of the company’s best customers.

I am not an investor in Sonos, nor is USV, and this post is not a recommendation to purchase the stock. It is a love letter to the company.

The love affair started twelve years ago, in March of 2006.

The marketing folks at Sonos reached out to me and suggested that they sponsor the music picks I used to run on the sidebar on the AVC blog.

I said yes and Sonos ads started appearing on the AVC blog that month.

I also received a test unit and reviewed the Sonos product here on AVC later that month.

A year later, I visited Sonos at their headquarters in Santa Barbara California.

Over the years, we have purchased so many Sonos devices that I have lost count. We use them everywhere.

I have also written about Sonos dozens of times here at AVC.

There have been many attempts to build a home music device that is better than Sonos.

They have all failed.

It is possible that Apple will get it right with the HomePod.

But they haven’t done that yet.

And even if they do, we will likely stay with Sonos as it works so well for us and we have them everywhere.

And now Sonos is a public company. Well played Sonos.


USV TEAM POSTS:

Albert Wenger — August 11, 2018
Speech and Power

Categories: Blog articles

Developer In Residence

A VC - August 1, 2018 - 4:35am

For the past six months, Jed has been helping USV build some much-needed tools to connect people at our 60+ portfolio companies to each other.

It has worked out well, so well that we decided to ask Jed to join us full time in a new role that we call Developer In Residence.

Why would a VC firm need a full-time software developer?

Well, we have always had people at USV who can code, but it was always a side thing, never our full-time job.

And there are things that we are doing at USV that require a full-time commitment to the code.

Jed explained all of this and the fact that he moonlights as a bass singer in a barbershop quartet, on the USV blog yesterday.

At USV, we are committed to helping our portfolio companies without asking them to do a lot of the work to enable that.

Ultimately that requires intelligence that is automated and that means writing and maintaining code.

And so I’m thrilled that we now have a full-time person at USV who is doing that for us and our portfolio.

Categories: Blog articles

Where Did You Go To School?

A VC - July 31, 2018 - 3:57am

I read this post yesterday that says that 40% of VC investors went to either Stanford or Harvard.

Frankly, I am not surprised.

I’ve worked in this industry for over thirty years. It is full of Stanford and Harvard grads.

I’ve got nothing against either school. They are wonderful education institutions and full of great people.

We have Stanford and Harvard alums at USV so we are certainly a contributor to this statistic. But we don’t have 40% of our team from those two schools.

We don’t ask where you went to school on our analyst application. We ask you to answer four questions and we go from there.

I learned the VC business from a man who went to Case Western Reserve University, my co-founder of Flatiron Partners went to Queens College, and my co-founder of USV went to Wesleyan University.

We have hired analysts at USV that did not graduate from college and maybe didn’t even go, I really don’t know and don’t care.

What I have learned from all of these individuals is that curious and brilliant people come from all places, all genders, and all ethnic and racial backgrounds.

The VC business is making some progress on gender diversity. This chart is from the same post that I linked to at the start of this post.

Eighteen percent is not a number to be proud of, but 60% growth in two years is. If we continue at that rate of gender diversity growth, the VC business could be gender neutral by the middle of next decade. It would not surprise me if that happens. I feel the desire for gender diversity pulsing through our industry so powerfully right now.

But in most other ways, the VC business is still a very homogenous place. Mostly white and, it turns out, mostly educated at a handful of higher education institutions.

We can do better. We must do better. And, I hope, we will do better. Looking in the mirror and not liking what you are seeing is the first step to rehabilitation.


USV TEAM POSTS:

Jennifer Greenberg — August 8, 2018
Analyzing Tools Used by Our Network

Categories: Blog articles

Kin Developer Program

A VC - July 30, 2018 - 4:47am

Kin, the cryptocurrency launched by Kik (a USV portfolio company), recently launched a developer challenge. The challenge: build a breakout cryptocurrency-based consumer experience.

Kin is a cryptocurrency focused on driving mainstream consumer transactions. Kin envisions a world where cryptocurrencies are used by people every day.

Consumers have no problem buying coffee with dollars every day. Dollars work great for that transaction.

Kin is focused on driving daily consumer utility in the digital world. Digital value for digital goods.

So, Kin launched a program designed to incentivize developers to build consumer apps with the Kin SDK.  The incentives are described here.

Developers are invited to submit ideas by August 10th. If you’re selected, and you publish an app, and you drive a significant number of active Kin wallets, you will receive the incentives.

This is a greenfield opportunity for developers. There are all sorts of consumer use cases to be discovered. So build a fun app and get rewarded for doing it.


USV TEAM POSTS:

Jennifer Greenberg — August 8, 2018
Analyzing Tools Used by Our Network

Categories: Blog articles

Drinking From The Crypto Firehose

A VC - July 29, 2018 - 5:25am

It is my view and our view at USV that the crypto market is in what Carlota Perez calls the installation phase.

We believe that we are still putting the pieces in place for a new technology architecture to take hold.

The “big bang” for this technology cycle was the publishing of Satoshi’s whitepaper, almost ten years ago.

But we still don’t have consensus mechanisms that can scale to transaction speeds that are typical of mainstream web apps, we don’t yet have consensus mechanisms that are both energy efficient and battle-tested at scale, we don’t have an array of development tools that make building applications on this stack easy, quick, safe, and secure, we don’t have hundreds of millions of users with crypto browsers & wallets, and we don’t have all the other things that would need to be in place in order to move into the deployment phase.

