AI Summary
5 min readUSV's New $900M Fund: Fred Wilson, Rebecca Kaden & Mike Mignano
Union Square Ventures closed its largest-ever fundraise — $900 million — and the number came from a deliberate, bottom-up strategy, not a vanity target. "We don't raise funds as vanity metrics," Mike Mignano said during the office tour that opens the episode. "It's not like we got to hit a billion." The fund size reflects a market where outcomes are bigger, rounds are more expensive, and the application layer of AI is beginning to explode.
Why $900 Million and Not a Billion
The fund size grew because the math changed, not because USV wanted to compete on scale. Series A checks that used to start around $3 million now begin at $10 million, with some rounds reaching $100 million or more. To maintain ownership targets and make the fund math work, USV needed a larger capital base. But the partnership resisted going bigger than their strategy allowed.
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What you'll learn
- 1 (00:08) **Fundraising Announcement & Strategy** - USV announces $900M in new funds, the largest in the firm's history, and explains the strategic rationale behind the size.
- 2 (07:24) **Incubating Companies: The Supertake Example** - Mike Mignano discusses USV's new strategy of incubating companies internally, using Supertake as a case study.
- 3 (09:30) **Why Venture Capital Still Matters** - Despite the decreasing cost of building a product, the hosts argue that venture capital remains essential for scaling and breaking through.
- 4 (12:39) **Mike Mignano's Hot Take: The User Interface is Not Dead** - Mike argues against the prevailing narrative that AI agents will replace all user interfaces.
- 5 (15:15) **The AI Era vs. The 2004 Internet Era** - Fred Wilson draws a parallel between the current AI moment and the early commercial internet, focusing on the application layer.
- 6 (17:04) **Where Does All the Capital Go?** - The partners explain the new cost structures justifying larger fund sizes, including compute, energy, and go-to-market.
- 7 (21:53) **Network Effects vs. Scale in the Agent Era** - The discussion contrasts the old strategy of scaling for network effects with the new challenge of building retentive, multiplayer AI products.
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Show Notes
USV spent 20 years keeping its funds small on purpose. Its new $900M raise is the largest fund cycle in the firm’s history.
I sat down with USV General Partners Fred Wilson, Rebecca Kaden and Michael Mignano at the firm’s New York office to unpack why one of venture capital’s most disciplined early-stage firms is getting bigger now, and what they think the next era of AI will look like. Together with General Partner Nick Grossman, they’re leading USV into its next chapter.
USV was early to Twitter, Coinbase, Stripe, MongoDB, Twilio, Etsy, Duolingo and Abridge. More than 20 years after Fred Wilson and Brad Burnham laid out the firm’s original internet thesis, Fred believes AI today looks a lot like the internet in 2003. The infrastructure is here, but many of the defining applications have yet to be built.
We get into why AI is making products cheaper to build but breakout companies potentially more expensive to create, why ARR can hide weak retention, the growing importance of founder storytelling, personal AI agents, the “Rebel Alliance” around open AI infrastructure, and why energy may be one of the cleanest bets on AI.
At the center of USV’s new thesis is “obliterate, don’t automate.” Instead of making existing industries incrementally more efficient, AI could completely restructure them. Fred’s version is simple. Don’t hire a lawyer, use an AI lawyer. Don’t hire an accountant, use an AI accountant. Don’t hire a doctor, use an AI doctor.
Fred Wilson: https://x.com/fredwilson
Rebecca Kaden: https://x.com/rebeccakaden
Michael Mignano: https://x.com/mignano
Molly O’Shea: https://x.com/MollySOShea
Sourcery: https://x.com/sourceryy
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