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Do Fewer Things, Better

Do Fewer Things, Better Onstartups Nov 24, 2015

I'm going to tell you a secret. I have a very simple, 4-word strategic plan (devised it a few years ago).

Does a VCs Culture Really Matter? The Upfront Story

Does a VCs Culture Really Matter? The Upfront Story Bothsidesofthetable Nov 19, 2015

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 […]

The Fantastical, Stupendous, Wonkariffic Tale of How Ample Hills Creamery Raised a $4 Million Venture Capital Round

The Fantastical, Stupendous, Wonkariffic Tale of How Ample Hills Creamery Raised a $4 Million Venture Capital Round Thisisgoingtobebig Nov 16, 2015

...At least, that would be the title if somebody made a kids movie out of it.

It just seemed like a fitting title for a company built around narrative by a founder who used to write stories for a living. It's a story that just hit a milestone--a $4mm round of venture funding that I'm ecstatic to say Brooklyn Bridge Ventures just led. I'm joined by Lerer Hippeau Ventures, Red Sea Ventures, NucleasHG, the founders of Seamless, a host of extremely helpful angels, and a CircleUp syndicate led by my friend Tom Potter, co-founder of Brooklyn Brewery.

Brian Smith was a science fiction movie screenwriter, penning low budget alien movies starring the likes of Lou Diamond Phillips. He started Ample Hills Creamery four years ago with his wife, Jackie Cuscuna, after turning a home ice cream making hobby into a reality with a cart at Celebrate Brooklyn in Prospect Park.

When they first opened, they ran out of ice cream in four days and had to close the shop to make more. That kicked off a story that would take them up to two consecutive Zagat #1 ice cream in NYC ratings, the Food Network calling them the #1 ice cream shop in the country, and a prime spot on Oprah's List of Favorite Things.

So what makes Ample Hills so special? After all, there's lots of good ice cream out there these days, right?

First off, you have to think of Ample Hills as a destination--and it was designed that way. It's a place that you go to and want to hangout. You take your kids there. They have birthday parties there. It's a part of the neighborhood--not just a dispensary of ice cream.

I'm always struck when I visit their two main locations in Gowanus and Prospect Heights how much sheer human joy is being created. The human joy per square foot metric is one we'll be tracking closely over time here. You see people sitting around with smiles, laughing, and all looking like little kids, no matter what their age.

That's their target market--little kids and the little kid in you. There's [...]

Disappointed Billions are the Best Thing Ever Thisisgoingtobebig Nov 19, 2015

"Square, the payment technology company founded and led by Twitter CEO Jack Dorsey, this evening raised $243 million by pricing its initial public offering at $9 per share, which would imply an market value of around $2.9 billion.

It is a major disappointment for the San Francisco-based company..."

Can we just all let that sink in for a second?

A "major disappointment".

What I wish for every single entrepreneur out there is to be so majorly disappointed in their lives.

The only people who should be disappointed where the regular folks invested in these T. Rowe Price and Fidelity funds who bid the company up to ridiculous valuations in their pre-IPO rounds. Seemingly everyone except them knew that the company wasn't worth that much--but it didn't matter. Unlike venture capital funds, they don't make money directly off the multiples of their return. They make money on asset gathering--having the biggest pool of money and needed to put lots and lots of dollars to work. If you were willing to take their $500 million checks, they were willing to give you whatever valuations you wanted.

It's a market that had gotten completely detached from the regular venture capital market--you know, the VCs and angels like SV Angel, First Round, and even Foursquare CEO Dennis Crowley who I'm pretty sure aren't crying a river over a multi-billion dollar exit to the public markets after just six years. They did quite well on their angel investment in Square.

Don't let the media tell you things are bad and the sky is falling, when it's really just a return to normalcy in a completely overheated part of the market that they themselves couldn't get enough of. For every seed funded company struggling to get press, journalists fell over themselves to get the latest scoop on who became a decacorn and to rewrite the same story on private valuations that meant absolutely nothing.

What's worse is that this end of the market is even affecting early stage VC mindset. If you' [...]

