Posts from November 2016

Some Thoughts On The AVC Community

The community here at AVC is possibly it’s greatest strength. But like most things, it is also it’s greatest weakness.

Over the past five years I’ve gone from the most active community member, to a regular participant, to an observer, to an avoider.

I wrote yesterday’s post for an entrepreneur (and every entrepreneur) who wanted to know what the Trump election means for startups.

As I wrapped up the post, I thought very seriously about closing the comments because I knew what they would become. But I didn’t do it. Because that’s a slippery slope. What is the bright line test for when I should open comments and when I should close them? Frankly I’d rather just shut them down rather than turn them on and off whenever I randomly feel like I should.

But I cannot accept the behavior that goes on in the AVC community whenever politics, or gender, or race, or taxes, some other hot button issue is raised, either by me or by the community when a thread gets hijacked and goes astray.

There is a lack of respect. There is a lack of civility. It makes me crazy. So I just skip the whole damn thing.

But I am enabling this behavior because I choose to make AVC a community instead of just a blog. So it is on me that AVC turns into a cesspool some days

As you can tell I am struggling what to do. I’ve thought about banning certain long standing members of the community. But I also don’t want to censor people. They should censor themselves though.  That’s the problem. They can’t

So that’s where I am. Fed up to my eyeballs and pissed off and struggling with what to do.

If nothing else, consider this a warning. If you don’t police yourself, the community here will be history. There is a very big piece of me that wants that to happen.

#Weblogs

What Does Trump Mean For Startups?

I got this tweet around 11pm last night:

Clearly the news that Trump will be the next President of the US is creating all sorts of financial jitters in the US and around the world this morning. There is a ton of uncertainty right now as many investors, me included, were not expecting this outcome. If there is anything that investors hate, it is uncertainty.

For me the best framework I have is Brexit. I feel that the economic and societal unease that has been brewing in much of the developed world over the past decade is coming home to roost and I believe that we will see more “brexits” in the coming months and years.

I wrote this right after Brexit:

But more than that, going into a foxhole right now seems like the wrong idea. Some of the best companies have been created in times of great economic turmoil. And, because of that, some of the best venture capital investments have been made in times when everyone was risk averse. I am not for getting too excited when times are good and I am not for getting too conservative when times feel bad. I am all for looking for opportunity at every turn.

I am certain that USV will continue to invest capital in interesting startups. While the financial markets may be in for a tough time, possibly a prolonged tough time, there is no correlation between startup success and strong financial markets. And those investors who understand that will act accordingly and be rewarded over the long term for doing so.

For entrepreneurs, this means be cautious and maybe even a bit conservative while all of this shakes out but don’t panic and don’t confuse uncertain times with a lack of opportunity. If you were excited about your business yesterday, you should be excited about your business today. But don’t be blind about the macro environment you are operating in. It’s going to be choppy for a bit here.

#entrepreneurship#policy#Politics

Voting On The Blockchain

Blockchains are good at many things that require security, accountability, and rules.

Voting is one of those things.

I don’t expect that we will see Presidential Elections on the blockchain any time soon. Though it could happen in my lifetime.

I do expect that we will see voting happening on blockchains for organizations and efforts that are getting started now and want to do their governance in a modern way.

There is even a project called Tezos which is a blockchain with governance (ie voting) built right into the core protocol.

Imagine if every voter was issued a token/coin and every candidate/issue to be voted on was issued a wallet. Voters send their coins to whatever wallet they want to vote for. And there you have it, a secure, accountable system for voting on a blockchain.

I haven’t placed a vote on a blockchain yet, but it’s so simple to do that I expect I will be doing it frequently soon enough.

#blockchain#Politics

Founder Dilution

I saw a blog post this weekend that looked at the IPO filings of 79 tech companies and calculated the ownerships of the founders and the VCs at IPO.

The result of that analysis is that the average founder ownership at IPO was 17% and the average VC ownership at IPO was 56%.

