At USV, we report to our investors on our portfolio and performance four times a year, once a quarter. We produce an audited report once a year, with our Q4 results.

We do that in writing and we also do a quarterly call for our investors three times a year (we combine our Q4 and Q1 calls since our annual audit process slows down our Q4 reporting).

In our annual and Q2 written reports, we prepare a short update on every one of our portfolio companies. We call these “one-pagers.”

This can be a fair bit of work but we do it regularly and have been doing it since we started USV.

I think it is a great discipline for investors to take the time on a regular basis to sit down and write and speak to their investors about what is going on in their portfolio and in the macro environment.

It is a time-honored tradition that fund managers write a letter to their investors explaining what they are seeing and doing. Warren Buffet’s letters are a particularly great example of that. But there are many fund managers who are excellent writers and whose letters get passed around and read by many in the investment community.

Everyone here at AVC knows that I think writing and investing fit like a hand and glove and writing and thinking out loud can make you a better investor.

The Gotham Gal and I are investors in a number of venture capital funds and I have noticed a trend among venture fund managers to reduce the amount of writing and verbal communication they do with their investors. I understand that it can be time-consuming and that many fund investors don’t even bother to read the reports.

But I would urge my peers to resist that urge and to take time to regularly sit down and write about what is going on in your portfolio companies and the markets you invest in. I think it provides insights, raises issues, and gets the entire investment team talking about things in a way that few other regular processes do.

Plus I really enjoy doing it.

#VC & Technology

Comments (Archived):

  1. awaldstein

    So enjoyed this.There is nothing like getting it down on paper.Ain’t easy but pays back in spades.

  2. kidmercury

    i hope your letters include some mention of hte behavior of your portfolio companies regarding this weeks extra fun topic — kook censorship. +1 for twitter, for while they may be shadowbanning conservatives, jack did at least come out to state that kook icon alex jones had a right to be on twitter and was not in violation of any of its terms, and even mentioned him by name. -1 to disqus for discontinuing service to infowars.some kooks are concerned, and while i’m personally a bit saddened because i had a naive belief that most technologists still had at some spirit of freedom and digital utopianism at their core, this is clearly vindication for many kooks, and proof that we are at the third step:1. ignore2. mock3. attack4. winit’s a great time to be a kook, and never too late to join the movement. #kookpride

    1. Richard

      If Political kooks really believe that the Russians influenced the election with 100k or so of fake bots and the like, how is it not possible for them to conclude that the current ban doesn’t also influence the election ?There should be a single test (similar to Brandenburg vs Ohio) for blocking. Does the Communication incite violence, is the violence immediate and likely.Shame on VCs for not speaking out. Is there any truth to to fact that tweets velocity are ramped up and down depending on the sender?

      1. kidmercury

        that big tech all decided to ban infowars the same day almost begs the question of whether or not they are trying to influence the election.but, this will all backfire. anyone remotely familiar with jones’ work should know that while they may find him to be lacking in logic, he is not inciting violence or doing anything illegal. at most, he is guilty of being wrong. perhaps big tech is immortal and thus fallacy is a crime in their world. or maybe they’re just afraid of the bottom up rebellion that is well under way.

    2. LE

      ack did at least come out to state that kook icon alex jones had a right to be on twitter and was not in violation of any of its termsI thought that was great as well (not that it’s anything to me actually) but I have to say that it almost sounded a bit in tone like ‘and just make sure you don’t go 1mph over the speed limit have a nice day’.In other words (from memory impact) it was more like ‘he didn’t give us a reason to axe him’ more than ‘freedom of speech’. Anyway the way I read it. Let’s face it it’s easy to violate rules and if someone wants to nab you they can hang their hat in a number of places. Much is subjective. It’s not math or physics.But yeah any step in the direction of ‘balls’ and not ‘corporate wimp out’ (ie get rid of John Schnatter because you foolishly believe you might loose pizza sales) is a step in the right direction.