Helping Colleagues in Their Time of Need Bothsidesofthetable Nov 16, 2015

I had a bunch of topics teed up now that I’m back in LA after 2 weeks of constant travel. I felt excited to write because it’s a cathartic outlet for me and saves me from doing email. But no words would come out this weekend. After watching the terrorist activities in Beirut and Paris and […]

Founders from MIT With a Plan to Change How We Grow and Eat Food

Founders from MIT With a Plan to Change How We Grow and Eat Food Bothsidesofthetable Nov 4, 2015

In our industry we always talk about funding big ideas or funding things with more meaning. It’s something Yves Sisteron & I have been talking about for years at Upfront Ventures. Today we’re proud to talk more about Grove Labs – we really hope you’ll quickly check out this innovative product and we think many of […]

Why do you win? Thisisgoingtobebig Nov 9, 2015

When I first started in venture capital, back in 2001, I used to fund funds. I worked for an institutional investor that invested in both venture capital funds and later stage growth deals. My job was to figure out why certain firms were winning and why they might continue to win.

Part of this, of course, involves looking into the past. Why someone did well previously is the first clue to figuring out whether or not that would be sustainable--but it isn't necessarily predictive. Many of the reasons why someone had previous success might have to do with unique windows of opportunity that no longer exist.

Furthermore, for many investors, once they achieve success doing one thing, they often move onto other things, assuming their success will follow them.

They raise larger and larger funds, for example, after building up a track record of successful angel investments. Just because someone let you tag on to their seed round doesn't necessarily mean they're going to look to you to lead the Series A in the future, especially if you're going head to head with Sequoia, A16Z, or Union Square Ventures.

Over the past few months, I've been wrapping up fundraising on Brooklyn Bridge Ventures' second fund--and these are the types of questions I get from LPs all the time. With all of the various investors out there, with the transparency brought to the market with things like Angellist and Product Hunt, how can I continue to be successful in the future?

One thing that never made me feel comfortable is the idea that I might be smarter than anyone else. There are a lot of smart people in our industry--and there's so much uncertainty in the startup world, even if you could say that you were smarter, it's not totally clear that just being smart wins in venture.

The best bets often look pretty stupid, if we were honest with ourselves. There were a million reasons not to do Uber, for example--regulatory hurdles, first time VC backed founder (Remember, Ryan Graves raise [...]

Subway Thumbing Thisisgoingtobebig Nov 4, 2015

On Sunday I wound up leaving my car by the office because of the NYC Marathon. Last night I took it home, so this morning I find myself on the subway in a rare occurence. It's unfortunate because today is an absolutely perfect day to bike. Luckily I have to be in the city later so I'll have a chance to ride.

For now, I'm subway thumbing. Lately, I've been a little stuck for things to write about. It's a combination of being heads down on fundraising and the feeling like everything that could be said about unicorns has been said. The current conversations in venture and startupland bore the hell out of me. Yesterday's top Techmeme article was about the Twittee favorite button turning into a heart.

Stab me in the eye with a fork.

There's a guy sitting across from where I'm standing who could be Dave Bautista.

Next to him is a young woman studying a medical textbook. Her hot pink canvas sneakers and oversize denim jacket make her look eleven.

The rest of the passengers come in two flavors--staring at their phones and staring into space.

There's a lot of casual gaming going on. I wonder if any of them have heard of Activision.

Another man standing across from me is leaning against the doors. He's wearing a generic baseball cap pulled tightly down to his red tinted sport sunglasses, making him look a bit like igcognito Cyclops from X-Men. If it wasn't for the flannel shirt and the beer belly he'd be perfect.

I just realized how tall the woman is next to me. She's in flats and is at least an inch taller than I am. She's letting her dark roots grow in for the winter.

Headgear is pretty diverse in this car.

I spot Beats, a yellow #2 pencil, a hijab, a Yankee cap, sunglasses perched high, and a crumpled knit winter cap clearly intended as fashion versus function on an unseasonably warm November day.

There's an elderly woman with bleached blonde side pony. She's probably close to 80.

Seriously. A side pony.

