Venture Trends Newsletter, Issue #10
In this week’s free issue there are some amazing things to highlight.
- Warren Buffet on Lessons for Investors during Covid-19
- 5 Things a new Virtual Manager must do
- 13 huge companies that started in a recession
- VCs – Good and Bad Behavior in the Pandemic
- Great tools for Virtual Meetings, Streams and Live Events
- Fred Wilson on Bitcoin in the Crisis
- What to do if you are funded, or seeking Funding
This newsletter gathers together this week’s most interesting content related to the Venture capital ecosystem. I read every day and this is curated from my weekly reading. I help startups tell their story at https://archimedes.studio
I email the newsletter on each weekend. There is little or no commentary included, it is the things I found compelling or interesting.
There is a free version, and a paid version that includes access to content for full subscribers only. If you are not a full subscriber and you want to be then please open the weekly supplement and choose a monthly or annual plan.
I accept payment in crypto currencies also. If you pay in crypto please email keith+venturetrends@teare.com so I can provision your subscription.
This week’s paid version is here – Venture Trends for Paid Subscribers
Stories in the paid version this week:
- Female Founders – tired of waiting for gender parity
- Mistakes to Avoid Searching for Capital
- Top traits VCs look for in a Founder
- How VCs calculate Valuation
- Is it best to have multiple investors or 1?
- How to recognize you are not a Founder by nature by Paul Graham
- Max Niederhofer on the Psychology of being a VC
16 Lessons from Warren Buffett for COVID-19 Investors
1. “We [Buffett and Munger] want the business to be (1) one that we can understand, (2) with favorable long-term prospects, (3) operated by honest and competent people, and (4) available at a very attractive price.”As expressed in the 1977 Berkshire Hathaway Letters to Shareholders , Chairman Warren Buffett and former Vice Chairman Charlie Munger’s approach to acquisitions and securities was largely the same: understand the company, the industry, the team, and the price.
So while there’s no one way for managing virtual employees — just as there’s no one way to manage anyone — there’s a number of things you can do to build trust, increase collaboration, and make sure people are still delivering the high quality work that you know they can.One-on-one meetings between a manager and employee are one of the most important tools we have in tool in both exchanging information and coaching people.
The Impact Of Coronavirus. Advice For Small Businesses, Startups Who Have Been Funded And Those Startups Seeking Funding.
And it you don’t have enough cash on hand, look at how you could cut expenses or increase sales by doing something different.Three, they offered advice and counsel across six major areas that included cash runway, sales and marketing forecasts and critical operations expenses.
https://t.co/WFQZVwPgyq from @pearvc pic.twitter.com/ahKJTwpccv
— Elad Gil (@eladgil) March 14, 2020
What I’m hearing about venture right now
Stories by samir kaji on Medium
While it’s impossible to accurately project the path of the pandemic, it is safe to say that havoc in the financial markets is a short term certainty — In the last week alone, we experienced a 2,000 point drop in the Dow, and clear signaling that the fed will exercise aggressive monetary policy this upcoming week with a large fed funds rate cut.As uncertainty brings turbulence to capital markets, I spent the week speaking with fund managers, limited partners, bankers, and companies to get their thoughts on what they were seeing.
Visualizing the History of Pandemics
The more civilized humans became – with larger cities, more exotic trade routes, and increased contact with different populations of people, animals, and ecosystems – the more likely pandemics would occur.Despite the persistence of disease and pandemics throughout history, there’s one consistent trend over time – a gradual reduction in the death rate.
Why Remote Work Options Are Crucial in Times of Crisis
One of the most important reasons employers should be giving employees the option to work from home is to help contain and end COVID-19.Many have given their employees the option to work from home while others have put procedures in place to keep business going.
13 Massive Companies That Started During a Recession
Though he officially got his start years earlier (and survived several smaller recessions during the 1880s), Thomas Edison and company launched General Electric right as the nation was heading into the Panic of 1893, a period of 16 months where business activity dropped nearly 40% across the nation.Launched as the Computing-Tabulating-Recording Company (CTR) by Charles Flint in June of 1911, IBM got its start selling commercial and business machines right in the middle of a long two-year panic.
Turns out it’s fairly straightforward, so much so that it makes me think that a lot companies and organisations are really behind the times in how they manage their workforce—and with coronavirus, they’re going to have to address this sooner rather than later.The coronavirus pandemic means millions of office workers around the world may be forced to work from home — many for the first time.
