If I was starting a venture capital firm today from scratch, there's only three things that I would be focused on. The humans in the firm doing. Startups have to play chess. They have to see three or four moves ahead. I'm not suggesting we all like $25 million on fire. But getting it wrong is just a byproduct of the kind of investing we do.
I would like to show you something, something we have never talked about. All right, look at this. Holy crap.
What's up? Good to see you. Thanks for joining us. How's it going?
It's nice to meet you. In the namesake of the fund right below, that's George Washington, right?
It is George Washington. This is Union Square.
It feels like an appropriate place to start. Why don't we go sit at a bench?
Obviously, you're so associated with New York now with Union Square. Like in my mind, you're like the quintessential New Yorker, sports fandom, etc. But like I don't know how you became a New Yorker because you're not from here, right?
Well, I think that the secret is that I didn't grow up anywhere because I grew up an army brat. I literally moved like 20 times in my life before I came. Yeah. And so when I landed here, Joanne and I landed here. We came to New York together. We both were just like, we're going to become New Yorkers.
83. Wow. Yeah. I was like, I got to pick sports teams. So, I had to pick my sports teams and we lived in Manhattan and you know, we lived in this neighborhood actually and you know, we became regulars at spots in this neighborhood. Like, we became New Yorkers.
The interesting thing about you saying you had to choose your sports teams, obviously you and I, we talk a lot about sports, we talk about the Knicks, we talk about the Mets. I was born into the sports fandom of the pathetic New York sports teams like the Mets and for most of their history the Knicks. You chose that. Yeah. Why did you choose to join the Mets legion of awfulness?
I like to root for the underdog. Okay. I've always been a sucker for the underdog. So, I couldn't pick the Yankees and I couldn't pick the Giants. I just... So, so the...
I mean, no, it's not nice. It's horrible to be a Jets fan.
It's awful. I say to my dad every day, 'How did you get me involved in this?' It's like a miserable existence to be a Jets fan.
It's the worst. I mean, being a Mets fan isn't all that bad.
No, I mean, I love the Mets. I was there two nights ago, but I mean, it's really painful. There's many many years of heartbreak. And frankly, the Knicks, too.
The Knicks from 1999 until like two or three years ago were parentally the worst team in the NBA.
Yeah. Absolutely. And you know, like we have to go to San Francisco all the time. During a lot of that time, the Warriors were the best team. It was horrible. You show up in San Francisco, all your friends be, 'Let's go to a Warriors game.' Nah, no, no, thank you.
Yes. Some of those people who were outside of MSG rioting, you know, have become like famous. I know. Like one of those guys is in Marty Supreme now.
I saw that. Yeah. It's crazy. These guys...
I love that, by the way. Well, you know, Shalom is like a huge Knicks fan.
I know. I know. I know. I know. It's really cool. So I would like to show you something. Something we have never talked about.
And I'm a little nervous to get your reaction.
Do you remember the first time you and I met each other?
No. Okay. The first time you and I met each other was actually on Twitter.
Did we have like a moment on Twitter?
Yes. So, I had just launched my first startup, Anchor, and this was a social audio app at the time. It was not a podcasting platform. And we did this thing like a lot of startups did at the time where when you would post content, it would cross-post it to another platform, in this case, Twitter, right? And you didn't know because we didn't make the button big enough. And I told you I went down with auto-tweeting without telling me you're going to do that, Anchor, I have now spammed over 500,000 people, which sucks.
Yeah. Look, then you kept going.
Oh, I went after you. Holy crap. Um, that's helpful. You write back. That's helpful feedback. We're sorry it felt spammy to you.
Look at this. Default on. You kidding me? That is lame.
I'm sorry. I'm not down with auto-tweeting without telling me you're going to do that. And then someone wrote back, Fred Wilson, link broke. So I yeah I didn't know if you remember this and for me at the time I was a new founder. I was terrified. I was like oh my god I've never raised capital before. I just raised this tiny little seed round. I've upset like one of the most famous VCs out there. I actually cold emailed you right after this. And what did I do?
And you said you should change this. And we did. We changed it. And then I don't know if you remember this either. You talked about it on a podcast a few weeks later. Nabil had this podcast. I remember that. And Nabil's like, 'You got Anchor to change their UX.' Like, 'Nice job, Grit.' But I was like, 'Oh, man. I really screwed up.' So I don't know that that was...
