Large Group In-Person Meetings

I have been doing a bunch of large group in-person meetings in the last few weeks and I must say that it feels great to be doing these large group meetings in person. There is a different energy in the room than on the screen.

In order to make everyone comfortable meeting like this, the way these meetings typically happen is everyone provides a proof of vaccination and everyone gets a covid test within 24 hours of the meeting. It is best if the host of the meeting can provide rapid tests so anyone who wants to arrive in advance of the meeting can get tested right there.

It is also the case that in each of the large in-person group meetings I have done in the last few weeks, there have been a few folks on video. I think that is likely to be the new normal for large meetings and it really helps to have great audio and video in the room so the people on the screen feel as much like they are in the room as possible.

But I must say that I am very happy and very relieved to be meeting in person again in large groups. I missed it a lot and I am glad to be back doing it.

#Current Affairs

Generalist vs Specialist

At USV, we have a fairly narrow thesis that sets out what we want to invest in, but all of us work across all of our thesis areas. We see ourselves as generalists not specialists.

In an environment when everything is moving so fast, that can be challenging, as I wrote about on Tuesday.

But there are also great benefits to working this way. As a team, we benefit from working together on everything versus having silos within our partnership and firm.

And as individuals, there is something quite helpful about moving back and forth between domains. It stimulates the mind in ways that going deep and staying deep on one thing cannot.

There are many ways to build a successful investment business. Specializing in a specific domain works well for many firms.

But I personally prefer being a generalist. Being able to meet founders in multiple different sectors back to back to back is really something special. It challenges and opens the mind in a way that really works for me.

#VC & Technology

Staying Plugged In

I wrote in my 60th birthday post that my late career mantra is less hustle more conviction. It has been working for me and has kept me in the game.

But there are times, usually after an opening emerges, when a market moves so fast it is hard to stay on top of it all.

I don’t worry about missing out. That’s part of the venture capital business. Fear of missing out is a counterproductive emotion and I refuse to engage in it.

But I do worry about not understanding what is going on. When you stop understanding things, you are done. There is no way to be a great investor if you have no clue.

It is possible to surround yourself with others who can help you understand what is going on. I do that and I have terrific colleagues who keep me engaged in what’s happening. These colleagues are inside USV and also spread around many other firms too.

But at some level, you have to understand things yourself. Osmosis only works to a point. I find that you have to get your hands on the technology, use it, and feel it to understand it.

And that is the hard part when things go bananas as a market opens up. Less hustle works against you. And you have to find a way to engage in it all. That’s where I am right now.

#crypto#VC & Technology

Diversification

I am a fan of and a practioner of investing in risky assets. I believe you must take significant risk to earn significant returns.

But I also am a huge fan of diversification when holding a lot of risky assets. It has been easier for USV to get into new sectors, like crypto and climate for example, knowing that we also have large positions in other parts of the early stage tech sector.

When crypto went crazy in 2017 and then blew up, it was mostly a blip in our portfolio values. The same was true in the second quarter of this year when crypto had a big pullback.

This is not an argument against crypto only funds. USV has invested in a number of them and so have the Gotham Gal and I. But I would not be comfortable with a portfolio that was only crypto funds. I like to have a mix of assets, ideally uncorrelated, in our portfolio.

An asset class that I really like as a hedge against early stage tech sector risk is real estate. The Gotham Gal and I own a lot of income producing real estate and it feels very uncorrelated to early stage tech.

But there are many ways to get diversification. If you don’t want to think about your investments, something I cannot bring myself to do, then a stock index fund or a portfolio of stock index funds, and some fixed income funds can get you the diversification you need. But the level of risk taking in that strategy is a lot lower.

But regardless of how you get there, it is very important that you not have all of your eggs in one basket. That basket can drop and then you have a mess.

#life lessons

Bright Moments DAO

Occasionally, I will write at USV.com and today is one of those days. I wrote about an investment in a DAO called Bright Moments that we made this week. DAOs are interesting and we plan to do a bunch of DAO investing going forward. You can read the post here.

#crypto