      1. JLM

        .A private enterprise has no particular obligation to underpin free speech. That is a US Constitution Amendment No 1 thing. A private enterprise can print and publish whatever it wants limited only by libel for which they only pay damages if found guilty.JLMwww.themusingsofthebigredca…

        1. JamesHRH

          I think Twitter’s lawyers have told Jack that the Public Square defence requires him to support free speech. Anti-libel pill.

          1. PhilipSugar

            You know James I never thought about that. But it is a really good point.

    3. JLM

      .Alex Jones is an Austin boy. Back in the day, he was quite normal. He used to rail at the City Council a bit about the usual stuff when I was dealing with the CC on development issues. He was quite articulate and reasonable.I would often see him about the street in front of the City Hall – the Old City Hall, not the current New City Hall. We’d exchange pleasantries and chat. He and I were both friendly with a particular City Councilman and might have a beer or a coffee with him. Never just me and Alex, but only with this particular City Councilman.I came away from those convos thinking he was a smarter than the average bear and usually was on the side of the superior logic – remember, this was Austin in the really weird times.Somewhere along the way, he began to get into politics and UFO-type, anti-government stuff. He developed this red-faced, histrionic, loud, vein popping camera persona. Still, beneath it was this otherwise reasonable, smart guy.Even then, when I would run into him, he was quite normal and reasonable. He had already become the Internet provocateur that you see today, but he was still quite articulate and smart. The public persona was an act – not in a malicious or deceptive way, but he was on his soap box and that required him to speak a little louder and all the other shtick.Just the other day, we bumped into each other and spoke for 5 minutes. He was as normal and reasonable as anybody I have ever discussed politics and life with. We discussed whether Kavanaugh would get confirmed – consensus view: YES.I tell you this because the guy is not even remotely crazy though some of the stuff in InfoWars is pretty far out there. It’s a bit of a promotional act, I think. Who really knows?I think there is a great American tradition of kookery – one has to listen hard to find the bits that are not really wrong or untrue.There is some truly weird shit that has happened in the world. Some of the tinfoil hat shit is real.JLMwww.themusingsofthebigredca…

      1. kidmercury

        I first started following Alex because I thought he was a brilliant internet entrepreneur who understood digital media far, far better than anyone else. The LeBron of digital media.My only gripe is that he is not kook enough, and I believe he has simplified and emotionalized, to make up a word, much reporting in the name of spreadjng the message wider. Im not against that strategy, but i do think it has reduced the quality of his work. Of course, Infowars still light years ahead of mainstream media.

        1. Pointsandfigures

          He is a first class douchebag. Never watched his show but a lot of the stuff he pulls is way over the line. However, free speech is free speech.

          1. kidmercury

            If you’ve never seen his show yourself, you may be relying on misinformed viewpoints to base your opinions.But either way, the real point to celebrate is that over the past 19 years, Alex has gone from being ignored, to being mocked, to being attacked. There is only one step left…. #kookpride

          2. jason wright

            the media always cites its right of free speech. it never cites a general right to be heard. that’s its privilege, which it defends jealously from all pretenders, the ‘fake news’ screams we’ve been hearing (the tell) all too frequently in recent times. the asymmetry is offensive to democracy.

          3. JLM

            “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”The issue with the press is more multi-faceted than just free speech. Note the First Amendment to the US Constitution – it prohibits the Congress from both “abridging the freedom of speech, or of the press.”In fact, there is no “right” to free speech or freedom of the press. There is only a prohibition from abridgment of freedom BY THE CONGRESS. If one wants to suggest this is tantamount to celebrating and enunciating a right of freedom of speech and the press – as it is often described, then rock on.This is why the whole issue of what a social media company can and cannot do as it relates to content is really not a First Amendment issue. They are not the US Congress and can “abridge” all they want.JLMwww.themusingsofthebigredca…

          4. jason wright

            that’s a most natural approach, and wise.

      2. jason wright

        OK, so he’s cultivated a persona of publicity along the way, the ‘register’ if you will, for popular consumption, which is more about the media machine’s predilections than public gullibility (i hope). It’s all a show when mass communicating. I’m not familiar with Jones, but he’s clearly read the same playbook they all have.

