Sep 11, 2017 · 29m · 20vc
20VC: USV's Andy Weissman on The Future of The VC Industry, Why USV Does Not Vote On Investment Decisions & Why VCs Should Be Invisible
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews Andy Weissman, partner at Union Square Ventures, about USV's consensus-driven investment approach, fund management mechanics, and the future of early-stage venture capital. Weissman details why disciplined process outweighs market foresight, how emerging models like ICOs and algorithmic investing impact venture capital, and why investors should prioritize founder visibility over self-promotion.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 30.2% of the talking time here. How this is scored →
Harry as informed peer 4.9 Guest teaching 4.4 Guest disagreement 2.4 Harry pushing back 3.5
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 23:10 VCs Should Be Invisible
Andy rejects the self-promotional culture of modern venture capital, arguing that VCs are merely service providers who should remain opaque and invisible behind their founders.
Hardest push from Harry ▶ 23:34 Harry Disagrees on VC Brand ValueHarry explicitly refuses Andy's premise that VCs should be invisible, insisting that strong fund brands provide vital commercial validation for enterprise startups, ending with 'I fundamentally disagree'.
Biggest teaching moment ▶ 9:31 Reframing Valuation Dogma with Fund MathAndy counters Harry's quote from Peter Fenton about valuation traps by educating him on fund portfolio mathematics and explaining how disciplined process overrides individual deal FOMO.
Harry holds his own ▶ 21:09 Historical Counterexamples to Quantitative VCHarry uses his deep historical knowledge of early-stage software investments to refute quantitative investing, citing pivot histories like Instagram/Burbn that algorithms would have rejected.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Welcome and Opening Pleasantries | 3 | 4 | 2 | 1 | Harry introduces Andy with enthusiasm, while Andy playfully deflates VC myth-making by explaining how he stumbled into the industry after USV rejected his startup. Andy turns the interview dynamic back onto Harry by asking about his experience interviewing thousands of VCs. | |
| Evolving Process and Collaborative Decision-Making | 4 | 5 | 1 | 2 | Andy quotes John Kenneth Galbraith to explain his comfort with uncertainty and why USV prioritizes firm-wide consensus over individualist deal-making. Harry prompts Andy on how firm process differs from individual partner methodology. | |
| Learning from Lost Deals and Price Sensitivity | 6 | 5 | 3 | 5 | Harry cites a direct quote from Peter Fenton warning against valuation traps to challenge Andy on losing a deal over price. Andy responds with fund portfolio math, clarifying that discipline and process matter more than trying to win every individual deal. | |
| Single-Office Constraints and Reserve Allocation Strategy | 6 | 4 | 1 | 2 | Harry displays strong technical understanding of fund mechanics by bringing up two-stage conviction building and target recycling percentages like 120%. Andy enthusiastically breaks down USV reserve strategies and Monte Carlo simulation modeling. | |
| The Future of VC, ICOs, and Alternative Capital Models | 4 | 6 | 2 | 3 | Andy reframes traditional early-stage software VC as a hyper-specific allocation craft that may not apply to ICOs, hard sciences, or consumer goods. Harry asks Andy to elaborate on why industry insiders should remain skeptical of crypto disruption. | |
| Archetypes of Value-Add VCs and Quantitative Models | 7 | 4 | 3 | 6 | When asked about ideal VC archetypes, Harry asserts his own strength in capital raising and highlights operator value using Jeff Jordan as an example. When Andy posits quantitative early-stage models, Harry directly counters that purely algorithmic models would have failed to fund non-obvious successes like Twitter or Instagram. | |
| Why VCs Should Be Invisible and Public Investment Memos | 6 | 4 | 5 | 7 | Andy presents a contrarian stance that VCs should be invisible, opaque, and secondary to founders. Harry strongly pushes back, arguing that prominent VC branding provides essential social proof and enterprise buyer credibility for portfolio companies. | |
| Quickfire Round: Books, Mentors, and Unconventional Beliefs | 3 | 3 | 2 | 2 | In a quickfire round, Andy gives idiosyncratic answers regarding Jack Kerouac novels and quality footwear, while playfully refusing to name his mentors. Harry attempts to press him to reveal names before moving along smoothly. |
Statements from this episode (15)
USV repeatedly rejected Betaworks before making co-founder Andy Weissman a partner
“And as a New York company, we wanted what we thought the best and smartest and most empathetic venture investors in New York to invest in our company, which was USV, so we kept pitching them, and they kept saying no. They rejected my company as a business”
Andy Weissman: Venture Capital Success Stems From Process, Not Foresight
“And so, I believe that a large, if not the largest part of that, is about the process you create to make those decisions, and if you have a process, and you perfect that process, and you stick with that process, sometimes it works, and that's luck, right? Whet…”
Andy Weissman lost a major deal by over-indexing on valuation
“I made a mistake by losing the deal, and I got stuck on price is probably why I lost it.”
Weissman: VC funds only need a few right decisions per fund
“Well, that's okay because with this business, we actually don't have to be right every time we have to make a decision just a couple times each fund.”
USV does not vote on investment decisions, relying on consensus
“Well, as a firm, we do not vote. We have a conversation, and that conversation leads to a point where everyone is comfortable with the parameters of an investment”
Andy Weissman: USV operates from one office to keep partners together
“So for example, I believe this is a methodology that works best when everyone is in the same room, so therefore we only have one office.”
Andy Weissman: USV invests in 8 to 10 companies annually
“So we view ourselves, and we don't invest a lot, you know, maybe eight or 10 times a year, so we're long-term, very engaged partners, so that means we reserve full amounts for our companies, and we generally keep investing in them.”
Andy Weissman: Capital recycling reduces effective management fee ratios for LPs
“Everyone wins with recycling. It's so good for your LPs. It's additional investment dollars that they're not paying management fees on, and so over the course of a fund, if you take gains and you reinvest it, that's more money that you're investing that lowers…”
Andy Weissman: USV recycled capital in each of its last three funds
“I think every one of our last three funds, I don't, can't recall a situation where we haven't recycled in the early stages of the fund”
Weissman: Traditional VC works near-perfectly for software, but nothing else
“I believe on one point that early stage software technology based venture capital is a near perfect craft for what it does. And by that, I mean, it is a near perfect allocation of a certain type of capital, risk capital, into endeavors that are focused on retu…”
Weissman: ICOs act as an external catalyst for financing innovation
“Part of what is exciting about ICOs, if one believes in what's happening, and there are lots of Reasons to be skeptical is that they are resulting in an external stimulus for change in financing structures for a certain type of sector”
Andy Weissman: USV's fund structure has not changed in 30 years
“Because what we do is, in a way, we're very conservative in the structure, and we look like this, we look like the same VC, way VC firms looked 30 or 40 years ago. Our structure has not changed at all.”
USV has invested in quantitative funding models like CircleUp and Numerai
“We have made investments in other sectors where we believe the answer to that question may be yes. We've done that in consumer products with CircleUp. We've done it in quantitative hedge type financing with Numeri.”
Weissman: Venture capital is a service business and VCs should be invisible
“By the way, I don't believe at a fundamental matter, I'm old fashioned in the way that I believe actually VCs should be invisible, you know, and so I know you ask this question to a lot of people, what would you like most like to change in the world of VC? I'v…”
USV publishes a public blog post as its investment memo for every deal
“We're public about every investment we make. In fact, our investment memos are our blog posts. You know, when we make an investment every single time we write a blog post explaining why we made that investment, that acts as our internal and external investment…”