Author: Fred Wilson

The Buy And Hold Mindset


This post is by Fred Wilson from AVC


When markets are in turmoil, like they have been for most of this year, I like to have a buy-and-hold mindset when it comes to making new investments. It is hard to know when you’ve reached the bottom and can start buying again, but if you think about a ten or twenty-year hold, then it becomes a bit easier.

The Gotham Gal and I buy and build a fair bit of real estate on the side and we generally use a “cap rate” of between 5 and 10 when we acquire and develop real estate. That means we want to generate an annual yield on our total investment (acquisition cost plus construction cost) of between 5% and 10%. If you think of those numbers as price/earnings ratios, then we are paying a PE of between 10 and 20 times earnings.

It is true that PEs and cap rates and most other “investment ratios” are impacted by current interest rates. When rates go up, like they have been for the last year, the value of capital assets goes down. That’s what we have been seeing this year, among other things.

But if you think about holding an asset over a very long time, like a building, then you will likely hold it through a number of different interest rate environments. And so what I like to think about is what a reasonable return is for a very long-term hold. And in real estate, that is between 5% and 10% per year (Read more...)

NFT Art CDMX


This post is by Fred Wilson from AVC


We spent this past weekend in Mexico City at Bright Moment’s NFT Art CDMX. Bright Moments is the premier NFT art “gallery” in the world. I use that term in parentheses because Bright Moments is much more than a gallery but that word is well understood. USV is a member of the Bright Moments DAO.

Over the course of the weekend, eleven leading NFT artists minted new generative artworks one by one in minting rooms where the collector and the artist saw the work revealed together.

Because there were eleven artists minting their work and also the 1000 mexican cryptocitizens (called Mexas) being minted all at the same time, there was a “live feed” of all of this minting activity in the center of the space.

Hanging out in the main space and witnessing all of the fantastic art coming to life for the first time in real time and in real life was an amazing experience. We did it for two nights this weekend.

I’ve written before about Bright Moments and the in-person experience of experiencing the creation (minting) of generative art. Too much of the NFT experience for my taste happens online and in isolation.

Art is best when it is experienced by a group of people and displayed in a large format where everyone can appreciate it and discuss it together. When you experience generative NFT art that way, it is an aha moment.

Finally, I want to thank the entire Bright Moments team for putting (Read more...)

Taking A Long Term View Of Web3


This post is by Fred Wilson from AVC


This post was co-written by Katie Haun and Fred Wilson

The events surrounding FTX have shaken the confidence of many. How did one of the largest crypto exchanges collapse so quickly? Why do meltdowns like this seem to keep happening?

At times like this, it helps to have a long-term view of web3 as a sector, not just a forward-looking long-term view, but also some perspective on where we have come from.

As longtime investors in web3 and board members (also individual shareholders) of Coinbase, one of the oldest and best-known companies in the space, we thought we might share some thoughts.

Web3 is a software-driven innovation that has a built-in financial system. This has been both a strength and a weakness. On the one hand, tokens enable developers and users to contribute to open-source protocols and participate in the economic upside of doing so, leading to strong developer communities. That’s been a positive relative to how software has been developed, monetized, and governed in the past. On the other hand, tokens lend themselves to boom/bust cycles and a sense by many that web3 is simply a speculative endeavor with no real substance behind it. 

This perception is only reinforced by the companies and individuals who started web3 companies and projects with the exclusive intent of making a lot of money very quickly through leveraged trading and speculation, pumping and dumping, and, sometimes, outright fraud.

Most of the well-known meltdowns in web3, going all the way back to Mt Gox (Read more...)

Helping More Ukrainian Families and Children


This post is by Fred Wilson from AVC


I’ve previously written about The $1k Project for Ukraine, which was launched by my friend, Alex Iskold, five days into the Russian aggression. 

Since its inception, the project raised more than $10M and helped 10,000 families and 35,000 children. The AVC community has generously participated.

Last week, Russia announced its withdrawal from Kherson and The $1k Project crew is racing to help the next 1,000 families specifically focusing on the liberated territories. 

This coming winter is going to be absolutely brutal in Ukraine because of the energy crisis.

The Gotham Gal and I have previously made a donation to the project and we received this thank you page from the families we supported.

This past weekend we made another donation to support these families in the newly liberated territories.

If you are able to give and support a family please do so here.



USV TEAM POSTS:

Two Weeks In Paris


This post is by Fred Wilson from AVC


The Gotham Gal and I just spent the last two weeks in Paris. We have been going to Paris together for around forty years and have had a place there for the last decade. It is a place we can go to get away from it all for a few weeks, connect with each other, and enjoy ourselves in a city we love.

I’ve thought a lot about why Paris works so well for us to dial it down a bit and focus more on each other for a while. The time zone is a big part of it. The US doesn’t wake up and start working until early afternoon in Paris so our mornings and lunchtime are all our own. We sleep way later than we sleep anywhere else and stay up later too. The coffee shops I like don’t open until 9am or later so that’s an added incentive to stay in bed a bit longer.

We do find time to work when we are in Paris, but it is generally from mid/late afternoon until dinner time. So the time we work goes down considerably but not to zero and the time together goes up a lot.

Add to that our love of walking through cities and neighborhoods. We do a ton of that in NYC and will walk to and from dinner most of the time in NYC. But walking in Paris is next-level walking. The avenues are wider, the buildings are lower, the light is better, (Read more...)

Creator Royalties


This post is by Fred Wilson from AVC


One of my favorite things about NFTs is that they contain a mechanism for the artist/creator to collect royalties on all of the sales that happen after the initial sale/mint. The creator specifies the royalty percentage when they initially mint the NFT and the NFT marketplaces/smart contracts collect the royalties on future sales and pay them to the creator.

