Book: Brotopia: Breaking Up the Boys’ Club of Silicon Valley

I read Emily Chang’s book Brotopia: Breaking Up the Boys’ Club of Silicon Valley the day it came out. Yes – I stayed up until after midnight (way past my bedtime) reading it.

It’s powerful. I bought a bunch of copies for different people and I recommend every investor and entrepreneur in the US read it. While there are a handful of salacious stories (some of which were covered in excerpts that were pre-released), the overall arc of the book is extremely strong, well written, and deeply researched. Given Emily’s experience as a journalist, it’s no surprise, but she did a great job of knitting together a number of different themes, in depth, to make her points. She also uses the book to make clear suggestions about what to do to improve things, although she holds off from being preachy, which is also nice.

Interestingly, I’ve heard criticism, including some that I’d categorize as aggressive, from several men I know. There doesn’t seem to be a clear pattern in the criticism, although some of it seems to be a reaction to several of the specific stories. In one case, I’d categorize the criticism as an effort to debate morality. In another, I heard an emotional reaction to what was categorized as an ad-hominem attack on a friend of the person. But I haven’t been able to coherently synthesize the criticism, and interestingly I’ve only heard it from men.

As I’ve been marching slowly through historic feminist literature recommended by Amy, I realized that I had read three contemporary books in the last few months that materially added to this list. In addition to Emily’s book Brotopia, I read Sarah Lacy’s book A Uterus Is a Feature, Not a Bug: The Working Woman’s Guide to Overthrowing the Patriarchy and Ellen Pao’s book Reset: My Fight for Inclusion and Lasting Change.

While Sarah and Ellen’s books are written from deep, personal experiences, I thought all three books were important, very readable, and bravely written.

AMA for the Techstars Sustainability Accelerator

“Technologies that have revolutionized so many sectors of the economy have the potential to transform the way we do conservation. We’re at the front end of a new ‘nature-tech’ revolution and nature stands to win big from it.”

  • Brian McPeek, Chief Conservation Officer of The Nature Conservancy

As many of you know, Techstars and The Nature Conservancy have teamed up to build a tech accelerator for the planet – Techstars Sustainability. The accelerator kicks off this July in Denver and companies from across the globe are applying now through April 8th. Considering how much Amy and I love both of these organizations, we’re excited to be supporting this effort to build stronger startup ecosystem at the intersection of sustainability, nature and technology.

From the state of coral reefs to deforestation, I’ll admit that it’s easy to feel overwhelmed and the work ahead is certainly not something to take lightly. But, I’m also choosing to pursue a personal path that is rooted in urgency and action. I’m inspired by entrepreneurs like Grant Canary and his team at DroneSeed (a Techstars Seattle 2016 alumni). Grant is working to innovate the future of forestry through planting trees with swarms of drones. And then there is Liané Thompson, CEO of Aquaii, who is also utilizing drone technology to build robotic fish that gather underwater data in a way that was previously unachievable.

And that’s just drones and big data. Imagine all of the enabling technologies that can be applied to build powerful solutions in soil health, aquaculture, fisheries, water markets, climate resilience, and more. I think my friend Brian is right, we are on the forefront of a nature-tech revolution – and I want to be a part of it.

If you are interested in continuing this conversation with Brian and I, join us for a live online discussion and AMA on Monday, March 26th at 4:30pm MST. We’ll be talking about the origins of this partnership, the intersection of nature and technology and the upcoming accelerator. You can grab your seat by signing up here.

For more on how The Nature Conservancy is thinking about this, enjoy this short video.

ICO Advertising On Google

Google just banned ICO and cryptocurrency-related advertising. For the official policy, see Financial Services: New restricted financial products policy (June 2018).

Oh – and happy Pi Day. And MIT Admission Notification Day. And Einstein’s birthday. And Amy’s half birthday. And the day that Stephen Hawking transitioned to the next quantum energy level.

I never understood why ICO advertising has been allowed. I’ve heard the phrase “wild west” applied to ICOs for the past few years and it’s clear the regulatory regimes are finally hustling to catch up with the phenomenon. Up to this point, the phrase “consumer protection” hasn’t really been in my head around ICOs, but it is today.

