The Story Of The NY Times Story
The NY Times business section has a short profile of our firm, Union Square Ventures, calling us "A New Kind Of Venture Capital Firm." I thought you all might be interested in how this came about.
A couple weeks ago, the reporter, Claire Cain Miller, sent us an email saying she’d recently joined the Times (from Forbes) and had the VC/startup beat and that she was in NYC for a while before heading to the west coast. She wanted to come by and meet us. We thought that was a good idea and invited her in.
By the time we had gotten around to finding a time, Claire had decided a "profile" of our firm would be interesting. That made me and Brad a bit nervous. The last thing we needed was a puff piece saying we were the best VC out there or something. I’ve had that story written before and when it turned out not to be true, I’ve had it rubbed in my face.
So we talked to Claire and emphasized that we wanted to talk about how we do our work rather than our place in the VC pecking order. She agreed. We invited her to attend our monday meeting (everything we said was off the record) and she spent an hour or more one on one with each of the three of us (me, Brad, and Albert). She apparently talked to Rob Kalin who gives me more credit for Etsy’s tagline than I deserve. And I saw Claire at the web 2.0 conference where I delivered a keynote last week.
I like the result very much. I think she got what we are trying to do and it’s clearly very complimentary. Since there doesn’t appear to be a comment thread on the NYT article, please feel free to tell us what you thought here.
I just read the article and it brought me here. And there’s an email in your inbox with a presentation!
here’s the note i added when i shared the nyt article with my google reader friends – ““fred wilson has impressed me three times this week. he wrote a great post on a vc, about bringing advertisers into your “stream” with targeted messages, his keynote at web 2 expo (available on yt) and now this nyt article…”great stuff.
Smart story for USV and sound strategy for focusing on what the company does moreso than who it is. In reality, the latter gets accomplished any way.But the timing is most excellent. As we follow the re-architecting of the financial markets, the article comes across as an oasis of hope of old-school capitalism: a focus on entrepreneurialship and growth.
Great stuff. Reading about your business model of nurturing new ideas and small companies always get my eyes a little misty!
Love it.Summary: Union Square Ventures puts itself in positions of aligned interest with the founders of the early stage companies it invests in….and will reap the rewards!
You got one extra subscriber due to the article.Good read, very complimentary.CheersSahar Sarid
Great article,. Very accurate. Been reading AVC for years and usually hope that people don’t believe their own press. In this instance I think she totally got it so it’s okay if you do believe it.
The article, without explicitly saying so, made your firm seem very down to earth. A good thing.
phew. that’s another lesson i’ve learned the hard way. stay humble, particularly when others want to toot your horn
Given the quote: ““I waited as if he was a very good-looking girl,” said Fabio De Bernardi, a London entrepreneur who slipped him a business card and hoped to pitch a shopping site. ” you are pretty much obliged to invest in Fabio’s company (Veedow.com) I would have thought – well at least you’ll get flowers and chocolates at board meetings 😉
Well deserved ink that conveyed your philosophy and approach. I started reading your blog 4 years ago to learn more about how technology could benefits non-profits. Please sponsor another “Hacking Philanthropy” meeting!
Brad, Fred, & Albert – Great story today. Thanks for being the ones to break new ground in a market that very much needs more visible leadership. Keep up the good work.
Fred, great piece.Having been following you through 2 degrees of separation for a decade now…(Either you or Jerry directed me towards a job at Zagat back 1999 (no comment), I worked at Vindigo (when will Vindigo come out for the iPhone??) and I spent 3 great years at Meetup.)…I can honestly say that I thought the piece was a shade too humble. The approach you take to investing is unique in New York City and should be recognized as such. Keep up the great writing!Peterhttp://www.FlashlightWorthy…Recommending books so good, they’ll keep you up past your bedtime. 😉
chicks dig VC’s so I am considering a move to this industry
you are in it already howard, as evidenced by all the facebook pokes you’ve been getting!
i am a poser….you are a deserver
that’s bull and you know it. stop posting baloney in my comments!
Congrats. Great piece but link to the classic wallstrip interviews to catch the real fred
I thought the photo atop the article was a great fred wilson photo. now if we could only find a good howard lindzon photo.
That aint happening anytime soon
@Danvers, thanks mate! I spoke with the reporter for 5 minutes and she scribbled everything I said… and then I see only that quote!! At least it made me laugh!Fred, you’re quite a good looking boy though… 😉
Yeah, that is the line that sticks in your mind after reading the piece. It conveys great feeling. What it’s really saying is: “Fred’s a rockstar.”
I am not at all comfortable with that label!
I stumbled upon the article on Sunday. Great piece, congrats.
Great article – congrats to the whole USV team!
I hope the readers of the article will comment on the contrast between the ‘business as usual’ status of Union Square, which is what some might think of as a high risk field, and the status of the companies on the front pages of the Times business section this week, the investment banks and insurance companies.It strikes me as unfortunate what sort of risk our government is backstopping. This isn’t my field and I’m ignorant so I will pose this as a question: How many jobs did ‘credit default swaps’ create (in contrast to venture capital)?
Marty,Agree with your point completely. In fact, if you were to take the ~$1T bailout figure and ask yourself, as an investor, if this was the most productive place to allocate your capital, I’d be hard-pressed to say yes. Weird parallels with the urgency to invade Iraq shortly after 9/11 along the lines of “let’s do something, anything”Longer article here: http://mckinseytomainst.wor…
Very helpful article, I’ve enjoyed reading you for years but never really understood the difference between you and other VCs apart from your openess.Loved this little dig “Since there doesn’t appear to be a comment thread on the NYT article” 🙂
I think it sheds a positive light into the greedy 20% owner-festations of Vulture Capitalism by making your firm out as a kindler and gentler just-5% ownership. Kudos in the endorsement from Etsy.