  3. Jonathan Washburn

    I’d love to know if there is something standard to the one-pagers, how much of it is standard, does that vary widely by maturity of the company, and what things you all think are important to include?

  4. Andrew MacLeod

    Any particular recommendations for fund manager letters besides Buffett?

  5. William Mougayar

    If I take your money, the least I could do is report on what I’m doing with it. For a fund manager, regular reporting is healthy, and is not an option, in my opinion.

    1. jason wright

      i wish ICO culture (and regulation, where is it?) required this.

      1. awaldstein

        answer for retail people is simply not to invest where the information is not there is all.

        1. jason wright

          if the information is not there at all on what basis would anyone, retail or ‘wholesale’, invest?

          1. awaldstein

            if the information is not there you don’t. it’s that simple and many if not the majority of all ICOs are pre selling to insiders and funds regardless first. some are not transparent, many are simply unclear as well as the space is very very nebulous even still. i’ve refused to work with some that feel sketchy which is what investors should do as well.

          2. PhilipSugar

            To that I say: Amen!

          3. jason wright

            agreed. one wonders what filters some of these funds are (not) using in their decision making process if the majority of ICOs are able to pre sell. pre buying at a discount to the retail end is a red flag for me. if you caught it, do you have a view on the SEC’s decision to deny the Winklevoss twins an ETF?

          4. awaldstein

            can’t jump into that right now. busy day in process.

  6. A failing boutique VC firm…The comment I posted was…I posted back on…Question:”Why would a VC firm need a full-time software developer?”Answer:This is an exercise in futility as a boutique firm (Union Square Ventures) tries to compete with much larger VCs that are far more capable of vertically integrating.Yet again…Implicit Question:”Why should you Mr. Prospective Limited Partner park some of your cash with Union Square Ventures?”Answer:We will send you interesting material to read! Don’t worry your little heads that Union Square Ventures is boutique VC firm failing to compete with much larger VCs that are far more capable of vertically integrating.Comment:You are pointing out how large VC firms are apparently being remiss in this area of marketing their services to their clients. It seems to me that large VC firms will very likely heed this advice because it seems like good advice. Large VC firms can easily afford to pay highly skilled professional writers to help them put out brilliant copy ranging from warm folksy “Warren Buffetisms” to cold hard insightful analysis. Outstanding financial writers are “a dime a dozen.”

    1. fredwilson

      This is amazing. Thank you so much for sharing it

      1. Ch-ch-ch-ch-changes

        The other day you posted the following:”Change is the only constant. Fighting it is a losing proposition. Shaping it is the winning one.”…What Was, What Is, and What Will BeI thought that you were indirectly hoisting a white flag. In other words, I thought you had finally grasped the reality: the VC business here in the USA has entered the consolidation phase. What’s wrong with working for a large VC firm? You’d probably spend a lot of time taking prospective large investors out to lunch and regaling with tales about, say, GeoCities, Twitter, as well as the “ones that got away” like Airbnb. Successful rainmakers are very valuable.The longer you wait for during this shakeout phase, the worse will be the deal you will be able to cut for yourself and your team. In other words, the sooner you shut down Union Square Ventures the better it will be for you and your team.

    2. JLM

      .I live in Texas, Austin By God Texas.Freddie & Co makes the rounds of a few of the big Tx pension funds to raise money. He and I know some of the same folks at those pension funds.In my real estate days I never did business with any of them because I was filled to overflowing with other pension fund money and they were fairly late to the real estate game.I take a luncheon with one or two of them from time-to-time. My favorite spot is Gourmands in E Austin. Fabulous sandwiches served by feisty tatooed ladies in wife beaters. A very quiet and charming place. Used to be a biker gang joint before E Austin became gentrified. Concealed carry kind of place.The pension folk all speak so highly of your Freddie as to make me suspect he has pics of them with livestock. One, in particular, had a touchingly plaintive lament. Know what it was?The chap lamented that Freddie didn’t take enough of their money. I swear on your life. He said they would give Freddie as much money as he ever asked for.Now, me, I’m not much of a Freddie shill. But, I do like to see a nice spat out in the open. I don’t mind seeing somebody throw some gas on a fire. Bit more manly that way.First couple of times, it was fun, but now it feels more than a little creepy. Like Freddie stole your lunch money or something. Man the fuck up.Just my thoughts, friend.JLMwww.themusingsofthebigredca…