No, look, I mean, but that was like a very popular kind of viral loop that companies were doing. I just didn't like that I was sucked into it.
I totally agree and you were right to call us out. Do you think if we had not done that, would you guys have led our series A?
I by the way, I didn't hold a grudge because I don't even remember.
I know. I know. I know. I'm just messing.
I mean, I do hold grudges sometimes, but not that time.
Okay, good. Good to know. I mean, yeah, now we're partners, so clearly the grudge didn't hold.
So, now we have that between us that we can always refer back to. That's right. Like, we could be in a pitch meeting with a founder and the founders like, you know, how do you behave with founders and I could say horribly, let me tell you the story.
No, I mean, it worked out. You gave me feedback, we changed it, and now look, we work together so it's all good. When we were on the walk a little bit, we were talking about New York. How do you go from never being in New York to being in New York to being again like the most famous VC in New York? Like talk us through the event journey, right? I mean I got here in '83 and I don't think that you know I got to that level until I don't know 2005 or 2010. So 20-some years, right? I mean, you know, the thing that's amazing about New York is that you get here, you figure it out, you get a couple lucky breaks and you kind of have a chance to kind of make your name for it. You make a name here.
How did you get into VC? I mean, you're a career-long VC.
It has to do with New York. So, what happened was I had just gotten out of MIT. I was an engineer as a software engineer. I moved to New York because my wife Joanne wanted to be here. There were no tech jobs in New York at the time. 1983, like yes, you could get a job writing code for, you know, Chase Manhattan Bank or something, right? But there were no cool tech jobs. And up in MIT, there were startups. You know, it was the PC era, Lotus 123. All my friends were going to work for these tech startups. And I land here. And I'm like, Joanne, like there's none of those jobs. And she's like, well, you know, then go figure it out. I realized that while there weren't tech companies in New York, there were investors in New York who invested in tech companies. And at the time, there was a lot of these wealthy families like the Rockefeller family and the Whitney family. So, I was like, 'Oh, okay. I get it.' Like, the tech companies are in Boston and Silicon Valley, but the money's in New York. And so, if I want to work in tech, maybe what I should do is I should work in the side of tech that's putting the money into the tech companies. I just sort of figured this out because you were in New York and you wanted to be in New York and that was the way to get into tech in New York. That was it. I didn't even know what a VC was. By doing a little bit of homework, I figured out what a VC was. And then I literally like knocked on the doors and they all were like, 'Do you have an MBA?' And I'm like, 'I don't know what an MBA is.' So I went and got an MBA and I talked my way into a summer job in VC.
Wow. And that was that. I can't even really picture what VC must have been like before the internet because there probably just wasn't that many startups, right?
Well, there weren't that many VC firms either, right? So, you know, I think there was kind of maybe the same ratio of VC firms to startups that there is now. There were just less startups and less VC firms. It was a much more collegial business. Like everyone was friendly, even competing firms and because almost every deal was syndicated and there were firms that tended to invest together so it was a little clicky and the Boston firms kind of did stuff together and the New York firms did stuff together and the Bay Area firms but there was probably 25 or 30 firms in the Bay Area and there was like five firms in New York and maybe 10 firms in Boston. It was a tiny industry.
But what are the companies that you're looking at there? Obviously...
Like one of our big successes was this company called Banyan. Now you don't remember Banyan because their competitor was Novell. Okay. And so these were the two companies that made software that you could put on PCs that would turn the PCs into a network. I mean you obviously had to connect but they needed a network operating system and so we had Banyan in our portfolio and they were competing with Novell. Novell beat Banyan but they didn't destroy them like Banyan was pretty successful company. Like we made I don't know 10 times our money on Banyan.
Wow. And 10 times like give us a sense of how big the funds were back then.
$3 million investment. 10 times your money return the fund.
And that's a big fund for that time.
I would say that was a medium fund for that time but not a small fund.
Okay and remind me what fund was this that you were that you...
The company was called Euclid Partners. And I worked on Euclid Partners 2, Euclid Partners 3, and Euclid Partners 4.
Right before then starting Flatiron.
Okay and Flatiron you start with Jerry.
Yeah the internet happened and you know the reality was that Euclid Partners was never able to raise larger and larger funds. And as a result, when the internet came along, it was really hard to do what I wanted to do, which was like make like 10 or 20 internet investments in a year. Because I had this sense like, oh my god, this is like a huge thing, right? We could go out and invest in the internet.
