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.

We were hanging out with friends last night and one of them asked me how many investments I have made this year. I replied “one so far.” He said, “you are not very active.” and I replied “I do one to two deals a year and always have.” Which surprised him.

I have been investing in early stage companies since the late 80s and over those thirty plus years, I have personally led investments in about sixty companies. An average of less than two investments per year.

Our firm usually makes eight to ten new investments per year, which is one to two new investments per partner per year.

When you are making early-stage investments, which require a lot of your personal involvement over a seven to ten year period, you can only take on so many projects.

If you assume the average hold period for an early stage investment is seven years and if you make one to two investments per year, you will have between seven and fourteen portfolio companies to manage at any one time.

The low end of that range is quite manageable. The high end of that range is not. I have been there.

I believe that early stage venture capital done right is a service business in which the entrepreneur and the company they started is our customer.

We need to be able to service that portfolio company properly and that requires bandwidth at the partner level plus a team around the partners that can provide additional support.

And so that means managing the investment pace tightly and saying no to most opportunities that come in and being really committed and convinced about the projects that we say yes to.

And so that is what we do at USV and what I have done my entire career.

Doing this well is hard. Because if you only make eight to ten new investments per year and expect to produce at least one billion plus exit each year, something we have been able to do every year for almost ten years now, you have to have a pretty high hit rate on super early stage investments.

Our approach to making this work is an evolving thesis that tells us what to invest in and what not to invest in, rigor and collaboration in our decision making, and real substantial value-add post-investment.

This is not spray and pray, this is not following the herd, this is not momentum investing.

This is thesis-driven, active early stage investing, which has always produced the best returns over time and I believe always will.

It seems like yesterday when a bunch of folks in the NYC tech sector decided that it was time to form an organization to represent the tech sector in NYC.

But in fact, it was a little more than two years ago.

There was some upfront work we had to do and in the summer of 2016, we announced Tech:NYC.

Two years later the organization is 630 member companies strong, including over 500 small early-stage companies.

Yesterday, Tech:NYC issued their second annual report, which is just one long web page.

I really like this way of doing annual reports. It’s easy to consume and accessible to anyone with a computer or mobile phone.

If you are involved with or care about the tech sector in NYC, take a minute to read the annual report (it won’t take much more) and see about all the great things that are going on in NYC’s fastest growing economic sector.

And if you aren’t a member yet, you can join our email list at the end of the report and start hearing from us, which hopefully will lead you to join.

I’ve been chairing a $40 million capital campaign for NYC’s CS4All effort to bring computer science education to every school and every student in the nation’s largest school district.

We are just into year four of the ten-year CS4All effort and we are also into year four of the capital campaign.

The good news is I can see the light at the end of the tunnel. Depending on whether you count “soft circles” or not, I think we have about $10 million left to raise.

We started out with a bang, announcing $11.5mm in contributions, including those of my wife and me, at the start of the effort.

Year one went well, with another roughly eight million raised.

Year two was a struggle and year three started out similarly. We made some changes to our team and strategy and message and the second half of year three was much better and we are entering year four with great momentum.

I have learned a lot about running a capital campaign or any sort of large and long fundraising effort and I thought I would share some of the big lessons:

1/ You have to be patient. It is a marathon, not a sprint. No matter how much you want it to go quickly, it won’t.

2/ Cultivation is the name of the game. You have to work the top prospects slowly and carefully and patiently. Most eventually come through but you need to invest a lot of time and effort without any certainty of closure. I found this particularly hard as I always want to be investing my time where it is going to pay off.

3/ You need people around you who are experienced fundraisers. There is an art AND a science to qualifying, presenting, and following up that the best people in the fundraising business understand and bring to their work. Without that, you are going to flounder.

4/ Communicating and engaging your donors is critical. I thought a donor would write one check and be done. It turns out many donors like to start small and grow their committment over time as they see progress and get comfortable with the effort.

It turns out that raising a big sum of money is like a lot of other things in business and life. Slow and steady is a virtue, great people make all of the difference, your best prospects are the people you have already closed, and frequent communication fixes a lot of problems.

I think all of these lessons I have learned in the last three years are applicable to raising capital for your business. Fundraising is a process not a campaign and it needs to be part of a CEO’s daily cadence and calendar.

You are never not raising money when you are running a company or any sort of business endeavor that requires capital, which is basically everything.

Last Sunday I wrote about the over the top video market and made some observations about it in light of the challenges we were having getting our satellite dish working again.

In the week that passed, we had another no-show appointment by DirectTV, more success watching whatever we want on our AppleTVs, and on Friday I called up DirectTV and canceled my re-install order for our beach house once and for all and we are now officially off of traditional “cable TV” out here.

After canceling our re-install order and shutting down the account we have had for twenty years, I paid for a Hulu and a YouTube TV subscription and checked out DirectTV Now.

I was surprised that DirectTV Now has no incentives for existing DirectTV subscribers to purchase it. You don’t get a reduced price or free access. I decided to pass on it and see if Hulu and YouTube TV get it done for me.

Finally, we went out in our backyard and got the 20-year-old satellite dish and tossed it in the garbage truck when it stopped by to pick up the trash.

It feels good to be done with the world of wires and set-top boxes and truck rolls and all of that. I won’t miss it.

I received a bunch of emails last week suggesting I listen to this interview with Vitalik.

I finally did and it was as good as advertised.

So I am now suggesting that all of you give it a listen too.

I got such a chuckle(s) watching this Kickstarter video that I immediately backed this project.

I love it.

I was at dinner with my friend Stephen a month or so ago and he was bending my ear about a provision in last year’s tax bill that provides very significant tax incentives to invest in businesses or real estate in certain locations around the US that have been underinvested in.

It all sounded way to good to be true and I kind of ignored him. This sort of thing has been part of so many economic development plans over the years that it sounded like more of the same to me.

We had dinner again last week and he started in again, but this time we were with some other friends and they chimed in.

It turns out the tax incentives are as generous as my friend said and what seemed to me to be too good to be true is in fact true.

These locations are called Opportunity Zones and here is a map that shows where they are located. I bet there are some near you. There are a ton in NYC.

Forbes has a long piece on how these rules came to be and how they work.

I have never been a fan of letting taxes drive my investing and I don’t plan to change that but there are plenty of good investments that can be made in these zones and these new rules seem like they are going to catalyze them.

When my life gets crazy, which it is right now, it helps me to internalize what is most important and triage around that.

And I’m not just talking about what tasks to do and what not to do.

I’m also talking about prioritizing friends and family, exercise, eating right, communicating, and all the things that at one time or another in my life I have let slide in favor of work.

The triage is visible to people, of course, and saying no can be challenging.

I saw some friends last night and they invited me to a thing they are doing in a couple weeks. They said “would you like to come?” I said “No”. My friend said, “do you mean you can’t?” And I said “I just mean I won’t.” He got a chuckle out of it but when I’m in triage mode, I can be curt. I am working on that but sometimes it is easier to just say no and leave it at that.

This blog remains a priority for me and I continue to be able to post something here every day, generate some conversation, and, at times, unlock something for myself and/or some of you.

If you are feeling swamped like I am right now, it helps to take a second to think about what’s most important, do those things, and say no to everything else.