      1. LE

        My favorite spot is Gourmands in E Austin. Fabulous sandwiches served by feisty tatooed ladies in wife beaters. A very quiet and charming place. Used to be a biker gang joint before E Austin became gentrified. Concealed carry kind of place.It’s 11pm where I am. I should be watching Netflix. But no I read your comment and decide to check out the place. Then I see the ‘gentrified’ remark. From the street view it looks like some shitty neighborhood. So I go the extra step to check real estate in the area. Sure enough find houses in the 800k to 1.2m range (very quick check). Better even across the street from a few places pretty run down. Amazing.Anyway from the Gourmand website, love this:Your future rock star is welcome at Gourmands from 11am-9pm. They must be with you at all times and respect other patrons by using their 2 inch voices In these parts they call that ‘inside voices’ not that anyone ever says anything to mom and dad unfortunately.

        1. JLM

          .You could have bought the entire neighborhood for $30K a lot back in the late 1970s. Missed opportunity. Lack of foresight and balls.Today, it looks so damn obvious.JLMwww.themusingsofthebigredca…

    3. sigmaalgebra

      Maybe you are not happy with Fred Wilson and USV. USV is a venture capital (VC) firm.I suspect that on the whole over the decades, net, US VC firms have done a lot of good for the US economy. E.g., a lot of people really like Intel, Microsoft, Google, Facebook, Twitter, Disqus, Amazon and more, and IIRC they all received VC equity funding.E.g., personally I’m astounded beyond any understanding at a Western Digital 2 TB disk drive for about $60, 16 GB of DDR3 ECC main memory for $100, an AMD FX-8350 64 bit 8 core processor with a standard 4.0 GHz clock for now about $90, what is available in solid state disks, what is coming for much larger memories, non-volatile, nearly as fast as DDR3, 4, 5 and to be attached a lot like main memory, etc. You see, anyone in computing for more than a decade or so, especially two decades, compares with the past and is next to speechless in awe: E.g., IIRC one of the last IBM water cooled mainframes for some millions of dollars had one core and a clock of 153 MHz. E.g., when I was in an AI project at IBM, I was already doing daily upchucks at AI and to have something better stirred up and published some original applied math based on measure preserving transformations as in ergodic theory, etc. At first glance, my work made profligate use of computing resources. Some people mentioned that fact as a concern, but all such people right away wouldn’t go there, wouldn’t take even a half step, to say that the computing resources were too high. Why? Because computing per dollar was improving so fast that in a few years the resources needed by my math might be trivial. They were correct: Now for any at all serious application, the computing cost is nearly trivial. And with the memory and processor progress now, in a year or so the computing needed will be a nit on a gnat.So, VCs have been part of some astounding progress.I do have a gripe with nearly all the information technology (IT) VCs. The gripe is in two parts:(1) Long commonly VC Web sites touted that they were looking for leading edge, disruptive, revolutionary, …, technology for really good solutions for really big problems. Commonly those VCs also claimed to have “deep domain knowledge”. Okay, fine with me, boss. Let’s shake hands and get to work!(2) Even more commonly the IT VCs essentially uniformly and universally, “absolutely, positively”, feet locked in 5′ of reinforced concrete, flatly refused ever to consider any technology at all. They wouldn’t fund it, evaluate it, look at it, or even want to hear about it.I understood (1) — fine with me, boss. And for (2), in high end parts of US national security and in such parts of academic and industrial research, I’ve seen lots of technology very carefully evaluated. So, that, as in (2), the IT VCs would refuse to consider technology was a big surprise, an especially big surprise given (1). Moreover, seeing too many VC partners with undergraduate majors in history and MBA degrees (I used to be a prof in an MBA program), it was clear that “deep domain knowledge” was an outrageously funny thigh slapper.So (1) was nonsense, hype, flim-flam, strange marketing, likely something to get “deal flow” and some tutorials, close to the line of false advertising.The false advertising in (1) and the “bait and switch” of (2) cost me a lot of time and effort.Now I understand more about how IT VCs work. Fine with me. They can do what they want, and I’ll continue with my project.I see nearly no chance we would ever do a deal — by the time I have what they want, they will no longer have anything I want, and I’m really sour on having a lot of lawyers around, really unhappy about deal terms, especially about vesting my stock in a company I used to own 100% of, just terrified to report to a BoD, and highly concerned about their, to me outrageously arrogant, puffed up claims of “deep domain knowledge” and, thus, having to discuss new technology with them and get their approvals, e.g., for budgeting.For other IT entrepreneurs, I’d advise (1) pick and run a project assuming all the funding is from your checkbook and (2) accept the old Hollywood remark “Don’t call us. We’ll call you.”, that is, if your work has what some VC wants, then likely they will notice and call you.Besides, if you contact them, then they are too likely to regard your contact as from “over the transom” with apparently some scatological suggestions.One more: Some of the VCs emphasize that they want only “warm introductions”. Okay, I can get some introductions from some high level people, some famous in business. Alas, there is little chance that the VCs would know those people; indeed, they likely couldn’t get an impressive “warm introduction” to me, either! “Warm introduction” — outrageous, incompetent arrogance.Net, hopefully VCs will hold down on anything like false advertising and bait and switch; IT entrepreneurs won’t waste their time and the VCs’ time; VCs will get along with whatever it is they want to do; and IT entrepreneurs will get on with their work, maybe with VC funding or maybe not but at least without a lot of wasted time. So, if you don’t like some VCs, then just ignore them and get back to work on something you can do well with.

