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Reporting1


At USV, we report to our investors on our portfolio and performance four times a year, once a quarter. We produce an audited report once a year, with our Q4 results. We do that in writing and we also do a quarterly call for our investors three times a year (we combine our Q4 and Q1 calls since our annual audit process slows down our Q4 reporting). In our annual and Q2 written reports, we prepare a short update on every one of our portfolio companies. We call these “one-pagers.” This can be a fair bit of work but we do it regularly and have been doing it since we started USV. I think it is a great discipline for investors to take the time on a regular basis to sit down and write and speak to their investors about what is going on in their portfolio and in the macro environment. It is a time-honored tradition that fund managers write a letter to their investors explaining what they are seeing and doing. Warren Buffet’s letters are a particularly great example of that. But there are many fund managers who are excellent writers and whose letters get passed around and read by many in the investment community. Everyone here at AVC knows that I think writing and investing fit like a hand and glove and writing and thinking out loud can make you a better investor. The Gotham Gal and I are investors in a number of venture capital funds and I have noticed a trend among venture fund managers to reduce the amount of writing and verbal communication they do with their investors. I understand that it can be time-consuming and that many fund investors don’t even bother to read the reports. But I would urge my peers to resist that urge and to take time to regularly sit down and write about what is going on in your portfolio companies and the markets you invest in. I think it provides insights, raises issues, and gets the entire investment team talking about things in a way that few other regular processes do. Plus I really enjoy doing it. https://avc.com/2018/08/reporting/

Reporting1


At USV, we report to our investors on our portfolio and performance four times a year, once a quarter. We produce an audited report once a year, with our Q4 results. We do that in writing and we also do a quarterly call for our investors three times a year (we combine our Q4 and Q1 calls since our annual audit process slows down our Q4 reporting). In our annual and Q2 written reports, we prepare a short update on every one of our portfolio companies. We call these “one-pagers.” This can be a fair bit of work but we do it regularly and have been doing it since we started USV. I think it is a great discipline for investors to take the time on a regular basis to sit down and write and speak to their investors about what is going on in their portfolio and in the macro environment. It is a time-honored tradition that fund managers write a letter to their investors explaining what they are seeing and doing. Warren Buffet’s letters are a particularly great example of that. But there are many fund managers who are excellent writers and whose letters get passed around and read by many in the investment community. Everyone here at AVC knows that I think writing and investing fit like a hand and glove and writing and thinking out loud can make you a better investor. The Gotham Gal and I are investors in a number of venture capital funds and I have noticed a trend among venture fund managers to reduce the amount of writing and verbal communication they do with their investors. I understand that it can be time-consuming and that many fund investors don’t even bother to read the reports. But I would urge my peers to resist that urge and to take time to regularly sit down and write about what is going on in your portfolio companies and the markets you invest in. I think it provides insights, raises issues, and gets the entire investment team talking about things in a way that few other regular processes do. Plus I really enjoy doing it. https://avc.com/2018/08/reporting/

Reporting1


At USV, we report to our investors on our portfolio and performance four times a year, once a quarter. We produce an audited report once a year, with our Q4 results. We do that in writing and we also do a quarterly call for our investors three times a year (we combine our Q4 and Q1 calls since our annual audit process slows down our Q4 reporting). In our annual and Q2 written reports, we prepare a short update on every one of our portfolio companies. We call these “one-pagers.” This can be a fair bit of work but we do it regularly and have been doing it since we started USV. I think it is a great discipline for investors to take the time on a regular basis to sit down and write and speak to their investors about what is going on in their portfolio and in the macro environment. It is a time-honored tradition that fund managers write a letter to their investors explaining what they are seeing and doing. Warren Buffet’s letters are a particularly great example of that. But there are many fund managers who are excellent writers and whose letters get passed around and read by many in the investment community. Everyone here at AVC knows that I think writing and investing fit like a hand and glove and writing and thinking out loud can make you a better investor. The Gotham Gal and I are investors in a number of venture capital funds and I have noticed a trend among venture fund managers to reduce the amount of writing and verbal communication they do with their investors. I understand that it can be time-consuming and that many fund investors don’t even bother to read the reports. But I would urge my peers to resist that urge and to take time to regularly sit down and write about what is going on in your portfolio companies and the markets you invest in. I think it provides insights, raises issues, and gets the entire investment team talking about things in a way that few other regular processes do. Plus I really enjoy doing it. https://avc.com/2018/08/reporting/