I’ve written a bunch on this topic and here are two posts that address this exact issue:

Founder Dilution – How Much Is “Normal”?

Employee Equity: Dilution

In both posts, I lay out how the equity gets shared with employees and investors as the company grows and scales.

Here’s the most important quote from those two posts:

In my experience, it will generally take three to four rounds of equity capital to finance the business and 20-25% of the company to recruit and retain a management team. That will typically leave the founder/founder team with 10-20% of the business when it’s all said and done. The equity split at 20% for the founders will typically be; 20-25% for the management team, 20% for the founders, and 55-60% for the investors (angel all the way to late stage VC).

I wrote that seven and half years ago, but on this topic, not much has changed over the thirty years I’ve been doing VC.

Raising round after round of venture capital is expensive. There are some entrepreneurs who figure out how to get profitable and not raise round after round (or avoid VC altogether), there are some entrepreneurs who are able to raise a very high valuations and avoid a lot of dilution, and there are many entrepreneurs who choose to sell the business before they take a lot of dilution. But for the entrepreneurs who raise four to six rounds of VC before going public, the math is the math. If you end up owning more than 20% at IPO, you are beating the averages.

#entrepreneurship#VC & Technology

If You Need A Drink After Voting

If you are like me, you might want to celebrate the end of a shrill and divisive election season with a stiff drink or a strong coffee.

And our portfolio company Foursquare has the exact tool you’ll need to do that.

Go here and enter your home address and Foursquare will map your voting place and bars, restaurants, and coffee shops nearby.

Here is my map:

foursquare-votiing-map

I plan to vote bright and early on Tuesday morning and then head to one of these many excellent choices for my morning coffee.

And, whatever your political orientation, I hope you go out and vote on Tuesday.

#Politics#Uncategorized

Cubs, World Series Champs

I’m back to photoblogging and this post is easy.

cubs-hat

I’ve been a Cubs fan for the past month. It’s been a lot of fun to root for a fantastic team and I could not feel better for Chicago and Cubs fans everywhere right now. Well done Cubs. World Series Champs.

#Sports

Kickstarter Live

Live video broadcasting is happening all around us. From youth oriented services like our portfolio company YouNow to the largest platforms on the Internet like Facebook, YouTube, and Twitter, people are turning their camera on themselves and “going live.”

So it makes sense that crowdfunding platforms would embrace this trend. The leader in doing that is, not surprisingly, our portfolio company Kickstarter which tends to be the innovator in the crowdfunding sector.

Kickstarter rolled out their Live offering to all creators yesterday after testing it out with a handful of creators over the past few months. I like this bit from Kickstarter’s blog post announcing this new feature:

The key to Kickstarter Live is its intimacy. It brings creators and the people supporting them right into the same room together. And it encourages personal connection. Viewers can ask questions, chat, send selfies, select rewards, and back the project — all while tuned in.

Going live on Kickstarter allows the creator(s) to connect with their backers and potential bakers in real-time, answer questions, demo the project, and generate enthusiasm for the project.

Here are some projects that went live on Kickstarter yesterday:

You can follow Kickstarter on Twitter or Facebook and get alerts when creators go live. It’s a fun way to connect with creators, learn about their projects, and back them.

#crowdfunding

Paul Klee

If you haven’t noticed, I’ve taken up photoblogging this week. In an effort to inspire my daily posts, I am turning to my phone’s camera roll and finding a photo I took recently and using it to anchor my post.

The weekend before last, the Gotham Gal and I went up to the Met Breuer to check out a show by Kerry James Marshall that had gotten glowing reviews in the NY Times. Sadly that show was not yet open (why write about a show that is not open?). But happily, the museum had their collection of Paul Klee paintings on display.

klee

If there is one painter I would love to own a painting by, it is Paul Klee.

The wit and wisdom in his work lines up with my taste just perfectly.

I use his “Twitter Bird” painting as the background in my Twitter profile and have been doing that for as long as I can remember.

It’s not quite like owning a Klee painting but it works for me.

#art