Opportunity

With yesterday’s announcement that early-stage VC Greycroft has raised a $200 million growth fund , this type of fund has officially become a trend. But before we dig into the dynamics of it, let’s pay homage to the originator of this concept, Union Square Ventures. In January 2011, USV raised what I believe was the first “opportunity fund.” Prior to this, plenty of VC firms invested across the early stage to late stage spectrum from the same fund (e.g. Battery, General Catalyst, Sequoia, Greylock, Bessemer). Others had separate early stage funds and late stage funds, often with separate teams and economics (e.g. Redpoint, DFJ, North Bridge) typically aimed at different opportunities. But the USV Opportunity Fund was the first time, at least in the post 2001-Internet bubble cycle (or last decade, if you want to put it that way) where an early stage firm created a separate fund to invest in late stage rounds of their existing early-stage portfolio companies. In USV’s case, Fred Wilson explains the strategy extremely clearly in the post The Opportunity Fund . ...

I heard a fascinating one-liner the other day that I had knee jerk negative reaction to but when I thought about it more thought was deeply insightful, especially in the context of big established companies vs. new entrepreneurial companies. A CEO of a very large, successful company said “execution is an order of magnitude easier than opportunity.” In the context of young startups, I often feel exactly the opposite. Opportunity is everywhere, but execution in a bitch. ...