My partner John has a post up on USV this morning talking about our new fund, USV 2016, which we quietly raised earlier this year. We added our final portfolio company in USV 2014 last week and we are making our first investment in USV 2016 this week, led by John. In John’s post he addresses some changes we are making at USV, most notably the elevation of Albert and Andy to managing partners of our firm. This role has been held by Brad and me since we started USV in 2003.
This sounds like a big change and in some ways it is. Andy and Albert are the future of USV, at least the near term future. They have been providing this leadership role for a while now but it is time to formally acknowledge it. John, Brad, and I remain actively involved in making investments, managing investments, and driving our investment strategy. We all plan to make investments in the 2016 fund, as John is doing this week.
The VC business is a long term game and VC funds have a long time horizon, ten years in most cases, but generally they get extended for a few years more as it takes a long time to liquidate these funds. We are on our second extension on our 2004 fund and I doubt it will be totally wrapped up until the latter part of this decade. What this means for a venture capital firm is that you need to anticipate succession on a longer time horizon. At some point, Brad, John, and I will not want to sign up for investing a new fund. But well before that happens, we need to establish the new leadership at USV and start building the next generation. We have done the former and at some point in the next several years we will start thinking about the latter. Again, we are doing all of this over a long time horizon as is appropriate for our kind of business.
When Brad and I started USV, there were a bunch of things we did not want to do. One of them was stick around too long, taking too much carry, and holding on to too much control. We have seen so many VCs do this at the firms they started and we did not want that to happen at USV. With this change, we are showing ourselves, our partners, and our LPs that we were serious about that.
What we are not doing is retiring. I know there are rumors out there that I have retired, I am retiring, or I will soon retire. I don’t really care about them and have ignored them for the past year or so. But our portfolio companies hear them and it bothers them. And I understand that. So rest assured, I am not retiring. I am handing over the keys to the car and getting into the back seat. It feels good. And I am so excited to see where Albert and Andy drive the car. I know it will be to amazing places. It already is.
Godspeed USV 2016.
Are you……a back seat driver, or…a “are we there yet” kinda guy?And congrats to Albert and Andy. Couldn’t have happened to a nicer couple.
I am a back seat driver. I need to work on that
I think of vision as – to look out of the back, and figure out where you should be going.Whether that’s merely reminiscing or being visionary is an issue of passivityBut generally you need to have been places to know what other places might look like – this can make you a good co-pilot / navigator
Couldn’t you be the windshield wiper who makes the views easier to see?
there’s no future in that.
FRED:Those being chauffeured always were decision makers.
Just be careful, your driver might rate you 3 stars then!
JimHirshfield:”couple”?Are they in a relationship?Six up votes we are late to the party.
Aren’t we all in a relationship?
JimHirshfield:some more than others.Business relationships are like dating without a commitment. You are able to back out anytime. A personal relationship is more complicated because your intimate secrets are secrets no more.https://uploads.disquscdn.c…
Word to the wise – don’t look to Africa for wisdom on sustainability.
thebigmix:Appreciate your revelation. Your historical handicap is duly noted. There appears an inability to look beyond the tip of your nose. You had to misunderstand our reply. Sustainability wasn’t being addressed. (Anthropology course will assist in the revisionist view of African history and not the current exploitation of resources and corruption currently occurring on the Continent of Africa.)No reply required.
Let me know when you arrive on the dark continent, I’ll buy you a beer and we can chat about history and any revisions you may like to make.
What exactly is a “Are we there yet” kinda guy ?
Antsy, impatient, eager, bored, easily distracted, and typically ~7 years old.
I get the impression from the post below that he drives VC firms better than he drives cars. But whatever seat he’s in, adventure awaits.https://gothamgal.com/2014/…
“Freddy is My Co-Pilot”, hahahaha
It’s a good thing my husband does not blog.
Having read World after Capital a few weeks ago, and elevating the author of those ideas to managing partner, USV is most definitely in a league of its own. Can’t wait to see what’s being discussed in 5 years. Not that today isn’t interesting 😉
Such a thoughtful and though provoking book – USV is indeed in good hands.
Congratulations – if you keep your word it becomes worth keeping
So what does retirement look like Fred? Seed investing? lol Somehow I can’t really imagine you retiring per say.
Does being in the back seat mean you might be able to achieve that work life balance thing or just that you’ll fill up with new projects?
I’m sure it feels great to announce something that has been planned for a while, and is playing out exactly as you wanted. Good planning!
Congrats. It’s been some run so far hope that it continues.
Congrats.Question: Does it ever happen that the investors USV takes money from get upset or confused because a portfolio company exits but it was funded with other money than where theirs was allocated for? Just wondering whether this is even a thing.
