The Long Game

Entrepreneurship and startup investing is a long game. It requires patience, resilience, capital, commitment, and much more.

But even so, the average life of a venture capital investment is seven to ten years. It is rare for it to go longer than that. But it can happen.

Yesterday marked the end of an almost twenty-year relationship between me and what was once a startup and is now a fairly large company called Return Path. We announced yesterday that Return Path is being acquired by Validity.

My former venture capital firm, Flatiron Partners, that has not been actively investing since 2000, made its final investment in Return Path in mid-2000. I joined the board shortly after that and have been working with the founder and CEO Matt Blumberg ever since.

In many ways, this company and this entrepreneur define my career more than any other. Matt and I stuck with this company and each other for almost twenty years and in the process built an incredibly trusting, supportive, and, ultimately, profitable relationship.

We had partners in this long game. Brad Feld and Greg Sands joined the board a year or two after I did and they are among my closest friends in the venture business now. And we have had incredible independent directors like Scott Petry, Jeff Epstein, and Scott Weiss. The management team has turned over something like a half dozen times in twenty years but a few leaders have stuck it out including Jack Sinclair, George Bilbrey, and Ken Takahashi. All of these people are responsible for an incredible journey that I have gone on for the last twenty years with this company.

Matt and I have been through a lot together. We had a least four or five near death experiences when we should have lost the company but did not. We had a deal to sell the company fall through the night before the closing. We sold lines of businesses, we bought lines of businesses, we did several large reductions in force, we did several big expansions. We hired and parted ways with many executives.

Through all of that, we celebrated with each other, yelled at each other, cried with each other, annoyed each other, frustrated each other, and supported each other. Matt has made me a much better investor. He has taught me so much about supporting entrepreneurs, building and leading a great board, and hanging in there against long odds for a very long time.

When you see me do something, say something, explain something, here or elsewhere, my approach and philosophy comes from my experiences and nowhere did I get more experience than my time working with Matt and Return Path. So if you are getting any benefit from me, you are getting that benefit from Matt too.

I hope to work again with Matt and his team on another company or two or three. Hopefully they won’t all take twenty years.

#entrepreneurship#VC & Technology

Comments (Archived):

  1. Tom Labus

    Patience is the essence of successful investing at all stages and also the most difi8cult to learn and stick with.

  2. Mike Zamansky

    I love this. A long journey made up of a combination of consistency and change. What better environment to learn from?

  3. JamesHRH


  4. cedricbellet

    Always great to read about this sort of experience Fred. Thanks as usual for sharing with us

  5. jason wright


  6. Jeremy Robinson

    I’m sorry Fred- I’ve read on this site that you hate unadulterated praise- but this post is a love letter to what a really robust and healthy investing relationship can look like and I- like others reading this post- just have to love it. Because it also, especially during this time of negativity and divisiveness- gives us a hint about what people can do together when we’re resilient, gritty and work out the tough stuff. Then sometimes we get to feel and celebrate the tender stuff. Congratulations!

    1. fredwilson

      i agree

    2. mattb2518

      Jeremy, that’s a great comment on top of a great post. Thanks for sharing those thoughts.

      1. Jeremy Robinson

        Thanks Matt. Just read your most recent blog and ordered your book which I look forward to reading. Happy to see you thanking your coach. I know the guy [though not well]. We’re in the same line of work. He’s a good one. Very happy for see someone with your values getting that exit you hoped to have.

  7. iggyfanlo

    Sounds like a great example of the phrase: great judgment comes from experience and experience comes from bad judgment

    1. Jeremy Robinson

      Funny as you’ve written it. But closer to the truth is that experience comes from the willingness to take risks where one is not always clear if he or she is exercising good or bad judgement.

  8. Twain Twain

    Fred Wilson, May 2 2019: “Through all of that, we celebrated with each other, yelled at each other, cried with each other, annoyed each other, frustrated each other, and supported each other.”…

  9. Seth Godin

    I’ve watched this journey since the beginning, Fred.I don’t honestly believe any other VC would have had the guts and care to stick with it.Long, strange trip. Bravo.This is what reputation looks like.