How to Know if You Have ADD and What to Do About It

How to Know if You Have ADD and What to Do About It Bothsidesofthetable Nov 1, 2015

Let me start the post with three statements 1. I have attention deficit disorder, it is a real condition, I have been diagnosed including having radioactive isotopes through my brain to map my development and yet I’m a leader, I have accomplished much, I did well in school and went on to earn a master’s degree […]

What Everyone Should Take Away from Twitter’s 8% Staff Reductions

What Everyone Should Take Away from Twitter’s 8% Staff Reductions Bothsidesofthetable Oct 14, 2015

Today Twitter announced it had laid off around 336 jobs or 8% of its workforce.  Nobody should celebrate, cheer or shout, “it’s about time.” This is about 336 people whose lives are altered and need to begin looking for work, saying goodbye to friends & colleagues and go on that journey of transition that most […]

RegulatoryKings: Thoughts on the Duel Between Government and Fans Thisisgoingtobebig Oct 29, 2015

Full disclosure: I'm an investor in a stealth daily fantasy sports company.

Daily fantasy sports have exploded onto the scene in the last couple of years, and recent events have caused regulators to look at the area with increased scrutiny. Generally, creating rules to protect individuals from nefarious business practices or to leverage things like taxes fairly and consistently is a good thing and I support it.

I can't say, however, that the government has a great track record of implementing consistent and sensical policy around this. That's my major concern.

Take the argument around the influence of gaming on the sports themselves. If lots of money was at stake around these games, would that increase the amount of cheating that happens?

(Side note, since when does the government really care about cheating? It took them forever to act on the obvious steroid usage going on in baseball, and just recently, the government overturned Tom Brady's ban by the NFL for deflating footballs to gain an advantage as a quarterback.)

Yes, cheating is bad for everyone, but the idea that daily fantasy sports is going to create more cheating than, let's say, a player's potential to sign a huge contract, isn't logical. With outsized player salaries these days, you'd be hard pressed to convince a player to cheat when actually sports success and actual winning gives them the opportunity to make tens of millions of dollars per year--not to mention the risk of getting completely banned from the game. Players are much more incented these days to cork a bat, scuff a ball, or ingest something they shouldn't to try and win versus trying to throw a game.

If you want to track the influence of gaming, you make it as legal as possible, but you make it a requirement for all the platforms to know their customer, just like in banking and securities. Legality puts a spotlight in dark corners. You can never prevent money from flowing to places people want it to go, but you can track [...]

Venture Outlook 2016

Venture Outlook 2016 Bothsidesofthetable Oct 19, 2015

There is a lot of uncertainty about the state of the private, high-growth technology markets and the venture capital markets that underpin them. On the one hand innovation is clearly at an all time high unleashed by smart phones, fast telecom networks, social networks that spread commerce and the fact that we are all one […]

What To Do When Your Competitor Gets Funded? Bothsidesofthetable Oct 22, 2015

This morning announced they raised $9 million from Sequoia, arguably the best venture capital firm that exists. Congratulations. Sincerely. Conventional wisdom says I shouldn’t tell you this because I invested in their main competitor, MakeSpace. I know my MakeSpace friends will forgive me because I just don’t believe the conventional wisdom is right. And it’s part […]

An Investment Fund for NYC Foodies Thisisgoingtobebig Oct 14, 2015

I don't remember whether it was over a meal at Good Fork, Rucola, Martha, or maybe over an Ample Hills ice cream cone, but I've definitely said the words "Wouldn't it be cool if you could setup a way to invest in the growth of the food and beverage scene in Brooklyn--like, the whole thing. Maybe like a fund."

Well, my friend Tom Potter, who I know as a fellow kayaker, but who is much better known as the co-founder of Brooklyn Brewery, is making that happen. I can't imagine a more appropriate person to be starting the Brooklyn Food and Beverage Circle on Circleup. Check out Tom's cameo in this Brooklyn entrepreneurship promo video a couple of years ago at 0:50.

Circles are separately managed private funds that invest in companies on the CircleUp platform. They are intended to provide investors an alternative to direct investments in companies. The fund will make investments on their behalf in select companies on the platform. Circles enable investors to access multiple investment opportunities at a lower investment minimum, with no fees for investors.

Tom is partnering with Vidrik Frankfather, who has been in the finance industry for 16 years. He has been investing in private food and beverage companies alongside Tom for 5 years. They will look to leverage their experience and connections to bring unique opportunities, predominantly in the burgeoning food and beverage space in Brooklyn and the surrounding areas to the investment community.

