Portfolio.com: Is the U.S. in a recession?

Wilson: I think probably, yes. It just feels like consumers are pulling back, banks are pulling back. That's generally the sign of a recession. Technically are we in a recession? We haven't had two down quarters of G.D.P. So no, we're not technically in a recession, but usually by the time we're technically in a recession, we're on the way out of it.

Portfolio.com: What effect would a recession have on Union Square Ventures?

Wilson: I think we have to be mindful of the overall macro environment that we're in. And if the financing environment changes, we'll take advantage of that and invest in companies at lower valuations than we would otherwise be paying. It will be less attractive to sell our companies, so we may choose not to do that, and we may choose to continue to finance them and grow them and develop them some more. It may mean that we finance our companies differently. We may finance them for longer periods of time, and take a more conservative approach to how we do the financing rounds. So I think we will have to adjust.

Portfolio.com: A lot of people are suggesting that we're experiencing a bubble reminiscent of the Internet boom and bust of the late 1990s. Do you agree?

Wilson: All markets have boom and bust cycles, and I think venture capital market has even more exaggerated boom and bust cycles. We have been in a boom cycle, like we were in the 1996-2000 phase. But back then the Web was brand new, and we didn't really know what to do with the Web. So we hatched companies and came up with ideas like, "Let's take something that exists in the world we understand and let's port it to the Web."

So we got Amazon—a store on the Web—and we got a lot of those kinds of companies where we took traditional concepts and applied them to the Web. Let's take a newspaper and put it on the Web. Let's take the Wall Street Journal and put it on the Web. You get TheStreet.com.

It wasn't really until we'd been working on the Web for 6, 8, 10 years when native things happened. Social networking is a native thing. Internet auctions, like eBay, are native Web businesses. Google is a native business. Now we have all of these things that are much more natural to the Web. We're doing smarter things in terms of the way we're constructing these companies and the way these companies are getting built.

That's not to say there aren't dumb things going on. There are dumb things going on. But I think collectively, we're all a lot smarter.

Portfolio.com: What's an example of a dumb thing that's going on now?

Wilson: I think a lot of the people who are trying to do video on the Web right now, and are trying to create shows on the Web by taking examples that come from the cable world. As in, "We need to create a show that people come back to every day at the same time and watch it." That's probably not the native way that people are going to do video on the Web. I watch my kids and the way they interact with YouTube for example, and that's a different way of watching video than the way they watch TV. They still like to watch TV on the TV, but video on the Web needs to be Web-video, as opposed to TV taken to the Web. So I think some of the people who are doing video on the Web right now haven't figured that out.