Yeah. And we had sold a company to SoftBank. And so a couple of my friends went to work for SoftBank and they introduced me to the SoftBank VC people and they offered to give us some money and Chase Manhattan Bank, their private equity group wanted to get an adventure. So they offered us some money and so we put the two together and created Flatiron Partners.
It was amazing. My whole career is a series of lucky breaks that then I followed up by like doing a good job with the lucky break. But there were a lot of lucky breaks and that was one of them.
So tell me about raising money for Flatiron.
We didn't really even raise the capital. We just cut two deals. We cut a deal with SoftBank and we cut a deal with Chase. Okay. And each of them allocated 75 million out of their much larger funds to invest with us. And we would go source the deals and then we would go to them and they would commit to the deals on a deal-by-deal basis. So if we committed $3 million, we go to each side say million and a half. Do you want to do the deal? And then we would do the deal.
Did they ever say no though? How do you operate like that?
They tried to say no a lot and we would talk them into it. Like I remember this guy Arie Chvkin at Chase. We were investing in this company StarMedia which was the Yahoo of Latin America. Okay. So we pitched the whole thing and he's like this is a website and I'm like yeah it's a website. He goes we're investing in a website? And I was like Arie it's like Yahoo or Google or Amazon. Like it's yeah it's a website but you know it's a business. And he goes I didn't realize we were going to invest in websites. I said Arie every single thing we're going to do is a website.
And did he approve every other website after that?
Now, I think everyone views you as being again like one of the most successful VCs ever. But I think while you were at Flatiron, that was the internet crash came, right? I mean...
We were successful and then we were not successful.
I mean, that must have been devastating, right? You're just getting things off the ground.
It was rough. I mean, it was great. We made quite a bit of money like during the boom before the crash. Yeah. Through early 2000, like we actually made a bunch of money. Like a third of our companies sold or went public and yeah, so we had had a lot of success, but the rest of our portfolio just like blew up on us and we ended up shutting down the firm. Chase and SoftBank both were kind of done with it. They didn't want to do it anymore and so we wound it down.
Wow. So that was just it. It was like let's just pull the plug.
Was that I mean, how did you feel about that? Was that...
I felt like shit, you know? I'm sure you've had this in your career, too. It probably was the best thing that ever happened to me because I learned a lot from it. And also I had to like pick yourself up. Yeah. Yeah. And you know when Brad and I got together to do Union Square Ventures, he also was in a firm that stopped in the middle of the internet crash. And so when we started Union Square Ventures, like we actually had a bunch of things that we sort of decided we weren't going to do again. And that really led to a lot of alignment around how we wanted to invest.
Yeah. Why don't we walk through the market and continue the conversation there?
So what are we looking at here?
So the last building that you can see on the right side of park, that is where Flatiron Partners was.
Yeah. And so we were there from like 96 to 2000. And then when we shut down Flatiron Partners, I and a friend took a small office up there on 20th and Broadway on the 14th floor. And that's where Brad and I started Union Square Ventures.
Amazing. And then you moved down a few floors.
Yeah. Okay. You got to move up.
You got to move up. Makes sense. All right.
So most of my venture capital career has happened right here as I was just saying like you know Flatiron was there, USV was there, USV is down there and now USV is there and so like Union Square really is kind of like the centerpiece and there used to be a breakfast spot right in this building. See where the Chase Manhattan Bank is? Coffee shop. The coffee shop of course. Okay. I would have breakfast in the coffee shop three or four times a week. Really? I would get there at 8:00 the minute it opened and I get the back table in the back. For a decade, I would do this. One day I walk in the coffee shop and there's a new person at the host stand and she says, 'I can't sit you there.' And I said, 'This is my table.' I said, 'It's my table.' And she said, 'Not only can I not sit you there, I can't sit you anywhere until your guest comes.' And I said, 'Wait, do you understand? I come here two to three times a week for 10 years. I come at 8 in the morning. I always sit there. I have my coffee while I wait.' She says, 'Not today.' I said, 'Okay, listen. If I get up and I leave, I'm never ever coming back. And I have had breakfast here two to three times a week for 10 years.' She says, 'Do what you need to do.' I walked out the door and I never went back.
Oh, man. So, you were actually unlike me. You were probably happy when they shut down. When Chase bought them out, I was devastated.
