Ride It to the SkyDon't Die of Heart Disease
During my "hiatus" I've been doing research in a variety of different areas that interest me. After a personal experience with basal c...
Ride It to the SkyThe Deal
Founders have little to no diversification. They are all in on one idea, company, and mission. It's an insanely high-risk, high-reward endeavor. As founders become increasingly wary of this level of risk concentration, they begin to think about ways to mitigate it. One idea I've heard repeatedly is the notion that a group of founders can self-assemble and contribute a percentage of their equity in their company to a shared pool. That way, if they fail and one of the other founders in the grou...
Ride It to the SkySequoia Wants It Hard
I have seen a lot of young first-time founders play it fast and loose in their fundraising processes the past several years. It’s been frothy times, so I think it brings out a lot of strange behavior. It got me thinking of when I was a young founder and the things I’d do, particularly one specific story that I tell people when I get asked “what not to do” when fundraising. Back in 2010 Steve and I launched GroupMe to much fanfare. It got a lot of attention out the gate because we built it at ...
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>600 subscribers
Ride It to the SkyDon't Die of Heart Disease
During my "hiatus" I've been doing research in a variety of different areas that interest me. After a personal experience with basal c...
Ride It to the SkyThe Deal
Founders have little to no diversification. They are all in on one idea, company, and mission. It's an insanely high-risk, high-reward endeavor. As founders become increasingly wary of this level of risk concentration, they begin to think about ways to mitigate it. One idea I've heard repeatedly is the notion that a group of founders can self-assemble and contribute a percentage of their equity in their company to a shared pool. That way, if they fail and one of the other founders in the grou...
Ride It to the SkySequoia Wants It Hard
I have seen a lot of young first-time founders play it fast and loose in their fundraising processes the past several years. It’s been frothy times, so I think it brings out a lot of strange behavior. It got me thinking of when I was a young founder and the things I’d do, particularly one specific story that I tell people when I get asked “what not to do” when fundraising. Back in 2010 Steve and I launched GroupMe to much fanfare. It got a lot of attention out the gate because we built it at ...
Subscribe to Ride It to the Sky
>600 subscribers
Share Dialog
Share Dialog
Yesterday Nick published a post about USV's thesis-driven approach to investing. We also updated our About page. There is a section called How We Operate that I love. I have had a lot of conversations lately about why I joined USV and why I think it's such a unique place. I wrote about my relationship with the firm over time, but that was only part of the story behind my decision. The rest is encapsulated by this tweet that Andy wrote:
All of these attributes are very important and unique, especially for Founders that choose to work with us.
To me, the beauty of venture capital is about the alignment between the investor and the entrepreneur. Managers of small funds make money the same way founders do, and there is something very romantic about this and it deeply resonates with me. Small funds like USV can deliver venture scale returns through concentrated investments in early stage companies. By design they are required to focus on Series A and seed. This is exactly where I like to focus because as a Founder the investors I partnered with at this stage were the relationships I cherished and found most helpful on my journey. I don't think there is a perfect fund structure in venture capital. There are many ways to do this and firms have been successful pursuing different approaches, but small funds are my strong preference and I think create the best alignment between entrepreneurs, fund managers, and LPs. Fred has written some excellent posts about this here and here.
Thesis-driven investing is important because it reflects that you know who you are and what you stand for. I also think it's also an entrepreneurial style of investing because you are painting a picture of how you think the world will unfold over the next 5-10 years and what you want to happen, and then strategically using financial capital as a tool to realize that vision with like minded entrepreneurs. A strong thesis helps Founders understand how an investor thinks and what motivates them beyond financial returns. Being generalist means that we can maneuver across social applications, marketplaces, web3, fintech, health, education, climate and more. This enables serendipitous things to happen in portfolio construction and for people to transfer learnings across all these different areas. A lot of the most compelling and exciting opportunities happen at the intersection of different fields and being generalist equips you to play at these intersections, which are often at the edge.
It was very important for me to join somewhere where partners work together as a collective. USV has long prided itself on being an equal partnership. I think this is the ideal model that creates a set of aligned incentives across the firm, and I fervently believe that incentives drive behavior. When there are no politics or people vying for a bigger slice of a pie, magic happens. When things are done collaboratively and equally, everyone roots for each other and the only winner is the team. This means that everyone is all in on every investment because everyone has a meaningful and vested interest in the success of a company and entrepreneur. When people work with USV they get the whole firm and that is quite rare and special.
Andy's tweet was less than 280 characters but it is loaded with meaning. The implications of these defining characteristics determine how the firm works and how an entrepreneur experiences USV, and they're one of the major reasons why I'm here today.
Yesterday Nick published a post about USV's thesis-driven approach to investing. We also updated our About page. There is a section called How We Operate that I love. I have had a lot of conversations lately about why I joined USV and why I think it's such a unique place. I wrote about my relationship with the firm over time, but that was only part of the story behind my decision. The rest is encapsulated by this tweet that Andy wrote:
All of these attributes are very important and unique, especially for Founders that choose to work with us.
To me, the beauty of venture capital is about the alignment between the investor and the entrepreneur. Managers of small funds make money the same way founders do, and there is something very romantic about this and it deeply resonates with me. Small funds like USV can deliver venture scale returns through concentrated investments in early stage companies. By design they are required to focus on Series A and seed. This is exactly where I like to focus because as a Founder the investors I partnered with at this stage were the relationships I cherished and found most helpful on my journey. I don't think there is a perfect fund structure in venture capital. There are many ways to do this and firms have been successful pursuing different approaches, but small funds are my strong preference and I think create the best alignment between entrepreneurs, fund managers, and LPs. Fred has written some excellent posts about this here and here.
Thesis-driven investing is important because it reflects that you know who you are and what you stand for. I also think it's also an entrepreneurial style of investing because you are painting a picture of how you think the world will unfold over the next 5-10 years and what you want to happen, and then strategically using financial capital as a tool to realize that vision with like minded entrepreneurs. A strong thesis helps Founders understand how an investor thinks and what motivates them beyond financial returns. Being generalist means that we can maneuver across social applications, marketplaces, web3, fintech, health, education, climate and more. This enables serendipitous things to happen in portfolio construction and for people to transfer learnings across all these different areas. A lot of the most compelling and exciting opportunities happen at the intersection of different fields and being generalist equips you to play at these intersections, which are often at the edge.
It was very important for me to join somewhere where partners work together as a collective. USV has long prided itself on being an equal partnership. I think this is the ideal model that creates a set of aligned incentives across the firm, and I fervently believe that incentives drive behavior. When there are no politics or people vying for a bigger slice of a pie, magic happens. When things are done collaboratively and equally, everyone roots for each other and the only winner is the team. This means that everyone is all in on every investment because everyone has a meaningful and vested interest in the success of a company and entrepreneur. When people work with USV they get the whole firm and that is quite rare and special.
Andy's tweet was less than 280 characters but it is loaded with meaning. The implications of these defining characteristics determine how the firm works and how an entrepreneur experiences USV, and they're one of the major reasons why I'm here today.
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