When I was in college and my early 20s, I read Forbes Magazine religiously. Dave Jilk turned me on to it when I was a freshman (he was a senior) and from 1983 to 1995 I read almost every issue cover to cover. The pink sheet and penny stock phenomenon crested in the 1980s with intricate pump and dump schemes, boiler rooms, and an entire layer of the investment banking industry that promoted worthless public companies. Forbes covered this extensively and by the time firms collapsed and people went to jail I had a healthy skepticism about broad-based advertising and promotion scheme around any financial instrument.

When I first heard the phrase “ICO” three or four years ago, my immediate thought was something like “that’s just an invitation to the SEC to regulate that. Why do a play off the acronym IPO – call them something innocuous like “Papayas” instead. Knowing the SEC would move very slowly, I didn’t pay much attention. Last year, the SEC finally started putting out some vague statements that are now starting to get crisper and more precise.

From where I sit, it seems like similar rules to selling private equity should apply to ICOs. In addition, there are some rules associated with selling public equity that should apply. In both cases, the idea of advertising an ICO is ludicrous to me.

When a company we are investors in is raising a new round of financing, I’m not allowed to even write a blog post about the financing, let alone run an advertisement about it. Tweeting isn’t allowed. Neither is giving a speech in a public forum. Promoting it on Youtube would bring down the wrath of Jason Mendelson on my head.

Now that we are a “registered investment advisor” (since we also invest in other venture funds), we have an entire compliance infrastructure that I have to go through to even get blog posts approved (like the one about Glowforge yesterday) when I simply mention a company of ours on the web. While I can argue that the regulations around what I can write and/or promote are over-reaching, they are the rules that I, and our companies, have to live with.

The idea that a company can do an ICO, raise money, and ignore this set of rules makes no sense to me. I can imagine a category (currently being called “utility tokens”) that look more like frequent flyer miles or tokens at a video arcade than equity, but the boundaries around this are very blurry to me right now.

Anyone that is paying attention to cryptocurrencies and ICOs knows that there is a huge amount of fraud going on. A Google search on ICO Pump and Dump turns up a bunch of current stuff that is fascinating to read. Telegram, which is home to a huge ICO that is ongoing, is a popular platform for organizing ICO pump and dump schemes. If you think this kind of action is healthy long term, just go watch The Big Short.

I learned the phrase “buyer beware” in my early 20s while reading all those Forbes Magazines. Today, we have John Oliver to help us out.


Glowforge is Shipping #whatmadethis

Regardless of those childhood aspirations of Batcaves and Tony Stark’s high tech compounds, not every VC has an office (or a company portfolio) full of lasers. But I’m one of the lucky ones.

A little history: Foundy made our first investment in Glowforge, the Seattle-based 3D laser printer, back in June of 2015 after seeing the incredible product the team was building. A few months later, they launched with the biggest 30-day crowdfunding campaign in history, during which I spent more time than I’d like to admit refreshing their homepage and watching the numbers climb in astonishment. And before I knew it, we were leading a second investment round to help the team deliver to tens of thousands of customers.

As with many early stage hardware companies, Glowforge faced their fair share of setbacks during beta and pre-production, but the team’s obsession with delivering the product they promised has paid off. The product is completely magical. Finally, customers have it. And you can make incredible things with it, like a drone.

They’ve been shipping out thousands of units, and as of today, all US customers who’ve ordered a Pro have been notified theirs is ready. Since domestic units can’t be shipped overseas, and Basic units are still backordered, that means they have Pro units available for sale today, for delivery in 10 days!

Do you need new keys for your laptop?

One of the things I’ve always loved about Glowforge is that they are constantly trying to figure out how they can work with their customers, instead of just selling to their customers. It’s one of the reasons their forum is so active and such a terrific resource, and why their customers love the product so much. So I wasn’t surprised when they came to me and told me that they were going to launch Pro sales exclusively to their customers, with a really amazing offer. I get to share it with you since I’m a customer!

Click here to get a Glowforge Pro for $1,500 off the current listed price.

Finally, a Glowforge Pro without the wait! It’ll be on your doorstep within 10 days. (As a customer, I get $500 cash or $600 in materials if you buy – and yes, I’ll be taking the materials …)

One more thing. When I show people stuff I made on my Glowforge, I get one question: What made this? Glowforge is encouraging owners to share their own prints with #whatmadethis. Notice the Foundry and the Glowforge logos on my new wallet.

