If I was critical of USV, I would be critical of the fact that we don't spend enough time on the founders. I got really lucky. I backed these two founders, Ron Shriber and Jordan Levy. They were already on their second company and I showed up at the first board meeting and I started telling them, 'Well, I think you should do this and I think you should do this.' And Jordan just like stopped me dead in my tracks and he said, 'If you come up here and you do every job in the company for a week, then we'll let you give this advice, but not until you do that.'
An investment we kind of made recently in FOMO. We first met that company in September 2025. We decided to pass. I remember sending them an email begging them to angel. I think they had offered and then I said no because it was a bigger check than I was willing to write. It's a hard thing in the venture business when you miss something and then you realize after the fact that you made a mistake, trying to get back into the investment, and the company tripled or quadrupled in size between when we realized we had made the mistake and when we actually got to make the investment. Being in venture capital for 40 years, I'm used to the industry working a certain way, and when somebody comes in and disrupts it, like Paul Graham comes in and creates Y Combinator, and you know that was a massive innovation in the venture capital industry, if you're kind of stuck in your ways you're going to look at that and say that's dumb.
I grew up in a business that was a lot more collaborative than the one we're in today. Now it's not really like that anymore. And I think you got to scrap and claw your way into rounds now. And you can't expect other firms to help you. I think you have to treat every single situation kind of like a jump ball or a rebound. And you're going to go get it.
Yeah. Someone's going to get it, so you're going to get it.
Do you have enough material?
So, Cinnamon sprung this on me, I don't know, 24 hours ago, and he said, 'Let's just chat with Fred.' I said, 'Sounds good. Where do I start?' I sat with myself for 10 minutes, and I thought, 'Well, you know what? I always find myself in conversations with friends talking about a topic. It could be equity option pools for a new term sheet, it could be topics around where technology is going. And in the course of just researching that topic, there's always an ABC blog post that comes up and I'm like, well, I feel like I'm always sending something.' So, I went through my texts. I literally searched ABC, looked for the last three things I've sent in the last week to somebody. I think the one I sent last week was I was having a debate with Matt Mandel about, you cited, I think you wrote this post maybe 13 years ago. It was a quote of a Don Valentine 2x2.
Yeah. Where he had difficult founders, easy founders, and then like easy to work with, hard to work with, and then kind of like good businesses, bad businesses. And the debate we were having was if you look at like entrepreneurs today, it almost feels like tech has softened, like it almost feels like everyone is nice.
Yeah. This is, you're referring to a story that Roloff Boa told me. And Roloff, who ran Sequoia for many years, recently passed the baton there to the next generation. When he arrived at Sequoia in the mid-2000s, so-called 20 years ago, Don Valentine was still there and Don walked him into his office and showed him a 2x2 matrix and on one side it was good founders, great founders, and then easy to get along with, hard to get along with. And then he pointed to the upper quadrant which was great founders, hard to get along with. And he said, 'We make all our money here.'
Yes. And Roloff told me that story, and I can't even remember why Roloff told me that story, but I'm sure we were having a conversation about working with challenging founders. I don't think it's really so much about nice or not nice. It's just that some founders are stubborn and they kind of want to do things the way they want to do things and they're not inclined to explain themselves. And you just wake up one day and they've pivoted the company and they didn't even bother to tell you or whatever and you're like, well, you know, we do own, you know, 10 or 15% of this company. But I think Don's point was that it's those founders who often you'll make the most money with.
And just last week in preparation for our CEO summit, which we're at right now for two days, we're going to be in a bunch of different sessions with our entire portfolio, I was talking to Mark Pinkis, who I'm going to interview tomorrow. And one of the three things that Mark and I are going to talk about is what he thinks founder mode means. And in his mind, founder mode means when a founder can stay true to their instincts and not let their board push them in a direction or not let their management team push them in a direction, but they can will the company to do the thing that they want. And I think that's kind of the same thing that Don was trying to explain to Roloff, which is that it's those sorts of people that you make all the money with.
Do you think that still holds today?
I do. I do. In fact, I mean, if you look at the biggest characters in tech, the ones who are making all the news right now, they're all like that. I do think that great founders have great conviction and great courage and maybe are not all that great at communicating. They know where they want to go and they go there.
