Infrastructure VC Relies on IP; Application Layer Requires a Thesis
Brad Burnham · 20VC: USV's Brad Burnham on Co-Founding USV with Fred Wilson, What They Look For In Potential Partners & Whether We Are Entering a Period of Consolidation or Expansion · Jul 13, 2016 · at 15:32
Brad Burnham, co-founder of Union Square Ventures (USV), explains why USV uses a thesis-driven approach for application-layer investing rather than an opportunistic deal-flow model.
0:00 / 0:35exact quote · 36.0s
720p mp4 · rendered on demand · StarZero watermark
“When you move from the infrastructure layer, where I think Investing is really defined by technical differentiation and intellectual property defensibility. You know, they're, I think, being more opportunistic, more deal flow driven, made perfect sense. When you move up into the applications layer, having a thesis for why you think, you know, humans are going to interact with a certain set of services in a certain way, and how those services are ultimately going to be defensible and scalable. I think helps organize your investing activity.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Brad Burnham
Late-Stage Private Valuations Are Unsustainable and Face a Market Correction
“I'd argue it's probably not that healthy, and that you're actually seeing some very weird dislocations when, you know, the scarcity of equity in the private capital markets for the real dominant market players, you know, you end up bidding up the, in the price…”
Big Tech Dominance Makes Creating New Consumer Web Unicorns Difficult
“We're now in a world where, you know, we're seeing really dominant market power, Google, Apple, Facebook, Amazon, you know, creating a new set of unicorns in the face of that market power is going to be very difficult, certainly in the consumer-facing web serv…”
USV's 2004 Fund Had Four Investments Each Return the Full Fund
“We made investments in Zynga, Twitter, Indeed, and Etsy within about a six month period. In our 2004 fund, each of those returned the fund.”
USV Created Venture Partner Role for Albert Wenger for Sourcing Etsy
“Been very actively involved in Etsy early on and brought Etsy to the partnership. And we created a venture partner role for Albert to, you know, to sort of compensate him for having brought Etsy to the partnership.”
USV Will Add Partners Slowly and Remain in a Single Office
“It'll always be a slow process for us. We think these partnerships are, you know, the dynamics of the partnerships are very, very important, and we'll continue to, you know, as we Add people. We'll do it very slowly, and we'll do it in a single office, and we'…”