To be clear, we seek to own as much as we canWe just don’t draw lines in the sand which only serve to take away opportunities from us
Good point to clarify :)I’d hope most people understand the business well-enough to know that it’s not “USV will give me $1M for 5% whereas VC-x will take 20% for that same 1M”; otherwise, you’re going to be even more flooded with submissions!I know rafer called BS on them publishing that number, but I think it was relevant to the point of smaller and earlier investments, and to your point of being flexible in order to engage an opportunity.I really enjoyed the piece, congrats!
Then that runs contrary to the title and content of the article ” A New Kind of Venture Capitalist Makes Small Bets On Young Firms”. The article seems to state implicitly that USV will be the mentoring, good VC firm in exchange for 5% and not the 20% that the VC-misers clamor for. That was what made Etsy happy and the example they provided is 1MM plus 2nd round financing. That paints the warm and fuzzy for USV.
The point i was trying to make is that they invest less-for-less, that is, less money for less equity.Proportionately, you may be getting the same valuation and terms, but if you don’t need a huge amount of money out of the gate, you’re better off not giving up a huge amount of equity from the get-go either. Combine that with the benefit of working with Brad, Fred, and Albert, and they’re likelihood in participating in future rounds, and I’d say it is a pretty strong position for a young company to get into.
That will also bode well for USV from risk management perspective too. If the startup tanks, then USV will not lose as much equity. they will be able to hedge their risk around other investments and spread out their equity. Smart investing in these troubled economic times.
I didn’t see Scott’s post.I’ll look for that, he’s right of course
Fred, as a long time fan I am happy to see you get some props in NYT. There may be more VCs emulating you which may not be great for you (incerased competiton) but it is good for the entrepreneurs. They may copy your investment model, but they can’t copy your DNA. So I don’t think it is a problem for you either.
I saw the article on Twitter, it’s a pretty good piece. I think the VC industry has many things that are broken and some firms are trying to fix that and you’re one of them, and the article shows that.I also quoted this in my Tumblog: “The last thing we needed was a puff piece saying we were the best VC out there or something. I’ve had that story written before and when it turned out not to be true, I’ve had it rubbed in my face. ” and added: “That’s some wisdom right there. Most people (including me) would kill for a puff piece in the NYT, but Fred’s smarter than that.”
What I liked best was your focus on a product people would use rather than a revenue model, which can often be an exercise in wishful thinking. There’s almost always a way to make money from products people love to use.
One thing that I got out of the article was how you strike a balance between the interests of entrepreneurs and your investors. I am sure they must conflict at times.
I believe entrepreneurs and their companies are our customers and ourinvestors are like shareholdersThat point of view tends to clarify the mind in times of conflict
I came here from the article too, and now I’ll add you to my RSS feed and begin to read what you have to say. We were attempting to stick with only angel investors for our innovative web startup, but your VC sounds very appealing.
Fred – awesome piece….congrats.USV in Sept & Mets in October……A nice run.Mazels.Andy
Great article Fred. The firm came across as real. It’s fatal to get caught up in your own press and I think you guys nailed it. Congrats.
The article ran on the cover of the business section in my local paper in Bend, Oregon. That was was interesting, having been along term reader and fan of social media even though they frequenlty run something from the NYT’s wire. It’s still kind of amazing to think all the places and countries content on those wires gets printed.3 comments out of 42 so far in this comment stream explicitly say they came to the blog because of that exposure. Mainstream media isn’t dead yet, but the conversation is also here and not on the NYT’s site. I wonder why the newswire distribution networks don’t hire an editor to pull out interesting content from the blog stream and put it into the old feed that ends up in local papers?I liked the article too and it was down to earth. Your comments Fred seem more interesting in trying to navigate both your industry and existing connections with ‘puff piece’ main stream media coverage. I’ve always thought USV was a differentiated more ‘original thinking’ type of firm and it’s nice to have the validation, even if Nassim Taleb says otherwise.
Another thing I’ve noticed too is that I don’t read blogs every day, so my comments are frequenlty a little behind in time. If you examined the posting time of comments, I’d bet you’d see a Long Tail on this blog. I bet it would be a very different ‘comment / changes over time’ graph for pages on Wiki’s though.
Not to beleaguer the point but the title and the theme of the story is rather misleading and it has been bothering me. Here was another blurb from the NY Times Web Page “…Claire Cain Miller profiles a new kind of venture capitalist who makes it big through small bets on Web start-ups.” This seems to imply that USV is making small bets that paid off. Not hardly. The reality is that the small bet is only with Etsy and probably a handful of other startups that nobody’s heard of and they haven’t been sold yet so the payoff is still to be determined. The article indicates Delicious, FeedBurner and Tacoda were sold but it doesn’t mention the equity stake that USV held (my guess is it was a lot more than 5%). So I think the title of the article should be aptly named “VC’s small bets that could payoff”. But all this could be a moot point because I am not privy to all USV investments and equity stakes and everything that I do know is what I read in the article.
here’s the data you are looking for Wallywe owned less than 10% of FeedBurner when it was soldwe owned about 15% of TACODA when it was soldwe owned about 12% of delicious when it was sold