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Summary:

During a recent interview in Toronto, venture investor Fred Wilson shared some thoughts about the recent “AngelGate” clash between “super-angels” and traditional VCs, as well as some of the big trends online that he is thinking about as he makes investments for Union Square Ventures.

Fred screenshot 3x2

I had a chance to talk with Union Square Ventures partner Fred Wilson today, both during and after a meeting he had with half a dozen startups at the offices of Extreme Venture Partners, a fund and incubator based in Toronto. Wilson — whose firm has a stake in a few companies you may have heard of, such as Twitter, Foursquare and Zynga — came to town in order to meet with both venture investors and startups with a view toward possibly investing in some Canadian companies. Afterward, he said that the Toronto startup environment “reminds me a lot of New York.”

I’m going to write a separate post about some of the companies that Wilson met with and his thoughts on the local startup ecosystem, but during our conversation, the venture investor also had some comments about the recent “AngelGate” clash between “super-angels” and traditional VCs, as well as some advice about the big online trends he’s considering as he makes investments for Union Square. There’s a short video interview embedded below, but here are some of his thoughts, if you don’t have time to watch the whole thing:

On AngelGate:

The reality is that market has changed a lot in the last two or three years. There’s a lot more money out there, it’s gotten very competitive. And usually what happens when things get competitive is prices get bid up, terms change, and the early participants feel it — they can’t win every deal, they can’t be in every deal and I think people start to get nervous. I think that’s largely what you’re seeing. You’re seeing people who’ve been in the market for a long time worrying about the fact that their market position isn’t what it used to be.

Wilson also talks in the video about whether the so-called AngelGate meeting represented “collusion,” and whether some of what happened was a result of personal egos getting out of joint. During the startup meeting he attended, when asked about the “super-angel” phenomenon, Wilson said that he thinks on balance it can be a very positive thing for VCs like Union Square. “If someone wants to put in $250K and work as hard as I do, even though I’ve invested a lot more, I say bring it on,” Wilson said. “That’s a home run for me and a home run for the entrepreneur.” Among the super-angels who take this approach is Ron Conway of the SV Angel fund, Wilson said — “he works that hard for everyone, regardless of how much he has put in.”

Trends to be aware of:

Globalization is a huge trend. If you look at FB, Twitter, Google — 75 to 80 percent of their users are outside the U.S., so globalization of web services at scale is something I’m really interested in. There are entrepreneurs all over the world creating new web services that are as interesting as those getting created in the traditional tech centres like the Valley, Boston, New York. So globalization is probably the number one thing I’ve been thinking about.

Wilson also talked about the implications of mobility and how he is thinking about that in terms of his investment. But he means more than just mobile with respect to specific devices or services, but how people can participate online from anywhere, and how more and more data is being produced because mobile devices have sensors that can change your experience or add value to it in a variety of interesting ways.

What he is thinking about now:

I’m really interested in the intersection between reputation, identity and knowledge — so things like Quora and StackOverflow (a Union Square Ventures portfolio company). These kinds of services use social media in a narrower and maybe higher-value way to help people, and that’s really interesting to me. If you look at StackOverflow, developers who do the best job of generating answers to software development issues have their reputations rise in the system, and on the back side of StackOverflow is a job board, and so employers can come in and hire people and see what their reputation is. So when you think about how a Q&A site flows into a job board and how reputation is the key connective tissue there, I think that’s a really fascinating thing.

Related GigaOM Pro content (sub req’d):

  1. Another cool site in NY is Hashable!

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  2. @jasson

    i agree. hashable was built by one of our portfolio companies. i use it quite often.

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    1. Thanks again for taking the time to sit down with me, Fred — and for coming to Toronto as well.

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  3. Great to hear you mentioning reputation systems, there’s still so much to be seen in the incentives for user engagement. Thanks for your insight Fred!

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  4. Thanks Mathew for facilitating these insights from Fred, given the short time we had. Glad that you asked him about Angelgate and I thought his analysis describing the changes that are happening to the VC industry was the point and very indicative of the underlying current.

    It’s ironic that (some of) those VC’s that are investing in companies that are supposed to “change the world” aren’t able to change and adapt themselves.

    What will be interesting to see is how this plays out over the next 6-12 months. My gut feel is that this was only the first shoe that dropped.

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  5. [...] Fred Wilson on Angel Gate and Where the Web Is Going – GigaOM [...]

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  6. [...] series of meetings with startups and venture investors, and I had a chance to sit down with him and get his thoughts on “AngelGate” and other topics. I also sat in on one of the meetings he had at the office of local VC Extreme Venture Partners, [...]

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  7. What you call as “Revolution and not Evolution” is described in LALIAFLIA:
    http://laliaflia.blogspot.com/2009/06/star-beats-tree-in-creativity.html

    The Star (Revolution) beats the tree (Evolution) in creativity.

    We got insane business ideas if you want to invest just contact us.

    Esayas

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  8. [...] de avaliar start-ups. O assunto gerou bastante repercussão e Fred Wilson da Union Square Ventures, disse ao GigaOm que agora há mais pessoas no mercado de Venture Capital e Angels, a competitividade aumenta e pode [...]

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  9. [...] What does famed VC Fred Wilson like? “The intersection between reputation, identity and knowle… [...]

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  10. [...] more topics, and is backed by Union Square Ventures (whose most prominent partner, Fred Wilson, spoke highly of Quora in a recent interview with GigaOM). A recently launched legal Q&A site called LawPivot has been described as a “Quora for [...]

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