Proofgrade leather, stamped with engraved acrylic – made on a Glowforge. Get your own 3D Laser Printer at Glowforge, delivered in 10 days, for $1,500 off! #whatmadethis

You won’t believe what people are making. Check it out for yourself!

#whatmadethis on Facebook

#whatmadethis on Instagram

#whatmadethis on Twitter

Our Sexual Harassment Policy

Last summer, when we made a statement about Our Zero Tolerance Policy On Sexual Harassment, a number of people asked us to publicly release our formal policy. We wanted to take our time and make sure we covered as many different elements of the issue as we could. We’ve done that, and as part of #MovingForward we’ve made the Foundry Group Sexual Harassment Policy public.

Among other things, we’ve tried to address the issue of non-disparagement clauses. We’ve come to the conclusion that they should be excluded from agreements, and are encouraging our portfolio companies and the funds we invest in to do so as well. Following is the specific section about non-disparagement clauses from our Sexual Harassment Policy.

NON-DISPARAGEMENT CLAUSES. With respect to all agreements between the Company and any employee or contractor, the Company will exclude reports of sexual harassment or assault from any non-disparagement clause. In addition, the Company will encourage portfolio companies and funds to adopt a similar practice.

Please view this policy as open source. Feel free to download it and modify it for your own purposes. If you have any suggestions or feedback on ways to improve it, please email me.

Recognize that this is not legal advice from us, but merely a starting point for anything you’d like to incorporate into your policy.

International Women’s Day #StartWithEight #MovingForward

Today is International Women’s Day (“IWD”) which dates back to 1909, although the UN did not start celebrating IWD annually until March 8, 1975.

With the current global movement for women’s rights and equality, IWD 2018 has spawned numerous initiatives including #PressForProgress and #TimeIsNow. While the hashtags vary, the common theme of 2018 is action. For many organizations, the goal is for these initiatives to launch on March 8th but continue throughout the year and beyond. At a minimum, IWD and the organizations and individuals celebrating it will spark action, continue existing conversations, and force new ones.

At Foundry Group, as part of our efforts to help build a more inclusive tech industry, we’ve joined two initiatives as part of IWD 2018: #StartWithEight and Project #MovingForward.

#StartWithEight addresses the gender disparity in venture capital funding by asking participants to commit to taking eight meetings with women from outside their existing networks during the month of March. The idea there is that “the dynamics will change when capital flows equally to any talented founder, no matter his or her gender, race, sexual orientation, or any other characteristic.” For many VCs, deal flow is extremely network driven and often our networks look a lot like us. At Foundry Group, we’ll do at least eight new meetings with women looking for funding who we’ve never met with before in the month of March.

Project #MovingForward is building an open-source directory that pools diversity, inclusion, and anti-harassment commitments from VCs. We (along with 35 other VC firms) shared information (now public on the site) on how we’re #MovingForward. At Foundry Group, in addition to adopting new policies, we’ve created a portal for internal and external stakeholders to report sexual harassment.

There’s a ton of work to be done to achieve gender equality and inclusivity in tech, but these action-oriented initiatives are a good start. I hope the momentum continues to build and we start to see some real change. K9’s Project #MovingForward submission really sums it up: “Actions speak louder than words.”

VC Offsites – Our Approach

I regularly get asked by other VCs about how we do our offsites.

When we started Foundry Group in 2006, we had a very deliberate quarterly process in an effort to learn all about each other and become highly effective at working together. For the first three years, we were disciplined about the timing and process, used an outside facilitator, and always spent one night away together as a group. This was intense and rocky for the first few years, as we had to work through a lot of stuff as individuals and as a team, even though we had all been working together since the early 2000s at our prior firm.

Around 2010, as we started to feel like we had hit our stride working together as a team, we shifted from a facilitator driven model but maintained our quarterly rhythm. Recently, after adding Lindel, Moody, and Jamey to the team, we’ve shifted back to a facilitator driven model in an acknowledgment of the value of really learning each other and now becoming a highly effective team of seven, instead of four.

I think a regular offsite rhythm is critical for every VC firm of any size (including solo GPs, where the offsite can include either the whole team or a few of your key LPs and advisors.) While I’m sure there are different approaches that can work, when I reflect on almost a dozen years of our offsites, I think the approach, combined with the simplicity, has served us extremely well.