But we do have the one thing that is the hallmark of a classic installation phase. We have a frenzy of innovation and financial capital that has been unleashed by the ICO boom, itself a creation of the crypto tech cycle.

Over $20bn has been raised by crypto projects via ICOs in the last 18 months.

And that is not counting the amount of capital that has gone into crypto companies via traditional means (venture capital, angel capital, etc).

This frenzy of entrepreneurship and investment has unleashed thousands of crypto projects all around the world.

And many of these teams, projects, companies are shipping things now.

Which is leading to an incredible amount of innovation coming to market in a very short period of time.

Like any early market, most of these projects and companies will fail. Some will fail to ship. Some will ship things that don’t work. Some will ship things that work but aren’t adopted. And some will ship things that are adopted but are surpassed by something better. The failure rate of these thousands of projects will be very high.

But inside this cohort of companies and projects will be the next Google, Amazon, Facebook, Twitter, Dropbox, Uber, and Airbnb.

And so the job of a crypto investor is to sort through all of them and decide which ones have the best chance of emerging as a winner.

We have been doing that for seven years now, since we first started poking around this sector in 2011.

And it has never been harder.

It is like drinking from a firehose right now.

There are so many high-quality projects, high-quality teams, and blue-chip financings happening in the crypto market right now.

It makes my head spin just trying to stay on top of it all.

And we have a great team of investors at USV working on this, and we have a network of crypto funds we have invested in that we collaborate with, and we have a bunch of like-minded VC firms that we work with in this sector.

That produces a lot of information flow and helps us better understand what is going on.

And what is going on is a frenzy of innovation that will lead to many important things.

But keeping up with it all is exhausting.


USV TEAM POSTS:

Jennifer Greenberg — August 8, 2018
Analyzing Tools Used by Our Network

Dani Grant — August 7, 2018
The Distributed Computing Update

Categories: Blog articles

Video Of The Week: Ten Ways To Be Your Own Boss

A VC - July 28, 2018 - 6:00am

I spoke to a group of women entrepreneurs a few weeks ago, and one asked me “why do you need to raise VC?”

And the answer is “you don’t.”

The vast majority of entrepreneurs out there don’t raise VC. Many don’t raise any money to start their businesses.

As I was answering that question, I thought about a talk I gave at the 99U Conference back in 2012 called “Ten Ways To Be Your Own Boss.”

I’m sure I have posted this here before, probably back in 2012, but I thought I’d post it again.

It makes the point that you don’t need VC to be an entrepreneur pretty nicely.


USV TEAM POSTS:

Albert Wenger — August 6, 2018
World After Capital: The Power of Knowledge

Dani Grant — August 6, 2018
Middleman: In Beta Today

Categories: Blog articles

Funding Friday: A Flying Saucer Tortillero

A VC - July 27, 2018 - 5:19am

I am a big fan of small creative projects on Kickstarter. And I also love supporting creators from other parts of the world.

As an example, I backed this project out of Mexico today. The designer is creating a tortillero, a tortilla warmer, that looks like a flying saucer.

And, naturally, I also love warm tortillas.

Categories: Blog articles

I Don’t Know

A VC - July 26, 2018 - 5:21am

An entrepreneur asked me a great question last week:

When is it OK to say I don’t know in a pitch meeting?

I told her the following things:

1/ This varies from investor to investor. Some investors are looking for founders to have all the answers.

2/ I am not one of those investors but I do want the founders to have some of the answers.

3/ If I asked her how large and valuable her publicly traded competitor is, and she said “I don’t know but I will find out and get back to you on that”, I would be fine with that answer.

4/ If I asked her what the tech stack is that her engineering team is using to build the product, I would be dissapointed if she didn’t know that answer.

In general, I believe it is critical that the founder be knowledgeable about all the details and aspects of the internal operations. They should have those answers on the tip of their tongue. That includes things like monthly burn, cash balance, headcount, etc.

And if you don’t know the answer to the question, you should be honest about it and say that you will get it and get back to the investor. And do that quickly.

Sometimes investors ask ridiculous questions and then you have to bite your tongue and be polite.

I will end with a great story. It was 1991 and we had seed funded a brilliant software engineer who was building a product for the wall street sector. I took him to see a very prestigious VC as we were looking to fill out the seed round. The company was maybe six months old and was not yet in market with the product.

The entrepreneur started in on the market, the opportunity, and the product. Maybe three or four minutes in, the VC interrupts the founder and asks, “what will your revenues and profits be next year and the year after?”

The founder was pissed. He had not even gotten to the product they were building and he was annoyed by the interruption and the question.

So he answers in his broken English “I don’t have a fucking clue.”

Our meeting ended several minutes later and we were shown the door.

We did not secure an investment from that VC but the company was successful and went public five or six years later.

So you obviously don’t need to have all of the answers in a pitch meeting to be successful. But you do need to be polite and respectful if you want to secure the funding. And there are some things you absolutely need to know the answers to.


USV TEAM POSTS:

Albert Wenger — August 3, 2018
Browser, Wallet or Something New? Looking for Crypto Ease of Use

Categories: Blog articles
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