Some forms of creativity have had ongoing economic participation by the creator for many years. In the music industry, there are publishing rights and recorded music rights that are paid to the creator and/or the creator’s financial partners (ie record labels and publishing houses). In the television industry, there are syndication rights. Many of the most successful musicians and television talent have made significant sums of money on these rights.

But for many forms of creativity, the ability to participate in the future value of the work has been absent.

So when I saw the NFT standard emerge, I was really excited about the potential for artists to participate as the value of their work escalates over time.

However, there are clouds on the horizon right now. Some NFT marketplaces have chosen not to enforce NFT creator royalties. There are some valid reasons for this and some not-so-valid reasons.

One valid reason is that “market makers” need very low transaction fees to provide liquidity to a market. A market maker is a participant that trades assets and does not hold them for long-term appreciation. They make money on the spread between (Read more...)

Direct Air Carbon Capture


This post is by Fred Wilson from AVC


There are many efforts underway to reduce carbon emissions in order to get to “net zero”. But most climate scientists believe that reducing emissions won’t be enough and we will also need to engage in removing carbon from the atmosphere.

There are natural ways to do this like reforestation, soil carbon, biochar, etc but there are also “engineered” approaches to removing carbon from the atmosphere.

One of the most promising of the engineered approaches to removing carbon from the atmosphere is direct air carbon capture (DAC).

In DAC, air is run through a device which captures C02 and air is returned from the device with less CO2. The captured CO2 is then sequestered underground or used for fuel or something else.

DAC facilities exist and are removing carbon from the atmosphere but the total carbon removal rate from DAC is currently only around 100,000 tons of CO2. It is estimated that by 2030, DAC facilities around the world will be removing 1.5bn tons of CO2. And that number will grow in the decades to come as our planet works to get to net zero and beyond in this century.

I remember hearing that “we’ve spend hundreds of years taking carbon out of the ground and putting it into our atmosphere and we are going to spend hundreds of years taking carbon out of the atmosphere and putting it back into the ground”. I believe DAC will be a big part of how we do that.



USV TEAM POSTS:

Mona Alsubaei (Read more...)

NFT Screens


This post is by Fred Wilson from AVC


I have enjoyed collecting NFT art over the last few years and I have very much wanted to display it in a physical space vs just having it online on a profile, like this one.

So when we started designing the new USV offices last year we started thinking about NFT screens. We were inspired by these amazing NFT screens in the Bright Moments NFT Gallery in Venice Beach California.

So we bought six large displays for the new USV office, three portrait orientation like the photo above and three landscape orientation and hung them around the new USV office. Here are a few photos I’ve taken of the USV NFT screens over the last few months:

Here is how we manage the screens:

We bought Yodecks, one for each screen. A Yodeck is a raspberry pi-based inexpensive device made for the digital signage market but works great as an NFT player.

There is a web app to manage the Yodecks and you can put all kinds of media onto the device. We chose to make a simple web app that runs a playlist of NFTs on each screen and shows the artist, title, and owner on the bottom left and a QR code to view/buy/etc the NFT on the bottom right.

We curate NFTs into a Google Sheet, we use a script to construct a web page playlist from that curated list, and the Yodeck runs the playlist.

It is really simple and works great.

I recommend (Read more...)

Vaccines


This post is by Fred Wilson from AVC


I’ve always been a fan of preventive medicine. I like the idea of medicine that stops us from getting sick.

As a child, I was vaccinated for all of the normal things, polio, whooping cough, etc in order to be able to go to school.

Growing up I was vaccinated for tetanus and a few other things.

As an adult, I have gotten a flu vaccine every year for almost forty years. And as a result, I have avoided the flu almost every season.

Last Friday, I biked over to CVS and got my annual flu shot and the new bivalent Covid vaccine.

That Covid shot is my sixth. I started with a J&J in March 2021 when I was skiing in Utah. I got the Pfizer double shot in the summer of 2021, I got a Moderna booster in Jan 2022 a few weeks after I got a mild case of Covid. I got another Moderna booster this past summer, and on Friday I got the new bivalent Moderna vaccine.

I think it is safe to say that I am a believer in vaccine technology and I avail myself of it when it is recommended. I got the double shingles shot a few years ago on my doctor’s recommendation. I had shingles once, in my early 30s, and hope I never get it again. It is painful.

I know that many people don’t trust vaccines. They believe they cause bad side effects. Or they believe they don’t work. Or (Read more...)

Is It A Computer Or A Car?


This post is by Fred Wilson from AVC


In the spring of 2014, I walked across the street from our apartment building to our parking garage to get our car and drive somewhere. I can’t recall where I was headed that morning. But as I walked into the garage, I saw two EV charging kiosks had been installed in our parking garage. I turned around and ran back to our apartment building, went back upstairs to our apartment, and told The Gotham Gal that we were getting a Tesla. I had long wanted an EV but the “how do we charge it in the city” problem had been the blocker. Now that was solved.

Maybe a month later, the Tesla arrived and I drove it into the parking garage to show the garage attendant how to drive and charge the car. He sat behind the wheel while I described the features of the car and when I was done he said to me “Mr. Wilson, they have combined an iPhone with a car!

I love that story because never a truer word has been spoken.

I was thinking about that when I was recently describing how my new Rivian Truck handles off-road driving. It isn’t four-wheel drive, it isn’t all-wheel drive, it is any-wheel drive. There are four electric motors, one on each wheel, and depending on how the truck is performing, different amounts of power are delivered to each and every wheel. The software determines which wheels need what power and supplies it to that (Read more...)