So, you know, I do hold grudges.
Okay. All right. Just not against me, fortunately. No, my memory of coffee shop I think I missed the tech breakfast at coffee shop. The tech breakfast I remember in New York was Maialino.
Yeah. So that's where I moved my business to.
Okay. So this was before that.
And Nick and Natalie who opened Leon's. Nick ran Maialino. So my whole idea was that Leon is the new Maialino. So coffee shop, Maialino, Leon's. There's a method to my madness.
My experience with coffee shop, I'm embarrassed to admit, was late, like in my early 20s, late night after partying in the city, you know, like 4:00 a.m. at coffee shop.
I was the guy who was coming in as they were still cleaning up from you.
Oh my god. Yeah. Oh my god. What era are we talking about the coffee shop? That was like probably that's early 2000s.
Okay. Okay. What did you as like an early VC in New York not just New York but kind of as the internet was coming on like what did you learn? What were you learning about how to invest?
It took me a long time to figure out like how to pick the right team. Like if you knew that, let's say you knew that podcasting was going to be a thing, right? How to pick you versus somebody else, right? I mean Ev Williams had a podcasting startup. He did. Yeah. Which Twitter came out of. Yeah. So, like, you know, but it wasn't really until you came along that somebody actually figured out how to make a business out of podcasting. I always was pretty good at getting to the idea, but like figuring out like who was the right team and when was the right time. Those are the two things I could never figure out.
I mean, I make that mistake I feel like to this day. I get fixated on an idea and I convince myself that the idea is inevitable and then it's just about finding a team working on that idea. It's a failure. It is inevitable, but it might be inevitable 10 years from now.
Right. Or with a different team.
Yeah. Right. Exactly.
So, what is your coffee routine in the morning?
Well, it has moved around a lot.
I told you the coffee shop story. So, it used to be that I would wait until breakfast time and I'd go and I'd get my coffee and I'd sit there and sip my coffee while I waited for whoever was meeting for breakfast. I did that at the coffee shop. I did that at Maialino. Used to do that at Leon's. But recently, I got this new machine in my house called a XBloom which does go to the office. Yeah. It's basically a pour-over robot. So, now it's good. I make a pour-over when I get up in the morning.
Sometime between 5 and 7.
So you're like a coffee right when you get out of bed?
I never was. And I become that in the last 6 months.
Is this before or after blogging? Are you still blogging every day? You're not blogging every day, right?
No, maybe twice or three times a month.
Now you obviously were famous for your daily blogging. AVC sounds like you're not doing it as much anymore. How did you get into the daily blogging routine? I think your wife was also blogging daily at the time, right?
Copied me. Okay. But I went to a party here in New York in 2003 put on by Nick Denton in his loft in Soho. Nick Denton was the Gawker guy, right? Yeah. This was in the earliest days of Gawker and he had Mena and Ben Trott who were the founders of something called Movable Type which was a WordPress competitor and they were in New York for some press event or something. And so we threw a little party at his loft and I went to it and I met Mena there. And she said, 'Do you blog?' And I said, 'No.' And she said, 'Well, you should.' And I said, 'How do I do that?' And she said, 'Well, we just came to New York to announce a hosted version of Movable Type called TypePad.com. Go home, log into TypePad.com, pick a name, and off you go.' I literally went home from the party. I went to TypePad.com and I said, 'I'll call it AVC for a venture capitalist, right?' And you got AVC.com. It was they had three users when I joined. I mean it was like there's nobody there right so and I started writing and I just found like immediately I found like I needed this I needed something to cause me to think out loud every day. That's how I always thought about it. Every single day in the venture business is amazing. You wake up the next day and you're thinking and maybe you slept on or whatever you're thinking about three or four things that you learned yesterday like I learned literally yesterday.
Right. Is writing for you a form of thinking? Is that like how you crystallize your thoughts?
Yes. That's what it is. It's taking all of these sort of thoughts that are running around in my head and putting down on a paper. And so that to me was incredibly helpful at helping me develop conviction around my ideas.
It's also a little bit of a social contract, right? If you put something out there into the world, depending on what it is, like kind of have to follow through.
Did you immediately jump into daily blogging right from that moment?