Reporting1


At USV, we report to our investors on our portfolio and performance four times a year, once a quarter. We produce an audited report once a year, with our Q4 results. We do that in writing and we also do a quarterly call for our investors three times a year (we combine our Q4 and Q1 calls since our annual audit process slows down our Q4 reporting). In our annual and Q2 written reports, we prepare a short update on every one of our portfolio companies. We call these “one-pagers.” This can be a fair bit of work but we do it regularly and have been doing it since we started USV. I think it is a great discipline for investors to take the time on a regular basis to sit down and write and speak to their investors about what is going on in their portfolio and in the macro environment. It is a time-honored tradition that fund managers write a letter to their investors explaining what they are seeing and doing. Warren Buffet’s letters are a particularly great example of that. But there are many fund managers who are excellent writers and whose letters get passed around and read by many in the investment community. Everyone here at AVC knows that I think writing and investing fit like a hand and glove and writing and thinking out loud can make you a better investor. The Gotham Gal and I are investors in a number of venture capital funds and I have noticed a trend among venture fund managers to reduce the amount of writing and verbal communication they do with their investors. I understand that it can be time-consuming and that many fund investors don’t even bother to read the reports. But I would urge my peers to resist that urge and to take time to regularly sit down and write about what is going on in your portfolio companies and the markets you invest in. I think it provides insights, raises issues, and gets the entire investment team talking about things in a way that few other regular processes do. Plus I really enjoy doing it. https://avc.com/2018/08/reporting/

Subscription Income Power – Peleton


Source: http://themusingsofthebigredcar.com/subscription-income-power-peleton/ Peleton, Big Red Car? You’re kidding, right? Shut up and start peddling, y’all, I’m as serious as avoiding a heart attack. So, the Big Red Car likes Peleton for the diversity of its income. It generates sales income – the one off sale of a Peleton bike or treadmill – and monthly recurring revenue with a monthly membership. It also finances the sale of the bike or treadmill at 0% interest while upselling you on shoes, weights, headphones, heart monitors, bike mat, water bottles. Where’s the bike mat and why aren’t you dressed like Lance Armstrong? Who is Peleton, Big Red Car? Peleton was founded in 2012 by John Foley, CEO; Tom Cortese; COO, Yony Feng, CTO; Hisao Kushi, General Counsel; and, Graham Stanton, SVP;  Global Marketing and Sales. John Foley was a manufacturing engineer who transitioned into a digital business guy with stints at CitySearch.com, Evite.com (CEO), Pronto.com (Co-founder, CEO), and Barnesandnoble.com (President, Father of the Nook). On a personal basis, he was a serial entrepreneur and an avid competitive cyclist and tri-athlete. He describes himself as an “addict” of “boutique group fitness classes.” You can take it from there. The big takeaway for the Big Red Car is the confluence of three things – manufacturing engineer, all-around digital commerce guy, and a fitness addict who saw the subscription income value of classes. Perfect storm. The company has raised $994MM of funding starting with a $400K angel seed round in February 2012. Part of the seed round was from Bullish, a very interesting company. Peleton did a Kickstarter campaign which raised $400,000 in November 2014. It just closed a 2 August 2018 injection of $550MM bringing it to that total of $994MM. (Seems like a lot of money for a company this close to an IPO.) The company says it will be its “last” round of funding with an IPO targeted for next year. This is a very traditional growth funding pattern from seed to A-F rounds with a Kickstarter in the middle of things. Well played. Go to CrunchBase and study their funding pattern and the logical suspects who participated. Peleton Funding What is Peleton, Big Red Car? Peleton is a first rate exercise bike (they make treadmills now, also) coupled with a monitor Internet connection to a series of exercise classes, which in the safety and comfort of your home puts you in a boutique exercise class. They used to run a ton of ads, so maybe you’ve seen them on the telly? They sell you the bike for $2245 to $2644 – the difference being shoes, weights, headphones, heart rate monitor, bike mat, and water bottles. They will set the exercise bike up as part of the price. You can make payments over 39 months at 0% interest. You pay a monthly membership fee of $39/month. This is the subscription income component of their revenue model. You attend as many classes as you want, some from a library and some beamed out from a central cycling studio. In this way, they create a networked community. Revenue The reason the Peleton story is of interest to your Big Red Car is that the company has taken a fairly commodity business – exercise equipment – and has created a monthly subscription source of revenue. Remember we talked about the nature of pricing and revenue using Rent the Runway as our exemplar here. Pricing Strategy – Rent the Runway They, Peleton, have also created a cult-like atmosphere – all crazy successful digital companies become some kind of cult – around what might become a daily exercise regimen. Big takeaway – one off retail income plus monthly subscription income in a cult like atmosphere with a networked community. Bingo! So, dear reader, there you have it. Can you find a way to create monthly subscription revenue? If so, you may become a unicorn. But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Be kind to yourself and your loved ones cause the world is awash with mean.              Share this:TweetShare on TumblrPrint Related Source: http://themusingsofthebigredcar.com/subscription-income-power-peleton/