February 14, 2005
A New VC in Town…Sort of
My friend and Board member Fred Wilson just announced last week the formation of his new VC firm, Union Square Ventures, along with his partner Brad Burnham. Brad Feld beat me to the “way to go” posting, so while I chime in with my congratulations to Fred and Brad and assert to the rest of the VC/tech blogging world that this firm will succeed famously, I thought I’d comment on two other aspects of Union Square Ventures’ formation.
First, NYC has long been a haven for later stage private equity and buy-outs, and there’s a big need in the NYC area (even the DC-Boston corridor more broadly) for top tier early stage venture capital players. While there are fewer core techonlogy companies in the area, there are an increasing number of application and service companies that are building great businesses in this part of the country, and there are not enough great VCs to keep up. West coast VCs are often (but not always, as I’ve seen in my investors Brad from Mobius and Greg Sands from Sutter Hill) allergic to east coast deals, and sometimes it’s just good to have one of your main investors walking distance away. Fred and Brad have the reputations, track records, and networks to at least partially fill this void.
Second, as Fred noted in a subsequent posting on Flatiron and its remaining portfolio companies (including Return Path), Fred and his former partners from JP Morgan are not abandoning their prior investments. This speaks volumes about the kind of people they are and the commitment they have to their entrepreneurs.
I’m sure Union Square Ventures will be successful, and I’m glad I have the opportunity to see it up close.