Dan Primack and Fred Wilson sat down for an interview last week at the Upfront Summit and the results were amazing. It’s 25 minutes and it’s both a pleasure to watch and is super insightful.
You can watch the interview embedded above of click on this link: Dan Primack interviews Fred Wilson at the Upfront Summit.
The interview was wide ranging and discussed everything from USVs investment thesis over the past 10 years to what some emerging themes are around blockchain and artificial intelligence.
As by now you likely know they had a brief discussion about public markets including about whether Uber should go public. But there was another element that was very subtle and nicely handled that I’d like to expand upon.
Dan asked Fred about “generational change” at USV and in the VC industry more broadly. Fred talked about places who had done this exceptionally well – like Benchmark and Sequoia – and how and why USV is thinking about it. Fred mentioned that in great investment firms the senior partners can continue investing for a long time without leaving the firm but eventually need to give more control to the younger partners. In firms where this transition doesn’t begin the talented younger partners splinter off and form their own firms.
We as an industry have seen this. And honestly it was the single biggest roadblock at Upfront when we raised out fourth fund in 2011. Many potential investors asked me, “Aren’t you just going to leave and form your own fund?” I told everybody I wasn’t going to and I meant it. The founding partner of Upfront, Yves Sisteron, has been a mentor for me since 1999 and was on the board of my first company.
5 years ago I sat at our annual meeting bored beyond belief. It wasn’t just that I have ADD making boring meetings excruciatingly painful – it was that the format was tired, unimaginative, uninspiring and not very useful. We did what many VC funds did – we presented our annual results, we stood up and talked about our portfolio companies, we invited a few to also present and then we had dinner & drinks at some posh restaurant.
I have been evangelizing to founders for years to be more thoughtful about how startups update investors and run board meetings so I would be pretty hypocritical if I wasn’t willing to try and be more effective myself.
So I decided to change up our format a bit. Here’s a short sample of what we now do.
In the VC insider baseball world a discussion has gone on about “VC platforms” over the past 5 or so years. While firms define platforms differently, let’s just say they are the services that a VC offers outside of investment capital and partner time on boards or providing intros.
Examples of VC platform services include: recruiting, marketing, design support, inside sales reps, consulting, accounting services and so forth. Each VC has their own take on which services to provide and mostly they’re free but some smaller VCs charge portfolio companies for use of these services but usually at a cheap cost.
[Side Note: Upfront has hired Kerry Bennett as a member of our executive management team to run marketing – please follow her on Twitter here]
Platform services aren’t a new concept – in the late 90s a new breed of firms emerged who provided services that hadn’t typically been offered. The two most prominent – Internet Capital Group (ICG) and CMGi – raised the bar for others and every firm in the Valley seemed to have a new war for services.
I’m often asked about the differences between being at a VC and being an entrepreneur and whether I prefer one or the other.
The biggest difference I cite is that Venture Capital often feels like an “individual sport” while startups are a “team sport.” The reason is that at a VC you have a group of partners who often have different focus areas of excellence, each pursues deals in their respective field, each makes investments and sits on boards and each spends their most difficult hours tackling problems at portfolio companies vs. solving the challenges at the VC itself. You come together as a team one day per week (the “Partner Meeting,” which for most firms is on Mondays) and mostly share the news & information from your portfolio companies or evaluate new deals.
Startups are team sports because you’re all working on the same shared objective of the company. Startups often have mission statements, goals & objectives and the best roll out company wide processes to align the CEO’s goals with the executive management goals with the next level staff goals all the way down the organization. The top-line results are shared because every member of the org ought to be contributing to the same goal.
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
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.