That can’t happen because each fund that a VC firm raises pools the money together from all investors and profits are distributed proportionately after fees. I don’t think venture funds can allocate investors’ money disproportionately since the money is pooled.
hm. thanks but this is a different point.The question wasn’t around whether or not profits where evenly returned.It was more about if one company is funded with money from fund a, whether investors in fund b ever got confused or not about whether the the company was funding with their money.thanks.
But maybe a little of this too.
Tom Labus:is photo you posted of the lake the view you actual see?
Tom Labus :Amazing view. Would not desire another winter ever in our lifetime. We endure three months of intense heat for seven to eight months of the best weather in the country with no snow (Two hours away), hurricanes or tornadoes. The Caribbean is the only climate we would dare switch.
remain remain! 🙂
Is this a Fredxit?
retire (the concept of) retire
Le roi est mort, vive le roi!
USV continues to set the bar high in every single thing you do. Inspirational and all around awesome. Thankful to know all of you!
Sounds great! A very basic question (no finance background) – can one invest in any of these funds as a member of the public?
Only if you are an accredited or qualified investor (SEC rules) and if we invite you to do so which we generally don’t do
My invitation must have been lost in the mail.
Thanks for clarification. I shall revert to plan B – everything on black 😉
Would be an interesting blog post to discuss exactly the situation surrounding those invitations and in particular the reasons a fund doesn’t accept just anyone. (Otherwise what you said sounds a bit madoff..)
Good luck. I find that if you hang it up and truly “move to Florida” at our age you tend to die.
Morbidity always perks me up in the morning.
Either way you’re in the role of helping those you’ve invested in reach their full potential. God bless you, Fred!
I don’t spend a lot of time hanging around VC’s offices, but USV is hands down my favorite, and it’s good to know that it’s going to remain a good place to hang around going forward.
There’s a Dos Equis meme in there somewhere. “I don’t often hang out at VC offices. But when I do, it’s at USV”Cheers.
Fred, I don’t know the magic trick to creating organizations that work and fly on their own, but I do know it’s really difficult and will be watching your example. We live in an age where the media spends all its time lionizing pilots, but I think the pilots would rather have the media focus on the good airplane the pilot built.
Yikes. Now I wish I bought a car with back seats…..
Humblebrag ’cause you drive a Ferrari?
You have an SUV as your daily ride and a 2 seater for weekends.
YES!! How did you know that I have a bike-built-for-two?
Rainbow ribbon on that bike?
Like This ? Funny, I was just watching this song earlier this evening.
no, not my meaning at all – as a 5x start up CEO, i just don’t have “back seat” genes….
This more your style?https://i.ytimg.com/vi/uHYs…
All i can say Fred is good, you should follow your head and heart.
Congratulations to you and Brad. You both deserve this shift. The two of you set a new standard for not only performing well but creating a firm that lives out its values. We all can’t wait to see where Albert and Andy take the car.
.I would have expected the car to be driverless.A thoughtful move. Don’t worry, you’re not capable of retiring. When you think the deck is clear, another ship comes by and you get on.JLM
You’ve made some outstanding picks in the last 13 years… I believe Andy and Albert are probably your best 2
With the number of large new funds that have been raised over the past few years, and the duration of any single fund and it’s investments being close to 10 years , how is it possible for a venture-capital bubble to burst over the next five years?
Does this mean I can still count on getting mentored by you soon since you have always been the VC of my dreams?
congrats to all
Good luck pal.
damn i always thought if USV was the spurs you would be kawhi. but now it seems that you and brad are probably tim duncan and tony parker and albert and andy are kawhi and lamarcus. hope for the sake of this analogy there are some LPs that can be likened to pop and rc buford
John is Manu
btw amazing trade for the knicks, d rose + carmelo + porzingis will be lethal. haters gon hate but d rose still has plenty of game. looking forward to knicks cavs ECF next year
The Bulls continue to do what they do best, destroy basketball teams because management can’t get along with a good coach.
I find it bizarre when successful firms don’t tend to generational management carefully. If a VC has done well in a firm, it should be a moral obligation (among many) to carefully protect the brand and institution for the LPs.
I tried retirement once. Failed miserably…
Oh, wow! Should not be at all surprising… a few Oreo tells along the way… but still a mild jolt. Exciting nonetheless. Congrats to all!
This is great news, hopefully will still be going to events like Techcrunch disrupt etc?
There is no question the firm is in very good hands. Albert and Andy are very special investors and people.
I have been lucky enough to spend more time and work with both Andy and Albert and I am more excited than ever for the future of USV !
This sounds great, expect all will work out well in the back.A long time ago, in my earlier engineering days we used to code together – pair programming. Now it’s evolved into code reviews and pull requests for async development. One guy drives (types) the other scans and discusses. The back seat always gave a broader perspective, the operator always had a tight feel of the tactics and execution. You might see deeper or further than you ever had as a driver.Best of luck to you and the USV crew.
yet another example of how you/USV show the industry that – despite so much noise to the contrary – a successful VC firm actually can be managed with transparency and integrity and camraderie. thank you gents