Fred’s quality post this morning on the Fiction of the 20% further differentiates USV as an innovative venture firm and is another data point for anyone who’s trying to understand how they’re making so many quality investments and successful exits.
When the world breaks, spoils are rewarded to those who figure out the emerging trends first. I think it’s safe to say that Fred and Brad have shown one way to successfully play in early-stage investing.
Alex sums up the state of the venture world nicely in a post today at Read/Write Web on The New Rules of Technology VC. From how the old model worked to why new is different, Alex summarizes the changes that occurred and touches on the future that lays ahead.
The larger venture firms are going to have to turn to later rounds of tech, bio and alternative energy. It’s a function of their structure and returns necessary to flourish.
The impact on early-stage tech investing is profound: the traditional model doesn’t make it attractive (/ feasible?) for larger firms to play there, creating a gap.
It’s the opportunity that this gap has created, and the various strategies to address it, that is most interesting to me.
Innovative VC firms like USV are breaking ‘traditional’ (read: inane) rules and reaping the reward. Firms that invest along early-stage processes are emerging to bridge the equity gap (think: Invention Capitalists, Commercialization Capitalists, and the like). Angel syndicates are developing that can also fill the need.
“The winner of all this turmoil”, says Alex, “is going to be the consumer.” Agree. But let’s not forget: entrepreneurs, those investors who anticipated the trend and are positioned well to benefit, and larger firms who move to later stages and enjoy great returns with minimized risk.
Disclosure: I work for AdaptiveBlue, a start-up founded by Alex, that has taken investment from USV. And you know what? We rock. Long Alex. Long USV. Long rocking.