If you're an accredited investor, and you're excited about the continued renaissance in the Brooklyn and Greater NYC food and beverage world, you should check out and support this Circle.

Winning is the Best Revenge Thisisgoingtobebig Oct 12, 2015

Over the weekend, the Mets, and Ruben Tejada's leg, got the short end of a controversial play. At best, the play was against the rules and both the runner and the batter should have been called out. At worst, it was a dirty play intended to knock over another player at any cost.

Lots of fans on Twitter are calling for bean balls in tonight's game, but the Mets know that would only take Matt Harvey out of the game and send it to the Mets bullpen early--a recipe for disaster.

No, winning this series in four--taking care of things at home--is really the only revenge. Going all the way and winning the World Series and getting Ruben Tejada a World Series ring should be the goal the team rallies around.

There's always room to be the better person, not just in sports, but in business and in life. I'm super disappointed when I hear about Uber's tactics to flood Lyft's network with cancelled calls and the possibility that Lyft's CTO was involved in a hacking incident. Directing your efforts at bringing down others just brings you down. It not only distracts you from doing your best, but it creates a culture of negativity. No one wants to play on a team that does anything other than strives to be the best they can be.

In the startup world, it's even more true, because a lot of the time you're not even really competing against the other person. Combined, the two of you have like .00001% market penetration, and so your enemy isn't the other guy--it's apathy and lack of awareness. The last thing you really want people to hear about your company as a first impression is something negative and underhanded. It's not what you want top talent considering your job offer to hear either.

Retaliating is easy.

Winning is hard.

Just win.

What Makes a Great Business Partner?

What Makes a Great Business Partner? Bothsidesofthetable Oct 9, 2015

A while back while I was reading the tech press I saw a quote from Randy Komisar, a partner at Kleiner Perkins that was simple, yet profound. He was quoted as saying, “Being a great partner is as important as being smart or being right.” I liked it so much I wrote it down and tried […]

Why @UpfrontVC invested in Disruptive Rental Car Startup @Skurt

Why @UpfrontVC invested in Disruptive Rental Car Startup @Skurt Bothsidesofthetable Oct 7, 2015

Rental cars. I have never met a person who loved their rental car company or the experience of turning up at an airport, waiting in line, paying a huge fee and then dealing with returns, airport shuttle buses and so forth not to mention half-washed and smelly cars. I think the closest parallel I have […]

What Can You Do if a VC Pulls Their Term Sheet?

What Can You Do if a VC Pulls Their Term Sheet? Bothsidesofthetable Oct 1, 2015

What Can You Do if a VC Pulls Their Term Sheet? I was asked to answer this exact question on Quora and I did so some time ago. The beauty of evergreen content is that it resurfaces all the time and it is as relevant today as it was years ago when I answered it. […]

How to Build a Successful and Diverse Venture Capital Portfolio Without Really Trying Thisisgoingtobebig Oct 7, 2015

After checking out The Information's "open dataset" on diversity in venture capital, I felt pretty disappointed. It didn't include the most important statistic of all--the results! Who is actually building a portfolio whose founders reflect the diversity of the greater population?

I went back and calculated the number of companies in the first Brooklyn Bridge Ventures portfolio who have at least one founder who is female, from an underrepresented minority group, or LGBT.

A whopping 17 of the 32 companies (53%) have founders that fit into those groups. So, while my fund might be 100% run by one white guy, I'm sure I'd fare pretty well on The Information's list if they added actual funding data.

Yet, here's the thing: I'm not actually aiming for diversity. Not directly, anyway. There's no social impact clause in the fund's mandate and the background and status of the founders arent criteria.

So how's that possible with such a skewed ratio? And does it work? Well, so far, the fund is clocking in at about 64% return, compared to the NASDAQ's annualized return of about 15% over the same period--so I'd say it seems to be going in the right direction.

Here are some ways I think this works out in practice:

The Earlier You Go...

Most people need a little bit of capital to bring a product to market--or they're an engineer. Well, if the stats say that most of the people getting funding are guys and that most of the engineers are guys, then if "have money or code" is your criteria, you'll wind up funding mostly guys.

