The post on Fred’s blog this morning regarding 20% equity stake speaks loud and clear about USV stand as a firm.
We are lucky to be able work with Brad and Fred because they are truly a new breed of a venture capitalists. They are hands on, on top of the market, innovating along with their portfolio companies.
Most importantly, they are candid and honest and deeply care about technology and our society. They want to do the right thing.
What USV figured out since its inception is that the rules of the venture game are changing. As the web gets wider and more open, the old strategies break down. In this new world, as Fred writes in his post, the capital is abundant, but good ideas and great startups are scarce. USV answer is to embrace the change by focusing on entrepreneurs and ideas.
The fact is that Fred is absolutely right in debunking the perception about 20% ownership. This is yet another thing that is simply not true anymore. VC can’t say we need to own X, as it is a two way street and if they believe in the company and want to be part of it, there needs to be a conversation instead of a foot down.
The question is though, how many other firms will embrace this thinking? Are big funds going to be able to justify lower ownership numbers? Probably not. Why? Because they need to deploy large amounts of capital and it is easier to do it in bigger chunks. This comes back full circle to re-thinking the VC business.
Increasingly, it is becoming the business where smaller size funds are more successfull because of their flexibility, agility and open-mindness.