So, in case it’s useful, following is our approach to offsites.

Facilitator: For stretches of time, especially early on in our working relationships, or during any rough patches, we’ve used an outside facilitator. If you want a referral to anyone, just email me.

Close to HomeWe try to avoid the offsite becoming a boondoggle. We keep it close to home and relatively modest. Many of them are either at Jason’s house, my house, or a hotel in Denver. Occasionally we’ll go to a resort in Colorado Springs (a two hour drive). Once every few years we’ll combine it with a trip somewhere (New York, Chicago) just to change the atmosphere a little, but even then, other than a fancy dinner somewhere, it’s on the modest side. But we never do offsites at the office (I mean, it’s an offsite after all.)

At least a full day: We start first thing in the morning and finish with dinner. We often spend the night together (for many years Seth, Ryan, and I had assigned bedrooms in Jason’s house.) We schedule a second day – if we end early, we have time to catch up on things, including stuff that came out of our discussion.

Rotating leadership: When there were four of us, each of us led the offsite once a year. During the stretch we are in through the end of 2018, which is using a facilitator to help us wire up the next level team of the seven of us, I’ve been the leader so there is some consistency of approach. The leader is a lightweight leader, just making sure the offsite happens with an agenda, as you’ll see in a second.

Crowdsourced agenda around two topics: Like many things in our world, we develop the agenda collaboratively and continuously. A month before the offsite, the leader shares a Google Doc with logistics and a skeleton agenda. We then fill it out, rarely exceeding a page. There are two primary segments: (1) our portfolio and (2) our relationship. By using these as the driver, we can go deep on a number of different issues, including our overall strategy. We try to keep the agenda high level and have a section called “Other Things to Discuss” which allows us to put up anything tactical on anyone’s mind. The leader curates the agenda and we finalize it the week before the offsite.

Portfolio: We have lots of different approaches to this, but it’s essentially a deep dive on a portion of the portfolio. The leader chooses the approach, which is often a brand new one, so we don’t get into stale rhythms. My historical favorite is the use of index cards with company logos on them. The leader shuffles the cards (our entire active portfolio, which is now a lot of cards) and turns them over one at a time. Whoever is on the board is not allowed to speak – they have to listen as the other partners reviews the portfolio company. Once the non-board member partners have talked about what they think is going on at the company and what we need to focus on, the board member gets to weigh in. Since our model is that everyone works on everything together, this is an incredibly insightful approach at two levels: (1) the company info and (2) our level of internal communication about the company. It also reinforces the value of being vulnerable to your partners – it’s often really hard to sit quietly and listen to the details without jumping in and trying to steer the conversation or inject your point of view into the mix. A more recent approach that I loved (that Seth came up with) is to start with a portfolio value assessment by company. We put an X-Y graph up on the wall with the Y-axis being amount of work (high to low) and the X-axis being the value to the fund of our ownership in the particular company ranging from $0 to $225m (where a company returned the fund.) We each put the index card for the company we were responsible for up on the wall in the place we think it belongs. We then discussed the entire portfolio for each fund, which generates a lot of discussion and calibration (including moving a lot of index cards around, since if we did the exercise blind, we’d all have different views.)

Ourselves: We either address the question “How Are You Doing?” (which is personal and professional, internal or with regard to others in the partnership) or do a set of facilitated exercises. We often start with a Red/Yellow/Green check-in. We orient the discussion around each person and take our time, rather than rush through updates. If there are conflicts between people, they surface quickly since we are all tuned to talk about struggles we are having, rather than focus on the awesomeness of how great our universe is. Each of us approaches this with our soul wide open – the starting point is trust, vulnerability, authenticity, and other words like that. While “How Are You Doing?” is a simple question, it opens the door wide for a variety of things, and the conversations that have ensued around one person have often generated a richness of discussion that lasts hours and often involves tears and other surprising emotions.

Obvious but important meeting rulesNo phone. No email. If you have to go to the bathroom, go. We always make sure there are snacks in the room. Don’t interrupt. Listen with both ears; talk with one mouth. We build 30-minute breaks into the agenda so we can catch up, and, more importantly, breathe and stretch during the day. There’s usually a chance to exercise before dinner.