    4. Adam Sher

      A company like USV will stay relevant because LPs care about track record.Vertically integrated services aren’t a be-all-end all. Vertically ingerated service VCs did a good job of marketing themselves and relabeled “active management” or “alpha” as something else. You need some way justify spending a lot more LP money. At the end of the day, a VC is an asset manager, not an operator, and has limited ability to improve its assets.

  7. jason wright

    and after your investors have read your reports do they write back?

    1. fredwilson


      1. JamesHRH

        come on, 1 out of a 100?

        1. jason wright

          🙂 it’s my fault. i should have asked ‘how many write back?’.

      2. John Revay

        Or call

  8. Amar

    Writing down a narrative is worthy activity to all sides involved. It helps clarify thoughts, it brings a story line to the reader and even if the reader does not care, the writer benefits from the action of writing, editing and publishing.Sub-optimizing this is a good example of people prioritizing urgent over important just because the former is easily measurable than the latter.On a side note: I was so prepared to read a fun story from @JLM:disqus on “The art of writing” and Korea or large retail M&A. He must be busier than usual today 🙂

  9. FinTech Connector

    Transparency leads to trust. Clearly, your investors trust you already but the fact that you keep them in the loop in terms of the good and bad in your portfolio on a regular basis shows the quality of the shop you run.

  10. karen_e

    Storytelling. Tales around the campfire. Once upon a time, the Brothers Grimm. Reporting.

    1. JLM

      https://uploads.disquscdn.c…This is a secret company I founded and own. It is based on my experience sitting around a campfire in the Army in places like Grafenwoehr in Germany, up on the DMZ in Korea, in the jungles and other lovely gardenspots.I learned so much about life in those discussions.JLMwww.themusingsofthebigredca…