    1. fredwilson

      thanks Seth. that is nice of you to say. but as you know well, it takes two to tango. matt gets a lot of credit for that too

      1. Yb927

        In any case a beautiful tribute. Thanks for that.

    2. mattb2518

      Long, strange trip, indeed. It was nice to have you around the edges for so many of the early years, Seth.

  10. karen_e

    Congratulations. As a long-time reader, I have already benefited from the pearls of wisdom about Return Path that you have dropped along the way.

  11. aminTorres

    Yikes! I guess this side of the venture business is not talked about as much as it should.(or you perhaps you are a different type of vc )

  12. Boris Wertz

    Sticking with entrepreneurs through ups and downs has always been my favourite feature of the USV partnership – congrats on the exit, Fred!

  13. falicon

    This is a book I would really like to read (and study).

  14. awaldstein

    Quite the saga and good on you Fred.There are those that talk the talk, and those that walk the walk.You are obviously the latter.

  15. sigmaalgebra

    Maybe yesterday I planted a seed for another one for VCs; since the location was about 50 miles north of Union Square, maybe for AVC/USV.I was doing the usual at Sam’s Club, i.e., losing patience with the fact that the customers have no index where the stuff is so, out of patience, was just asking the staff. So, I wanted to know where the light bulbs were. So, yup, they are really short on incandescent, that is, tungsten filament bulbs but are pushing versions of light emitting diode (LED) bulbs that (i) are more expensive per bulb and (ii) have a tough time putting out the same amount of light as a 100 W incandescent bulb. So, LED has been crammed down my throat by no doubt a lot of politicians and media bought off by an LED lobby — dirty stuff.So, I mention 100 W incandescent to the staff and get the “glassy eye” effect. So, right, like water, Volts are like water pressure in pounds per square inch; Amperes are like water flow rate in gallons per minute; multiply the two together and get Watts which is like horsepower and is a Joule per second where a Joule is the unit of energy where energy is that stuff that quite generally as far as we can tell in the universe can be converted from heat to light, kinetic energy, gravitational energy, even between mass and energy, but in total can’t be created or destroyed. So, eighth grade general science for the Sam’s staff.So, can have two photons, each traveling at the speed of light, have them get close, and then convert to an electron and a positron — the positron is the “anti-matter” as in the old TV series Star Trek. So, the photons are from the electro-magnetic field, do participate in the gravitational field, but ignore the Higgs field, that is, where the mass is. Then suddenly, presto, bingo, slam, bam, thank you ma’am, we lose the two photons, get two particles, each of which DOES have mass, can’t travel at the speed of light, are part of the Higgs field, and still are part of the gravitational and electro-magnetic fields. But the total mass/energy has not changed, and if can get the electron and positron back together can get one heck an energetic photon. Does this make any sense to you? Not to me! Can’t make this stuff up. Who the heck designed that? Not me! If I’d designed that, I’d remember. I didn’t do it. Don’t blame me! I didn’t explain that to the Sam’s staff.Later I’m standing there about to check out; and a staff guy and I are talking; he had heard about my lesson on science and wanted to know what I do; and I mention a little about my startup. He lights up, is in high school, and has been told that all the lists for jobs and careers have programming at the top.I tell him: Nope. Just programming is too easy. Instead have to move up market, to WHAT is to be programmed, WHY, and for WHOM for WHAT revenue. Or to have a job as a programmer, someone has to create that job. For that they need to find a need in the market, a product or service people are willing to pay for, to design the product/service, to raise the money to hire people, and THEN hire programmers. The big money is creating, owning, and making successful such a business, not just doing the programming. Indeed, maybe the business founder, owner still actually does the programming himself.Yes, it’s possible to make computer programming tricky, e.g., in “data structures” as in……But these data structures are a bit conjectural or when useful of marginal utility. Besides they are mis-characterized, are really algorithms where the data structures are secondary. Apparently the authors were taken with another old computer science wet dream that for a given real problem, if could just find the right representation, then all the rest would be trivial. People in sloppy fields like computer science, due to the sloppy aspects, are vulnerable to such wack-o nonsense.There is some interesting stuff in that PDF, but its utility is highly doubtful.Instead, it is much better to throw the doors open to a much wider class of problems to be solved and means to solve them, e.g., pure/applied math. Various applied math topics are of known high utility and awash in much more good thinking than that little computer science PDF. Broadly computer science profs can no longer get tenure publishing about compiling and linking or what is in D. Knuth’s The Art of Computer Programming so strain to find more to do. A lot of their straining is to cook up imaginary problems and attack them with poor applied math. Sick-o field.Yes, the PDF goes nuts-o over minimum spanning trees. That is an old topic with two, nice, simple algorithms, some good utility in network flows, a really curious connection with the traveling salesman problem on Euclidean spaces (R. Karp), with some utility in planning and scheduling (W. Cunningham) as in operations research, but the PDF does MUCH more. Maybe the excuse is an effort to creep up on some algorithmic philosopher’s stone or Holy Grail for solid insight into what is fundamental about all algorithms and knock off the question P versus NP as a special case — that’s dreaming from smoking funny stuff and a long way from any utility in the lifetime of any person yet born.Uh, oh computer science profs: There’s a famous recipe for rabbit stew that starts out “first catch a rabbit”. Well, there’s a recipe for applied math, including as a microscopically tiny special case, now essentially all of what is being attempted in computer science, “first get an application”. Then, if don’t have an effective solution, find one, or bend the problem until can find one. That’s also part of a recipe for business: First find a customer need. No, I didn’t explain that to him!So, maybe that high school guy will take seriously the little bit of US career wisdom I did give him, learn some programming, and THEN learn about WHAT to program for WHOM, WHY, and how to get PAID, i.e., how to be a founder, owner of a successful business, where, at times, they also program. Maybe.Then maybe when he has picked a product/service for a HUGE market, where there can be a LOT of revenue and after-tax earnings, where he has established some significant barriers to entry, and where he has revenue significant and growing rapidly, he will call up some VCs, maybe on Union Square in NYC, or maybe some VCs will notice and call him. Maybe.