Literally, I literally did an iMessage search and I searched ABC. The second article I'd sent, this is like maybe eight days ago, was on types of investors. It was like career investors versus founder investors. It's another decade-old blog post, I think. And the gist of your point was that there was more and more operator and founder investors. This is maybe 10 years ago. Despite that being true, you yourself were more of a career investor, and there's still a lot of them out there. You're basically saying, you know, either can work. The reason I sent that post to someone was I think it was in the context of myself. I was an engineer before I joined USV but I've never been an entrepreneur and you know as I plan to continue doing venture capital for a long time. The thing that's been on my mind a lot is, okay, well, what are the things you need to really work on if you're coming from an investor angle? And one of them is like having that natural both empathy for the founder but also ability to help in some way. I don't think most founders necessarily expect to get an immense amount of help from their investors, but it's nice to be able to work with an entrepreneur deeply in sport. I think that comes very naturally. Like when I watch, when I observe Mike or Jared, you know, work with an entrepreneur, it comes from a very different angle and there's weight to what they're saying. Well, over time, I imagine like you've been able to cultivate weight and good helpful advice just because you've been doing it for so long. You've seen a lot. But early on, how did you think about that relationship?
It's a really hard thing to do young, early in your career when you're a young venture capitalist and you want to give a founder advice and they look at you and they're like, 'Well, what the hell do you know?' Right? And that's where somebody like Mike or Jared, our partners who have been founders, have a lot of credibility because when they tell a founder, well, you know, I had that problem at XYZ company and this is what we did. You know, that's really useful for a founder. And if you start in the venture business, I started in the venture business when I was 25. How old were you when you showed up at USV?
There you go. So, and by the way, I was a software engineer before I became a VC. So, we have the exact same trajectory, more or less. Yeah, it's really, really challenging. I think that you have to work a lot harder to understand the business and gain the founder's trust. If you do the work and the founder sees you doing the work, to get to know their team and to get to know their business and understand their products, really use their products, you can earn their trust. But it's not a given, particularly, you know, early on in your career. So I think you have to work harder.
That makes sense. Is that what you felt like you did early on?
I got really lucky. I backed these two founders, Ron Shriber and Jordan Levy, when I was 29 and they were maybe 35 or 36 and they were already on their second company. And I showed up at the first board meeting and I started telling them, 'Well, I think you should do this and I think you should do this.' And Jordan just like stopped me dead in my tracks and he said, 'Listen, if you come up here for a week,' this was Buffalo, New York, 'and you do every job in the company for a week, then we'll let you give this advice, but not until you do that.' So, I got in a plane like, I don't know, three or four weeks later, and I went up there and I did customer support and I sat next to the engineers and I sat next to the marketing team and, you know, I quote-unquote did the work. And then after that they were at least willing to put up with me a little bit more.
You know, as we've kind of worked on a couple things together, you're not always, when you're giving advice, you know, looking to give the answer. But one thing I find that you do really well is clarify what people are working on or maybe put it in terms that are very understandable. So I think one of my takeaways from observing that is, you know, it doesn't always have to be the advice. It can always just be, you know, if you are doing the work, if you understand the business and you're just helping talk it through, I think you're going to land in interesting places.
I do think that I have a gift, which is I can simplify things. And one of the things I can help founders do is craft sort of a very simple story that they can tell when they go out and raise money. Businesses are complicated and founders sometimes are caught up in the weeds of their business and investors really need a simplified version. And so I'm pretty good at that. And as part of that skill, I've also got quite good at really trying to frame what the question is that we're trying to ask, whether it's in a board meeting or just a conversation. Sometimes reframing a little bit for the founder. 'Oh, are you trying to decide whether to do this versus this?' And the founder's like, 'Yeah, that's what I've been telling you for 20 minutes.' And I'm like, 'Well, I don't think we understood that, but now that we understand that, we can, you know, give you that advice.'
There's another thing that's been on my mind a lot, which is like this whole concept of conviction, right? I think it's core to the top of the funnel, the work we do, which is actually making the investment. And you said something to me like maybe a half a year ago where I was saying, well, you know, like I've always liked investing. I've always been like a trader and investor. I've made angel investments. But you know, that's like my personal capital, it's different. I'm able to, like, I'm more comfortable taking risk. And you basically said, well, you can't really treat it that way. You have to kind of just think about it as one and the same. Do you ever feel like that was something that you wrestled with?