Of the 32 companies in my portfolio, 18 (56%) were pre-product. If you're doing that many companies at such an early stage, you're bound to be choosing from a wider audience. You'll have more zeros, but your winners will be that much bigger for you because you'll be in at attractive valuations. Four of my best performing companies--Canary, Orchard, Ringly and Tinybop--were all pre-product investments.

Be Accessible

I think the biggest [...]

What Should You Make of the Web Summit Controversy? A View Behind the Scenes Bothsidesofthetable Oct 2, 2015

Like many of you I read the Is Web Summit a Scam article making the rounds this week. I have attended Web Summits three times – it is not a scam. Let me get that out of the way. It’s a big conference and all big conferences charge money, make money and serve a diverse set […]

Why I Look for High Conviction, not Consensus, in Venture Capital Decisions

Why I Look for High Conviction, not Consensus, in Venture Capital Decisions Bothsidesofthetable Sep 26, 2015

One of the least understood parts of the venture capital industry and venture capital firms is how investment decisions actually get made. The truth is that each firm is different and there isn’t one standard but over the years I’ve talked with enough of my peers to get sense of how many firms work. Often […]

What You Could Learn from @John About Teens and Social Media

What You Could Learn from @John About Teens and Social Media Bothsidesofthetable Sep 11, 2015

When most people think of John Shahidi two words come to mind. Bieber & Mayweather. Yes, that Bieber (67 million Twitter followers, 73 million on FB) & that Mayweather (6.4 million Twitter followers, 12 million on FB). The reason being – John Shahidi counts both as investors and friends. So. You’re probably thinking, “slick talking, […]

Here’s Why We Fell in Love with Draft

Here’s Why We Fell in Love with Draft Bothsidesofthetable Sep 10, 2015

My partner Greg Bettinelli is an avid sports fan who throughout his career has developed an expert understanding in online ticketing (at eBay has was a champion of the StubHub acquisition) and online marketing. Greg knows consumer businesses and customers, which has added tremendously to our team where I admittedly have more of a background in […]

Tips for Investing in Startups if You're a Celebrity Thisisgoingtobebig Sep 30, 2015

I've wanted to write this post for a while, but now that my friend Beth has joined WME, feels like the perfect time to do it.

I don't really know many celebrities. If I threw a dinner party in NYC, I think I could get Morgan Spurlock, Gabrielle Corcos & Debi Mazar, Carmelo Anthony, and maybe former Met pitcher Glendon Rusch if he happened to be in NYC as we're randomly Twitter friends. I met Brooke Shields a few times at the Union Square Hyatt where she was holed away writing her recent book. She was lovely, and doesn't look a day over 35 without makeup, in case you're curious.

That's about where I top out, though--so I don't pretend to know what it's like to be a celebrity.

Celebrities should also know that money and fame doesn't automatically make them qualified to be investors. Some of them appear to be very good investors, though--and some investors are borderline celebrities. Crossing over is hard on both accounts, so here's some tips for people who have broken through the 15 minute fame barrier.

Investing in startups is hard and it's going to be hard for you, too. Don't think that everything you touch is going to be the next Uber. Ubers come around once in a generation and while it seems like a lot of celeb investors are doing well, there are a TON of bad deals no one ever shares. It's like the stock market. Everyone seems to be making money all the time, right? Respect my craft and I'll respect yours. Find some partners that you trust who do this kind of thing all the time. Do you know who the worst people in the world are? The trusted celeb manager who doesn't know anything about startups, never made an angel investment before, and thinks they're big shit because some celeb picked them out of a hat to look at deals for them. I'm sorry, but I can't take those people seriously. Celebs are better off investing in a few funds and working with the VCs in those funds that they've built a trusted relationship with to vet deals for them.Don't ask for a s [...]

Why I Fucking Hate Unicorns and the Culture They Breed Bothsidesofthetable Sep 28, 2015

Something is rotten in tech startup land. Don’t call me a hater for saying so. It’s not that I’m anti innovation or a disbeliever in disruption or calling it a full-scale bubble or saying every darling startup is going to fail. None of those. Still. Somebody posted too many party fliers. The uninvited crowds have […]

Leave Money on the Table Thisisgoingtobebig Sep 23, 2015

I was having a conversation last night with another VC who was suggesting I monetize the pro-ratas that I don't take by creating SPVs. As a small fund, I've been writing one check only to a company to help get them off the ground that that has served me really well so far.

