Upfront Ventures


Whew!

We’ve been dying to tell you all for a while that we had raised a new venture capital fund and of course given SEC filing requirements the story was somewhat already scooped by the always-in-the-know Dan Primack a few weeks ago.

We raised $280 million. Our last fund was $200 million but as you may already know since we raised that fund we added new partners Greg Bettinelli and Kara Nortman and Venture Partner Hamet Watt – all of whom are busy looking at new deals for the firm in addition to Yves Sisteron (the founder), Steven Dietz (also part of founding team) and myself.

The speaks to the continued confidence in the venture capital markets and as I had predicted some time ago the VC markets right now are a great place to invest – especially relative to other places to put one’s money.  I knew eventually people would realize that the Kauffman Report and all the talk of VC returns were rear-view mirror analyses. If you want to understand how the VC industry is changing there is a great primer in the link.

Wait, didn’t you just raise a fund?

Well. Our last fund we raised was in 2012 and we began investing it in April of 2012.

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Let me start with the news that I’m excited to share with you. After years of trying to persuade Kara Nortman to become a partner at Upfront Ventures I can officially announce now that she’s joined us effective immediately.

I have known Kara for 7 years and knew almost immediately after meeting her that I wanted to work with her one day in some capacity. Thus began my marketing campaign. It is rare to find somebody who matches exactly what I’m looking for in a partner so when you find it you act:

Academic rigor (Princeton undergrad, Stanford MBA)
Competitive (Athlete: skier & rowed at Princeton, hates losing at everything she does)
Investment experience (5 years a VC at Battery Ventures)
M&A experience (Morgan Stanley and later co-headed M&A for Barry Diller at IAC)
Operating experience (Helped run parts of CitySearch & UrbanSpoon, tons of product management experience, Board of Hatch Labs which helped spawn Tinder)
Startup CEO experience (Founded P.S. XO along with my good friend Soleil Moon Frye.

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When I first met Meredith Perry she was 24. That was three months ago this week. Today I’m handing her the largest A-round check I’ve ever written as a VC as we lead her $10 million A-Round at uBeam.

As I’ve written about recently, at Upfront Ventures we started talking a couple of years ago about wanting to fund stuff with more meaning. I think this is a combination of being realists as venture capitalists that outsized returns in our funds must come from taking on bigger, more impactful projects that can move markets. It is also a function of the stage of much of our careers where we aren’t interested in playing small ball with incrementalism on how to squeeze out an extra 5% of margin by optimizing the Internet slightly better.

The reality is that as VCs we have limited allocations of where we can spend our time so we want to attach ourselves to projects in which we, too, can be passionate.

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I’m pretty on record as saying I don’t think many private-to-private tech mergers make sense. They are often done from a position of weakness. Something in both companies isn’t working, which is why they come together.

I often don’t believe in the therm M&A because in my experience mostly A works.

But of course there are always exceptions. And even when I remain skeptical sometimes opportunities present themselves that prove one should never be absolutist.

As many people know I funded a company called Moonfrye almost 2 years ago led by two amazing women – Kara Nortman & Soleil Moon Frye. Our goal from the outset was to build a great eCommerce experience that could compete with Michels on one side (for DIY / crafting) and Party City on the other (throwing events / parties / celebrations).

The thesis was simple. Mom’s struggle to plan events and activities for their kids. Most products out there suck so mom gets stuck with angst of wanting to have decorations, activities and chatzkies for other kids to take home. What should be an enjoyable experience turns into a time-suck obligation and angst-ridden day of self questioning.

Our product name is P.S.

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We are often asked how companies get funded, why VCs make the decisions we make and what we’re looking for in entrepreneurs. I think this is a Seriously great example of how this process works for at least one VC – Upfront Ventures. But I’m guessing the narrative is similar elsewhere.

I first met Andrew Stalbow, the founder & CEO of Seriously in August of 2013. He hit me from two very trusted sources. On August 23rd, 2013 I had an email intro from my good friend and trusted source Jeff Berman who only sends me stuff when it is somebody he respects (ie a strong filter vs. those who send casual intros). On August 26th I had an equally effusive intro from Ynon Kreiz, also a friend, trusted source and also the CEO of portfolio company Maker Studios. So this was definitely an introduction I was going to take.

We met on August 28th, 2013 and I know this because literally the next day

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Venture Capital is a tricky industry. If you’re funding the same stuff as everybody else and if you started your activities when the clues were obvious you’re much less likely to drive enormous returns.

When Fred Wilson funded Twitter I guarantee you it wasn’t obvious that it was a billion dollar+++ idea. Far from it. Many questioned whether it could survive under the fail whale, inevitable competition from Facebook, founder fighting, fights with 3rd-party developers let alone become a revolutionary business that could make money. Lots of it. He couldn’t have imagined power users would be global political figures, dictatorships, small factions of people standing up to the Iranian army or every sports figure & celebrity in the world.

It was an early and smart bet.

When the early teams: angels, lowercase capital & first round capital funded Uber they had no idea it would be one of the most revolutionary ideas of our time. I know – I was there when the first people debating funding it at less than a $5m valuation.

Airbnb? Ha. Almost nobody believed and now look at it.

Drones. Bitcoin. Online education. VR. Palantir.

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