I did. It took me a while to think of the venture capital firm's money as my money and approach investing, I'm thinking of the first firm I was at, Uklid Partners, approach investing our firm's money the way I would invest my own money because I was early on in my career was hung up with convincing my partners to do something and you know, would they like it or would they not like it. And I kind of ultimately realized I have to like it first and then I have to convince them to like it and that's what it is and I can't really worry about whether they like it or they don't like it. I just have to decide if I do and then I have to convince them. And that's the point about conviction. And I think you can overcomplicate the investment business if you start thinking about I'm a steward of someone else's capital or I have partners, I need them to agree with me. And it's really about do I think this is a great investment. If I think it's a great investment, then I'm going to figure out how to make that investment. I'm going to figure out how to get the people I need to go along with me. And that's essentially the advice I was giving you at the time.
There's an investment we kind of made recently in FOMO. And we first met that company in September 2025 and we had a discussion around the deal and it was moving quickly and we decided to pass because I had met the company and around that same week I started using the app. After that, I kept using the app and I kept using it more and more and then I was like, 'Wait a second. I think there's really something here that I missed.' And so I sent Paul and Say an email. At this point, we had just passed as a firm and I knew they'd already chosen another investor. I didn't know which, but I knew they'd already got the deal done. So I was like, okay, we missed our chance, but you know, I should probably angel invest in this thing. I love this app. So I remember sending them an email begging them to angel invest. Because I think they had offered and then I said no because it was a bigger check than I was willing to write. But then I was using that more and I started begging and then it struck me as I was in the middle of this beg email. I was like, wait a second, like we should be doing this from USV. Like if I'm going to get here on an angel investment, if I have this conviction, it took me a second to like reframe, I should treat it the same way at all times, right? And then so I sent a new email that same day saying I think there's something here, I think we missed something. It's a hard thing in the venture business when you miss something and either you pass on it and then you realize after the fact that you made a mistake or you didn't even pay enough attention to it and you missed it and then you realize you made a mistake and then trying to get back into the investment is very hard. You and I pursued that opportunity for probably six months before we got the opportunity to invest in it. And the company, I think, tripled or quadrupled in size between when we realized we had made the mistake and when we actually got to make the investment, but I'm glad we did. And I think, you know, credit to you for realizing that we had messed up and made the wrong call. I think sometimes it's like human emotion, like, 'Oh, I screwed that one up. I'll go find the next one.' And like you said, like maybe I could just, you know, get into the next round or whatever it is. And we did that. And I think we are very pleased that we did that.
Yeah, definitely. It was also a lot of fun to try to chase something down. I don't know if we take that motion with as many investments at USV.
Well, it's kind of interesting how we did it, right? Like we went and saw them and we explained to them why we were convinced that we had made a mistake and that we really wanted to get in and spent the time with them to at least convince them that we really did buy into their vision. We went to their holiday party. You know, I think that was a lot of fun and you know, I think they really appreciated that and you know, it was like a lot of that right over three months, four months, five months, just really, you know, continuing to build the relationship to the point where, you know, we made a couple of offers that they said no thank you to and didn't get upset, you know, we were totally, you know, gracious in those interactions when they said no thank you. And you know, over time, you know, it worked. So there's a real lesson there. Like I don't think that I was good at that early in my career because I'm pretty competitive and you know, when I lose something, I kind of get a little annoyed about it. But I think in that moment, we really did a pretty good job of chasing it down.
Definitely. The competitive comment reminds me of another thing I've been thinking about, which is it feels like, and I could be wrong about this, venture at the early stages has become less collaborative than it once was. We often talk about how we made this investment in Uniswap, that was a great investment for the firm, but we were a minority investor there. A lot of people came into that deal. I don't see as many deals in our portfolio that have that structure. And I don't know if you think that should shift how one pursues venture capital.