Dinner is a critical part of things: On some occasions, we have a meaty topic to discuss that we save for dinner. On others, we use it to heal our relationships and remind ourselves that even though we have plenty of conflicts and struggles, we are best friends. We usually do this in a private room somewhere so we can take the conversation wherever we want to go.

We try not to rush. We are gentle with each other, reminding ourselves that a key value of Foundry Group is brutal honesty delivered kindlyAnd we always remember that one’s individual truth may not be “the truth” and it’s important to be willing and able to explore what happened, or is happening, in a particular situation, instead of simply what you think happened.

Finally, we are always trying new things, so if you have stuff you do in offsites that are different, or additive, to our approach, toss them up in the comments.

Hyperbolic Headlines About Silicon Valley

The hyperbolic headlines are once again accompanying the articles about Silicon Valley. A Sunday NY Times article titled Silicon Valley Is Over, Says Silicon Valley kicks off what I expect is another wave of this. It references a recent Wired article titled Everyone Hates Silicon Valley, Except Its Imitators,

Go read them all and then tune back in here. I’ll wait.

Buried deep within the NYT article is an admission. “Complaints about Silicon Valley insularity are as old as the Valley itself” followed by an anecdote about Jim Clark moving to Florida during the dotcom era. Blink twice if you don’t know who Jim Clark is; blink once if you downloaded Netscape from an FTP site somewhere when it was still called Mosiac. And, blink three times if you realize that Netscape is now owned by Oath, which is a subsidiary of Verizon, which is headquartered in New York, and is the merger of Bell Atlantic (Philadelphia), NYNEX (New York), and GTE (which, awesomely, bought BBN, created GTE Internetworking, spun it off as Genuity after the Bell Atlantic merger, which was then acquired out of bankruptcy by Level 3 (Broomfield, Colorado – adjacent to Boulder) which is now owned by CenturyLink (Louisiana)). Blink four times if you are still here and followed all of that. Kind of entertaining that Netscape led us to Monroe, Louisiana.

Now, go read Ian Hathaway’s post titled Silicon Valley is Not Over. He nails it.

Dan Primack waded in with a tweet.

It’s worth clicking through and reading the comment thread. It’s delightful.

Silicon Valley is not over. Over 100 years since its notional inception, it’s a fascinating and amazing ecosystem. But it’s also not the only place you can create technology companies. I’m sitting in a hotel in New York and, according to a recent article from Bloomberg, New York Will Never Be Silicon Valley. And It’s Good With That.

The real story is that you can create startups, and thriving startup communities anywhere. Imagine the NYT article was titled “In a Moment of Introspection, Silicon Valley VCs Realize That There Are Tech Startups Outside of Silicon Valley.” Nah – that wouldn’t get as many clicks.

Hotshot Advice on Raising Venture Capital

Raising money is hard.

Entrepreneurs need to understand what’s involved – from what to consider when picking the right venture partner and how to think about the economic and control rights at stake, to what life will be like after the deal closes. This assumes that the company is ready to raise venture money in the first place – an important consideration that not enough entrepreneurs really stop to consider.

At Foundry Group, we believe in a level playing field when it comes to knowledge. We want entrepreneurs to understand all the issues and to make the most informed decisions they can. That not only benefits them, but it benefits us as their partners and investors. That was one of the motivations for Jason and I to write Venture Deals. It’s also why Jason co-teaches the venture capital course at CU Boulder.

We believe that access to information is a good thing.

So when the founders of Hotshot, a startup that provides digital learning for lawyers, asked if they could come to Boulder and interview Jason and me for a video on raising venture capital, we happily obliged.

The video they created is called “Advice on Raising Venture Capital.” Anyone can access it for free, and we encourage you to check it out. While Hotshot’s content is aimed at lawyers and law students, this course is for entrepreneurs. In it, Jason and I discuss the different things that founders should consider when raising venture money for the first time.

We don’t have a stake in Hotshot – we just like what they’re up to and wanted to share the content.

Roger Bannister’s Sub-Four-Minute Mile

If you are a runner, then I expect Sir Roger Bannister is one of your heroic figures (as he is one of mine.) He died today at 88.

Enjoy his narration of the video of him running the first sub-four-minute mile. It’s delightful.

I love his number (41) – a prime, and somehow signaling something about the first sub-four-minute mile, along with Chataway’s 42 (the meaning of life, the universe, and everything.)