"But you could charge fees or at least carry for that... You're leaving money on the table!" he said.

I said, "Dude, I run an $8 million fund and I'm about to finish raising a $15 million fund. I'm the King of Leaving Money on the Table."

For me, I'd rather have a very simple, straightforward business model--one where no one has to think to figure out if I'm giving advice on your next round based on some special vehicle or deal I have on the side.

It made me think of an investment I just made where the entrepreneur found an extremely profitable niche that he is already taking advantage of. He was pretty flexible about terms because he felt like he was going to make so much money that the terms of the deal didn't really make that much of a difference.

My favorite ice cream shop, Ample Hills Creamery, has some flavors that are less profitable than others--but that doesn't stop the shop from making them. They could probably make more money replacing these flavors with simpler ones, but they wouldn't be Ample Hills if they did.

That's the kind of company you want to fund as an investor--not something that only gets big when you need to squeeze every last dime out of the opportunity. You're never going to be able to do that as a startup, and often times that comes at the expense of your user experience and happiness.

Same thing happens with people.

Who wants to be around someone who counts every last penny and never misses an opportunity to cash in.

Those aren't the kind of people I want to be around and it's not the kind of relationship I want to have with a company. It's definitely not the kind of relationship I want to have as an investor.

The Nature of Greatness Thisisgoingtobebig Sep 14, 2015

I was talking to someone recently about striving and desiring to be great at what you do. That brought up the question of what makes someone truly great at something.

We refer to people as "great entrepreneurs" in the startup community all the time--but are they? I've noted for a long time that too many people have untested, hollow reputations based on things like social proof that go untested. How many founders have made hires, especially consultants, who were supposed to be great that didn't turn out to be? Ask around for recommendations of who is great at marketing, PR, or anything else and you'll get lots of answers--and probably few of these folks have actually achieved "greatness".

So what makes someone great?

In sports, when I think of greatness, Greg Maddux is who comes to mind. It wasn't so much that he was successful. A lot of people have great stats. It was the nature of his success.

Maddux seemed to understand how the machine worked better than anyone else. It was like someone gave him the instruction manual on how to pitch and no one else had it. He would count in his head how long fly balls were in the air, and get annoyed if he got to a certain count and the ball wasn't caught--because an outfielder should be able to get to a ball staying in the air for a certain amount of time.

One time, he was sitting next to a player in the dugout and told him that he should move or he's going to get hit with a foul ball on the next pitch. Sure enough, the very next pitch sent a screamer his way.

The great ones have a deep working knowledge of the systems around them that they are able to exploit for their own purposes.

This next one is easy. If you're truly great, then mastery on your level is rare. If everyone is doing what you're doing, then how hard could it really be. When Babe Ruth hit more home runs than any other American League *team* did at the time, that was pretty serious. When you can't think of anyone else doing the kinds of thing [...]

Be Someone that People Want to Work With Thisisgoingtobebig Sep 1, 2015

I mentioned this in my newsletter yesterday and decided to make a post out of it.

People ask me all the time how you find talent, money, etc.

My startup Golden Rule is this:

Be someone that people want to work with.

That's how you get funded. That's how you get hired and how you can hire the best people. It's why you get press and even how to get customers.

It's key to getting into venture capital.

If you were driven to be the very best person anyone could ever hope to work with, you'd go on to do amazing things.

That means you'd have a skill to offer--one that you strive to improve on everyday. You're constantly learning. You listen. You're well connected. You're pleasant. You're curious. You're calm under pressure. You work both smart and hard. You're thoughtful. You enjoy helping others and want them to succeed. You are innovative. You aren't stuck in your thinking.

When I set out to raise my next fund (which is thankfully going quite well), I wrote the deck based on why I thought others would want to work with me--because it seemed like the only important question you had to ask when considering a VC.

Follow anything more specific and you run the risk of losing the context of why something worked for someone else.