Well, you know, I grew up in a business that was a lot more collaborative than the one we're in today. And so my natural instinct has always been syndicate investments, share investments, and then the venture capitalists that I share investments with will share them back with me. And that was the business that existed for, you know, most of the last 40 years. But now it's not really like that anymore. You got to kind of scrap and claw your way into rounds now. And you can't expect other firms to help you. One, I don't think they can. It's not like a founder is going to, you know, give an allocation to another venture firm because some other venture firm tells them to. They're not going to do that. They're going to allocate it how they want it. But it's also the case that venture firms are getting larger and larger and larger and they just have their own needs to put large amounts of money to work and so the business has just gotten much, much harder in that way. So you just have to, I think you have to treat every single situation kind of like a jump ball or a rebound and you're going to go get it, right? You know, because someone's going to get it. So you're going to get it. You have to win with the founder and they have, or founders, and they have to decide that they want you in the investment.
We recently made this investment in News Research, the people who make Hermes. And we ended up not being able to lead the most recent round they did because they were raising so much money that we just didn't have, we couldn't write a big enough check to lead the round. We made them an offer to lead a much smaller round. They said no thank you. And then so then we quickly went into, we got to get an allocation. And so every chance we got, we introduced them to other investors. We introduced them to some corporations that we thought would be good partners to them. And ultimately when the round came together, we got an allocation. So that's the way the game is played now. And you just got to, you got to prove when the round is going on that they want you in on their cap table and they want you around the company because you're going to increase their chance of success. And if you can do that, then you know more times than not you can get an allocation. So it's way, way more competitive now.
So let's talk a little bit about you. So you have made the decision to stick around at USV.
I basically, three years, nine months. Yeah.
And you came into USV, I guess, at 26 as an analyst and as part of our standard analyst program, which is a three-year program. And at the end of that program, we essentially said, you know, do you want to stick around and grow into a partner at USV? And you thought about that and ultimately concluded that you did.
Yeah. Well, it's a funny exercise actually because, you know, the USV program is known to be a fixed-term program and it's advertised that way up front. So I had no qualms about that or hesitations. And one nice thing about that is everyone comes in very aligned, you know, about you hit the six-month out mark or nine-month out mark, everyone kind of is talking to you about like what do you think about next, how can we help you. And because of that process I actually got to go through like a very interesting exploration. I talked to I think maybe, you know, 50 other venture capital firms over the course of six months, got to really force myself to like evaluate, you know, what is out there. And every shape and size of firm I got to see, I got to see how they think, I got to see how they talk and I learned a ton. I mean, it just, I think I came back from that process saying, 'Well, here's what I like. Here's what I don't like.' A couple things, you know, stood out is, you know, a lot of firms have fantastic investors. Not all of them are necessarily people you want to work with day in, day out. Another thing is a lot of teams are more collections of individuals than real collaborative team environments, which is not to say one is better or worse than the other. You know, there's firms out there that are fantastic and they run very much as solo entities and there's also firms that have great returns in the other direction. So I don't think one is better than the other, but I think it was a productive exploration to figure out what I like and what I don't like. And yeah, I'm really excited by the opportunity.
When you first came into USV, you really understood crypto, blockchain, stablecoins, DeFi, that whole world. And we really leaned on you to be sort of a subject matter expert there in the first few years. But we also encouraged you to spread your wings so that you could be a generalist because at its core, USV is a generalist firm. What would you say are the areas that you were able to come up to a level of expertise in over the last couple years to kind of meet you where you already were with crypto?
It's a great question. The areas that come to mind the most are honestly areas where USV spends time because that's where I've been able to learn, which is one is energy. I feel like my understanding of how a lot of our portfolio companies work and how that space works has leveled up an immense amount while being at USV. I was an engineer before USV, still like to play a lot with all the tools out there. So I think I gravitate a lot towards like developer-facing AI tools. And the third area, which is kind of a newer exploration for USV, is biology. I've increasingly spent a lot of time there. That one's a really fun one because I think we all are, you know, convinced and convicted that it's an important place for us to spend time but we haven't made that many investments there. But you really pushed an insight on us that has been helpful, which is that biology is really moving from like a wet lab type of process where innovation happens in a traditional lab to one where it's really more like software. There's large models and biology is effectively becoming more programmable.
