Growth5 Blog

Friday, April 17, 2009

Fred Wilson Talks Venture Capital, Media & More

"A VC" by Fred Wilson of Union Square Ventures is one of my favorite blogs. He covers interesting topics both inside and outside the vc space. You can tell Fred is a super bright guy who still does his homework (in addition to relying on his experience), which I appreciate.

Recently, Fred spoke to a group of NYU & Columbia students at InSite. The hour plus talk/Q&A is here in 9 parts on YouTube - if you are in the vc space or are an aspiring entrepreneur, I recommend you check it out.

Some highlights:

1. Early in Wilson's career, his boss told him there were 3 terms that must be attained in every venture deal:
a) liquidation preference
b) preemptive rights: the right to participate pro-rata in future rounds &
c) the right to a board seat
2. "I don't think that the amount of time that you invest in a specific portfolio company has a lot of correlation to the return that you get. I think the quality of the management team and the quality of the market opportunity has a lot to do with the return that you get."

3. "The most important skill set in the vc space is networking. The most successful vc's are the ones that are hyper-connected."

4. "I look at early stage vc investments as 'options' not securities. A third of investments in early stage are worthless, a third we'll get our money back, a third will have some value."

5. Part 6 of 9 (below) includes an informative discussion of Paid Media vs. Earned Media.

Paid Media - defined as the "traditional" current $500 billion worldwide industry: media fees, creative, media buys, etc...


Earned Media - defined as media that you earn but don't have to buy: PR, word-of-mouth marketing, social media, etc...

Check out Wilson's deck for the Ad Age presentation on Earned Media here.

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