Yeah, I did actually. There was a time when I was writing three or four times a day. You know, I actually in 1996 I started watching Jim Cramer basically. He blogged. Well, he created a website called TheStreet.com. Okay. Yeah, of course. And he from his trading desk like as he was trading he would be like go long Google you know or like go short like and you know and people started reading it because like they were like oh if Jim's doing that I want to do that right this is before he became famous on TV and so I went down and I met with him and I said Jim I want to invest in this and we put the seed money into TheStreet.com I was really channeling Jim Cramer and he would write on TheStreet.com like five or 10 times a day. I was doing this. They were little short bursty things, more like tweeting than blogging. And then I was like, you know what? I'm going to do it once a day. So then I went to like writing three or four paragraphs once a day. And that became the thing that really worked for me. And I just locked into that and did it for 20 years.
And how did Twitter or X Now obviously how did that either supplement or augment because you were also very famous for...
Twitter kind of came out of South by Southwest like in 2006 I think. But if you remember the original Twitter you used an SMS short code. So you would send it a text to 40404. And I was like maybe everybody can't write three or four paragraphs every day but everybody can write like a text. Right. Right. So I was like, 'Oh, this is blogging for the masses.' That's what I saw in Twitter was blogging for the masses. That's what made me want to invest in Twitter.
But you also became a hardcore user as well.
So Twitter blogging, it was obviously a very sometimes multi-times daily behavior for you. Now you don't blog that often and you don't tweet at all, right? Are those two things related?
I do not think that it's a good thing for society that Mark Zuckerberg controls Facebook and Elon Musk controls Twitter. I don't think that like the most important media platforms of our lives are at least our generation's lives are controlled by a single human being. And so when Musk bought Twitter, I'm out.
I don't want to feed that beast.
So it like you quit in a form of protest.
Definitely. Just like the coffee shop. Just exactly like the coffee shop.
What if somebody else had bought it?
I wanted... I mean Jack Dorsey was CEO for a while. Yeah. But I knew Jack. Okay. Jack's a very complicated person. But I think he understood the enormity of what he controlled in a way that Musk does too, but Musk doesn't give a shit. And Jack really did. So that passing of the torch there was the end for me.
So let's jump to AI. Has anything in the world of AI replaced your daily behaviors with blogging and/or Twitter? Is there are you doing anything with it? Are you vibe coding? Are you building agents in a way that you were writing all the time?
So I always like to get my hands into the technology. It helps me invest in it better. Vibe coding didn't really click to me until I could start making agents.
Explain what you mean by that by making agents. It means a lot of different things.
Vibe coding, you know, was use Claude Code and build an app. Build an app. I just didn't feel like I had any apps I needed in my life. But then when OpenClaw came around and then Tasklet, which is a USV portfolio company, and then Claude Co-work, like when all of a sudden these platforms came around where you could actually make an agent, all of a sudden I had like five or 10 agents that I absolutely wanted to make. I would say I probably spend 10 hours a week working on these various agents that I'm making and that has gotten me in Claude Code. It's also got me accessing tons of APIs and understanding concepts around memory and skills and skills sharing skills between agents. It's definitely made me much sharper at looking at the kinds of things we're looking at.
And what are these agents doing for you? What are some examples?
So, we have a family office, okay, where my wife and I manage our family's money and stuff. So, I'm making a chief investment officer. This is in Tasklet. I started building in Tasklet, but I'm having to do some work directly in Claude Code. So my friend Ashvin wrote a book called The Aspirational Investor where he argues something that I've always believed about investing but I never heard anybody make this argument which is he said you have to invest in a way that is based on your goals, your needs, and your values. And so you start there and you'll end up with a different asset allocation and investment strategy than I would because we have slightly different needs and goals. And so the first book that I had my chief investment officer agent read was Ashvin's book.
Would you ever open it up to the world, put it on GitHub or something?
I don't think so. Well, maybe the skills, you know, I want to give the agent access to, you know, our family's books and records.
Yeah. Well, you wouldn't put that on, but you could create almost the template of it and put it on GitHub and say, 'Hey, world. Here's a chief investment officer agent.'
By the way, one of the things that this whole thing has gotten me thinking about is security.
Because like now I've created this agent that has access to all of our family's financial information. I'm going to have to lock that thing down for sure.
Have you heard and read about Claude Mythos?
Yes. I mean, it's come up in every board meeting this week.
Yeah. Are you terrified? Are you not worried? Is this just like doomerism? Is everything in the internet not safe now? Are all your family photos and text messages going to be leaked in the next year? Like, how are you thinking about this?