And so programmable biology would be maybe the term for the things that we're most interested in.
Yeah, I think that's right. It's becoming much more of an engineering discipline. And I think we're seeing that in a lot of the entrepreneurs we're meeting. We're meeting a lot of entrepreneurs who don't necessarily come from traditional bio backgrounds. And so I think it's really exciting. I think in many ways it opens up the domain. One, we're just going to see way more top-of-funnel drug exploration as we're moving into more of an engineering discipline, but also just like way more, I think, entrepreneurs will take a stab at building because I think it'll be more approachable to them. So I'm really excited about that. For me, you know, I came in with a lot of knowledge on crypto and financial services. Took me a while to build up that knowledge and, you know, spreading my wings into other areas I think will be a long exploration and a long journey. I'm curious how you have handled that over the years.
Well, I learn the most from making investments. I don't make investments to learn. I think that's a bad reason to make an investment. But if we make an investment in a company in a relatively new area for us, like when I invested in Coinbase back in 2012 or whenever it was, you know, that was basically an introductory class in crypto for me. And you know, at a time when the industry was still pretty nascent. And so I got to know a lot of the people who were sort of the leading entrepreneurs in the sector and all of the key sort of technologies and market opportunities. And so that was very helpful to me. And so like if we wanted to get deeper in programmable biology, I think one thing that I feel like we need to do is to make some investments and then that'll just naturally lead to more knowledge. We'll just start to learn more by working with those companies and those founders.
I guess there's sort of like a, you know, a bit of like a catch-22, which is chicken and egg a bit, when there's areas that you knew when you made, for example, like some of your early investments in energy. Is there like an extra leap of faith there where you're like, I don't necessarily understand all the aspects of this domain but I'm willing to take, I'm willing to like, you know, be comfortable with those unknowns.
Yeah, I think sometimes it's better when you know a little bit less because you can take some leaps of faith. Like if you think about Radiant, which is a nuclear reactor company that, you know, I led the first round in that company, the first venture round in that company, and the idea was to make really, really small nuclear reactors, one-megawatt nuclear reactors, and to mass-produce them, literally like make a factory that's just spitting out nuclear reactors. And you know, if you need five megawatts, well then you just stack five one-megawatt reactors. And it was just a very radical idea. And you know, when I talk to a lot of sort of people who had spent 20, 30 years in the nuclear industry, they're like, 'That's crazy. That's not how reactors are built. You know, reactors are these huge construction projects that last, you know, a decade long and they're regulated and it's a very, like, this is just a crazy idea.' But, you know, my career is a career where I watched, you know, computing go from these huge mainframes down to like phones in our pocket or, you know, networks go from super large networks to, you know, super micro networks. And I've just seen again and again and again that these large centralized systems eventually get broken down into really, really small, much less centralized systems. And I just thought, well, why wouldn't that also be true of nuclear?
reactors? And so I was drawn to this idea that I think maybe had I known more about nuclear energy, I would have talked myself out of. So I don't think it's necessarily a bad idea to come into a sector a little naive. I think too naive is a bad idea.
But a little naive sometimes I think can be a good idea. And I think some of the computer scientists are coming into biology now who are not necessarily biology majors or biology PhDs but are bringing a knowledge of, you know, artificial intelligence and how you create models and how you train models. They're going to bring some breakthroughs into the area of biology that biologists couldn't have gotten on their own. Because when you worked in an industry for 20 or 30 years, you kind of get caught up in the way that the business works and it's hard for you to kind of imagine these radical things. I mean, venture capital for example, you know, one of the disadvantages I have of being in venture capital for 40 years is I'm used to the industry working a certain way.
Yeah. And when somebody comes in and disrupts it like Paul Graham comes in and creates Y Combinator and you know that was a massive innovation in the venture capital industry that happened in like 2006 or 2007. And it really kind of reshaped how the earliest stages of company formation happens. You know if you're kind of stuck in your ways you're going to look at that and say that's dumb. Like we don't want to touch that. Yeah. And a lot of people that were in the venture industry for a long time looked at that and felt that way. But fortunately, you know, we didn't and we embraced that. And now, you know, there's a lot of new stuff happening in venture as well. It's important to be open-minded, I think.