  16. DJL

    This is a welcome success story that presents the flip-side of the “instant” VC-backed unicorn company that we typically hear about. Congrats to you and that entire team.On a side note, would love to see posts from you or Brad on how “almost dead” companies rescued themselves and then turned around. Everyone loves a come-back story. Especially me.

    1. mattb2518

      There’s a reason they’re called “unicorns.” Most companies in the world don’t look like them!

  17. Pointsandfigures

    How many of the Flatiron Companies are still around and “in the fund”?

  18. Simone Brunozzi

    It’s a bit off-topic, but it would be great if one day you could spend some time sharing your learning on “good boards” and good board members. I know you’ve written about it in the past, but I feel there’s so much more to unpack.

  19. Pranay Srinivasan

    Off-topic question:How did the VC fund cycles work around returnpath – especialy when you say Flatiron invested in Returnpath – Were those just rolled into a vehicle for LPs, were they paid off, or was it just kept open?

  20. steve cheney

    What a terrific story.

  21. Matthew Hoffman

    I like to think I’ve done some pretty cool things (I hope!) in the 5 years since I left Return Path, but I can absolutely say that I’ve learned more from my time there than any other company I’ve ever worked at. That is entirely a function of the special culture and unique development focus that Matt has put in place. Look at all the alumni now doing such amazing things – RP is a rare case of an organization who’s impact goes far beyond its economics. Matt (and Fred) have created an extraordinary legacy. Congratulations!

  22. Anita Absey

    Great post Fred. It was an honor to work with Return Path for 15 years. Thanks for your support and guidance along the way. Inspiring.

  23. Lawrence Brass

    Congratulations!staying power.

  24. TanyaMonteiro

    And there’ll be tears again today after this beautifully written and important rendition. Congratulations!!

  25. Adam Slutsky

    Fred – a beautiful note. The two of you exemplify all that is great about the spirit of the entrepreneurial partnership and its pillars of focus, optimism and perseverance. Congrats to you and Matt

  26. mattb2518

    Thanks, Charlie – that was a good post, and it’s even more true another decade on!