  11. LE

    This is exactly similar to what I told the investment firm that I use to manage a small stock portfolio.One day I noticed a trade using the online app. Nobody notified me about the trade (which was fine as that is the way it works) but I felt that it would be good for both of us if they simply communicated to me why they did the trade. The rationale. I was curious. I also mentioned (and this is really important) that it would be good marketing. After all I pay them a fee to manage the money so it’s important that they have some way to tell me that they are actually doing something for what they charge (and this is independent of results because after all when the market is going up it’s not as if you can easily judge results). So the purpose of the communications (I told them) was to allow them to show what they are doing in a way that made me (and other clients) understand their value. And that it would be well worth their effort (and much better than a newsletter).So they replied and said ‘actually that sounds like a good idea we will discuss with the partners thank you’.After a few months I got an email and it was exactly what I had asked for. It is now being sent to all clients for all trades just like I suggested directly from the investment manager.Here is one of them (with company names redacted):I wanted to let you know I placed 2 trades in your account and also share our rationale.I sold ________, and replaced with shares of _______. We’ve owned __ for many years and like their management but see __ continuing to struggle to grow and to improve their margins. We’ve begun moving on from __ for our clients. It pays a large dividend of 3.94% and is a stock I might keep for an income focused client but for you ___ seems like a much better fit. I also like that I’m replacing __ with a stock in the same sector, consumer staples. ________ has strong market share in beef, chicken, and pork which allows it to weather demand and supply shocks in a specific meat category better than less diversified peers. Protein-rich foods are in demand. They own the ____ brand too. While ___ dividend is small, 1.77%, compared to __, we see __ having much more growth potential.I think what any company can do is think along the lines of ‘is there anything we are doing for customers under the hood that they don’t know about that they should?’ Things that will make them feel we are earning what we are charging them? If so it needs to be in writing. And done in a way that doesn’t overload them to much but keeps them informed so they see value in the service.

    1. Vasudev Ram

      Nice. I like it. This is a little bit like the advice given about making presentations (or even, say, about chapters in a book):1. Tell them what you are going to tell them about (the introduction).2. Tell them about that.3. Tell them that you told them (the summary).

  12. LE

    But I would urge my peers to resist that urge and to take time to regularly sit down and write about what is going on in your portfolio companies and the markets you invest in.Peers = Competitors?I have to hand it to you I guess. I always stay away from giving any suggestions to people that I compete with. [1]And if you are referring strictly to the funds that you invest in then better to simply send them a private email with the suggestion is my thinking (for one thing they would probably really appreciate the actual direct feedback.[1] Chance of them doing it is small. And importantly it’s not in the category of something you need to police because it’s good for the industry in some way to avoid regulation.

  13. BillMcNeely

    Do you think investors are doing so to reduce exposure in court when investment don’t perform as expected?

    1. Adam Sher

      There is some of that. The major CYA is contained in the DD files and audited financials. Managers see monthly performance and could share that with LPs; however, it is not practical to meet again on a monthly to discuss nothing much. For long term investments, a quarterly meeting is often too frequent but it balances the fact that LPs may feel uncomfortable with annual updates because nothing else in their lives updates that infrequently. Managers also hold quarterly meetings as a form of sincere self regulation. There is also a very self serving reason, which is to share good news early because you will be raising your next fund soon.

  14. Pointsandfigures

    We do the same at a bare minimum. Plus regular emails. We also inform our LPs ways they might be able to help portfolio companies

  15. Jonathan Libov

    As an analyst I met many other analysts at other firms who didn’t and never had to write reports. That was confounding to me; I didn’t fully understand our companies and their markets until I was forced to sit down and write about them. Tedious as it may be it always felt invaluable.

  16. Em Dimytosh

    Hi Fred,Fantastic post, I agree wholeheartedly with your thesis on the benefits of reporting. The challenge is how to do it at scale without drowning companies in administrivia.Would you be able to share a redacted version of what your portfolio companies’ one-pagers look like? I work with an accelerator out of Waterloo, Canada and would like to see what best practices we could borrow from your group.Thanks very much Fred,Emily from Toronto, Canada

  17. Kelly Taylor

    Hey Fred,Love the post as usual.FYI – Chrome showing me this when I view the post by clicking on it from email. https://uploads.disquscdn.c

  18. Kabir Kadre

    It’s also a tremendous tool for novice investors to help develop their surface area with projects and teams that they are invested with.