I mean, speaking of that, I would say there's a couple major shifts that have happened in the last 10 years. I'd say Andre was probably the first to do it which was really pursue venture capital as a business really scaling to touch every part of the stack of business and many people would say that you know that trend of larger firms more capital has created sort of a bifurcation where it's really hard to play in the middle and maybe the middle looks like not to put a number on it but like you know you're not a small fund but you're not a mega fund and the mega fund can kind of throw their weight around in unique ways and small funds can stay small and USV we're gravitating not exactly to the middle. I'd say we're still on the smaller side for a lot of the industry, but I'm curious kind of how you think about when these innovations come. You're trying to stay open-minded. But you also don't want to play everyone else's game.
The institutionalization of venture capital that Andre Horowitz, you know, really led is a fundamental change to the business and one that I think, you know, is going to be long lasting. And I'm not convinced that there's any size venture firm that isn't at some level at risk because there's nothing stopping, you know, a firm that manages, you know, 50 billion or 100 billion from making a seed investment. They may talk themselves out of it because they're like, well, how could a million dollar seed move the needle for us? But, you know, they could have scout programs. They could do seed in ways that maybe is a more scalable way to do it. I think it's the new normal and that's how the venture business is organized and the largest players and the largest platforms have the most market power and I think that for a smaller firm like USV I think we have to be honest with ourselves that we're at a competitive disadvantage with them in many ways getting bigger probably is a logical move but it's hard to get a little bigger right cuz they raise capital at a scale that we don't raise capital at and they, you know, are organized at a scale that we're not organized. So, you know, I don't think it would be simple for us to copy what they've done. And I'm not sure it would be healthy for us to do that, but I do think it changes the competitive dynamic in a way that doesn't necessarily favor us.
And do you think like if you were, you know, if you're USV or advising a manager and you take this dynamic and you want to create an advantage position for yourself, you know, one thing that we've found, I think at USV, we find ourselves going earlier.
Right. Do you think that's probably the main answer?
I think go earlier, domain knowledge, become a recognized expert in a domain. So that founders look at you and like, oh, I want that person. They really know my market really well. And I think also maybe willing to deal with some things that you know maybe have a few complications on them. You know that could be a regulatory complication or it could be you know a geographic complication or something where a big platform might struggle a little bit cuz it's not you know a strike right down the middle.
So we, you know, you mentioned APD.
They've rebranded to Panandina.
Panandina they changed their name.
Well, the P in APD was a Torid Pandina. They dropped the A.
So, it's Pandina. Even I can say that. So, that's a company in Colombia. I think there's plenty of large platforms that would be comfortable investing in Colombia, but you know, maybe not, you know, in the trenches kind of work in the market quite the way that you know, we have now in that company we have Audi, we have Somos, and we have Penadino. We had three companies in Colombia. Now, you know, I don't think we're going to be opening a Medellin office, but you know, I think geography of that sort can be a little bit of an advantage, too.
The geography piece is really interesting to me, you know, because we're going through a period of immense price inflation valid or not in the venture industry. And it's largely centered around very known pockets of talent. I think you know people will cite if you just look year over year and just if you use YC as kind of a market benchmark we're like 3x the seed prices we were about two and a half years ago maybe even 4x now. And so the geography is interesting because there's I think a lot of people are looking around thinking okay this math pencils if your business is a trillion dollar outcome.
I know where you're going with this. I'm going to interrupt you because I wanted to share with you this thing that I was thinking about. So, we have two companies that are existing USV portfolio companies that recently gave us updates and they have businesses that are growing very quickly now. And when I asked them, you know, what kinds of margins were they making, you know, on like 30 million of revenue, they were producing like $25 million worth of profit. Like I cannot remember a time when we had companies who were generating like EBITDA profits not gross margins not even like contribution but like EBITDA margins of like 80 or 90%. Now part of it is that they don't have to build large software engineering teams anymore because they're using all the agentic coding techniques and you know marketing has become maybe a little bit more automated. You know, they don't have large sales forces. Customer support now is largely automated. You know, if companies truly are a multiple of cash flow and we just saw an order of magnitude growth in how much margin a company can generate out of revenue, then maybe an order of magnitude bump in valuations does make sense.
