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BTS with Union Square Venture's rising star analyst
Invested features uncensored takes from within the inner workings of America's prestigious venture capital firms. Edition #02 spotlights Dani Grant of Union Square Ventures.
Welcome to Invested, Supermaker’s series featuring uncensored takes from within the inner workings of America's prestigious venture capital firms. Invested is led by Leah Fessler, journalist, investor, and Head of Editorial at Chief, and Alex Marshall, a venture capitalist focusing on special projects at First Round Capital, and co-founder of HealthIQ.
Among the most influential and successful venture funds, Union Square Ventures holds a unique presence. While Sequoia, a16z, and many of the largest VC funds were founded and remain in and around Silicon Valley, USV has always proudly ran its operations, and many of its investments, out of New York City.
Founded in 2003 by Fred Wilson and Brad Burnham, who have since become two of the most prolific thought leaders in tech, USV sets itself apart as a thesis-driven fund, honing in on both hot market trends and the partnership’s personal interests. This strategy has paid off in spades, earning USV investments in various big-name successes, including Twitter, Tumblr, Etsy, Carta, and Coinbase. In 2019, USV secured $429 million across two new funds.
Since its founding, USV has made a strategic and concerted effort to hire cognitively and demographically diverse investors. In 2017, the fund brought on Rebecca Kaden, a brilliant VC previously at Maveron (where she worked her way up from associate to partner in a matter of years) as USV’s first female partner.
Today, USV’s tight-knit team counts many women among its core contributors, including rising star Dani Grant. After graduating from New York University’s Gallatin School of Individualized Study in 2015, Grant worked in product strategy at Buzzfeed and Cloudfare prior to joining USV as an analyst in 2018. In addition to self-publishing more than a dozen whimsical and useful tools, games, and widgets, Dani is also an Analyst at USV.
Supermaker interviewed Grant about her perspective on USV’s thesis-driven investment strategy, how she pivoted from product to VC, and where she sees her career expanding in the future.
Name: Dani Grant
Job Title: Analyst
Years at present job: 1.5
Education: The Gallatin School of Individualized Study at NYU, 2015, major in Human Computer Interaction
Previous job: Product Manager at Cloudflare
Fessler: A lot of people outside VC aren’t familiar how funds are structured, and why. What is your job title, and what does this mean, within the context of USV?
As an analyst, some of the job is: go learn about something not many people at the firm know too much about, and then come back and share what you’ve learned (Terri Burns at GV likens this to writing a book report, it is a perfect analogy). Along the way, the goal is to try to find some companies for the firm to potentially look into backing.
A lot of the job is also meeting with companies who are raising and trying out their products, talking to their customers, and doing some research to try to figure out if there is a fit with the types of businesses we are looking to back.
Once in a while there is also a research project to do for a company in the portfolio. This is always very fun.
And there is also a more back-of-the-office component where, once in a while, we will do some work on valuations or reserves analysis.
USV is one of the most famous VC firms, not only because of its outstanding investments, but also because of its thought leadership as a thesis-driven fund. What drew you to thesis-driven investing?
I think a thesis can give you the gift of focus. Most of the categories we are interested in—like education, crypto, healthcare and energy—are very broad, and it’s useful to try to find a thesis for where it makes the most sense for us to spend our time looking for investments. For example, last year we decided an important priority for us in crypto was to back projects that would help get crypto wallets in the hands of a million users, and that made it a clearer decision to consider joining the Libra Association.
When you were in school, did you aspire to get into VC?
Once when I was in school I met Brian Watson who was, at the time, an analyst at USV. He was so impressive, so I had this idea that USV must be an exciting place to work, filled with Brian Watsons.
The other VCs I met while at school were Peter Boyce from General Catalyst and Sam Smith from First Round, who are both so imaginative, thoughtful, and broad thinking. That made me think that being on a VC team must be so collaborative and interesting.
A lot of people aspire to work in VC but have no clue how to get there. Being as specific as possible, what steps did you take to land this role at USV? What did the interview process look like, and what do you think made you stand out as a candidate?
Often people ask what background you need to have to get into VC. One of the interesting things is that it’s not always about your individual background — it’s often actually about balancing out a team. For example, it is extremely helpful to have someone with a finance background in a VC firm, but not everyone needs to have that background, one person is generally enough. Or, it is extremely helpful for there to be a moderately technical person on the team, but not everyone has to have that technical perspective.
The other piece of advice I have for getting into VC is to architect yourself into a situation where you are already in the mix of the VC community. One person who has done a great job at this is Harry Stebbings with the 20 Minute VC podcast. Another is Tony Sheng who writes a fantastic blog on the crypto ecosystem that many crypto VCs read, and recently joined Multicoin Capital.
What’s your personal strategy for sourcing deals and sustaining a high-potential top of funnel for your dealflow? What are your top tips for effectively communicating the potential of a deal to higher-ups in VC?
The thesis really helps here. We often outreach to founders who are building things that we think align with the types of businesses we are looking for.
Another tool we often do use is to blog about the types of businesses we are interested in backing to get the word out to founders who are looking for aligned VCs.
As a non-partner VC, working as an analyst, what does your dynamic look like with your other colleagues?
USV has a great, collaborative team dynamic. A group of us have a weekly meeting where the format is everyone brings a question to discuss. This meeting has the very formal name weekly top of funnel brain jam.
To share ideas, we also have an all-team, three-hour discussion once every other month. Usually there is an agenda of questions or themes we’d like to discuss and often someone will send around some pre-reading.
Why venture as opposed to operating at this age and stage of your life?
A really valuable lesson I learned from Dane Knecht, my manager at Cloudflare, is that a great way to get up to speed on something is to try to build it. At the time, I was working on an IoT authentication product. He sat with me for an afternoon and helped me build the first (very basic) prototype.
I think that’s very applicable in venture where the job requires getting up to speed quickly. As I’ve been working at USV I’ve also been tinkering on lots of small side projects that have helped me better understand the spaces I look at.
What do you hope for your professional future, in or beyond VC?
I really don’t know yet. I do hope that in the future I am lucky enough to continue to work with people I respect, enjoy, and find endlessly interesting. I have been lucky to get to do that at Cloudflare and at USV.
It’s no surprise that women and people of color are underrepresented in venture. As a woman, when have you felt most empowered and encouraged? When have you felt most discouraged or frustrated? What are the top 1-3 things men and non-straight white cis people in VC can do, in your experience, to bolster diversity and inclusion within the industry?
I am wildly lucky to work with a team of people who see me at face value. I realize that is not something every person gets to have at their place of work.
My colleague Rebecca recently wrote a fantastic piece for HBR about actionable things we can all do to advance gender equality. I recommend everyone go read it, it’s clear, insightful and actionable. Here’s a sample:
“Social media has made elevating other women easier than ever. We all have the ability to be each other’s promoters and advocates. Sing the praises of your coworker who won the deal or built the product. Find reasons to share with your community the accomplishments of women you admire. Doing this encourages others to follow suit — and perhaps to do more than they thought they could. When I was four months pregnant with my son, Max, I watched Katrina Lake of Stitch Fix ring the Nasdaq opening bell with her toddler in one arm, and I felt the importance of the moment. Her personal balancing act was a reminder that I could attempt the same. So much more seems possible when you see it with your own eyes: If she can do it, I can, too.”
Which other non-partner VCs are you’re most inspired by, and why?