Coronavirus Pandemic Elevates Case For Universal Basic Income – It’s Needed At Scale And Urgently
Now thought leaders and politicians spanning the political spectrum are uniting to elevate basic income – a model for providing every person with an unconditional sum of money, regardless of employment status, income or resources – as an essential requirement at this time of extreme financial challenge.Two days after Ocasio-Cortez’s comments, which were well received within her party and across the divide with the Democrats, the New York Times published a chilling article explaining how in times of crisis wealth inequality is exacerbated.
Some VCs Urge Startups to Jump on Opportunities Amid Downturn
Venture investors are taking stock of their portfolios and making projections about how the bear market and the coronavirus pandemic could play out. While many VCs are urging caution, some investors believe some companies should look for opportunities to be more aggressive in the market rout by accelerating hiring, fundraising, acquisitions and marketing.
Bitcoin survives Covid19 – Fred Wilson
So when a macro event hits the markets, all assets get sold in a “risk off” trade to increase liquidity and buy some time to figure out what is going on. Zoom sold off with the market over the last week and a half but has rebounded nicely and year to date is up something like 75%.
5 Financial Steps Portfolio Companies Should Make Now
If your company is large enough to make a choice between growth and profitability, you should cut back on marketing and sales expenses so you can become cash flow positive. During the 2008 financial crisis, the company cut its marketing and sales expense — becoming profitable within one quarter.
How to Create and Host a Virtual Conference | Mighty Networks
Whether you are transitioning a physical event into a virtual one out of necessity or seizing this moment to bring people together online for the first time, here’s a quick guide on where to start, where to focus, and what you need to create a virtual conference today.Having a strong community platform set up before you host your virtual conference means the opportunity to think bigger and more creatively about what your attendees want around your topic over time.
A guide to creating a virtual conference
To the extent it is helpful to anyone, I just wrote a guide to creating a virtual conference (with the help of some awesome @MightyNetworks Hosts like @taragentile). https://t.co/p5F0xH6Vpm
— Gina Bianchini (@ginab) March 18, 2020
It sounds like some VC funds are renegotiating deals with startups
It sounds like some VC funds are renegotiating deals with startups (including those not as directly impacted by the pandemic) to get a significantly lower valuation—citing market uncertainty. If this is happening to you, I’m all ears.
— Kate Clark (@KateClarkTweets) March 18, 2020
Coronavirus vs. startups
Additionally, some startups are offering free trials or extending services to help their fellow entrepreneurs weather the storm, and to (hopefully) increase interest in their product.Unsurprisingly, there is a flurry of interest in the healthtech industry, with supranational organisations offering for fast-track funding for COVID-19 solutions, and venture capital firms and angels looking to do their part for global health and ride the wave.
Just saw a growth graph of a startup used for remote work. That’s a nice curve, I thought. Then I realized the scale on the x axis was days.
— Paul Graham (@paulg) March 19, 2020
VCs are open for business but it’s a new world
So we changed plans, came back home Tuesday night and will self quarantine for 14 days (I’m sure it will extend longer).His response: we are in a new world and we need to adapt.
VC Firm Sequoia’s Nuanced Message: A ‘Black Swan’ In 2020 Versus ‘RIP Good Times’ In 2008
In a March 5th post titled Coronavirus: The Black Swan of 2020, Sequoia Capital confirmed it is already seeing a drop in business activity, disruption of the supply chain and travel curtailment.
Virtual Meetings Don’t Have to Be a Bore
Harvard Business Review
His advice includes: embracing the differences between an in-person and online setting and recognizing there are advantages to the latter; making it feel personal; getting used to delayed feedback; convey warmth and presence; and keeping it interactive.For starters, I like to arrive to my online meeting early so I can greet people as they pop up on the screen and engage in a bit of friendly small talk before the main meeting.
A Guide for Working (From Home) Parents
Try three steps: identify your family’s old routines and decide which you can keep as similar as possible, create modified work schedules that allow you and your partner to get as much done as possible around those routines, and swap in new ways of doing old things.They’re used to managing the usual challenges of dual working parents — coordinating childcare with schools and activities, managing meals and household chores, and spending quality time together on the weekends.
For seed managers; wonder how many are adjusting reserve strategies? Drop in follow-on round pricing, flat rounds, and more required inter-round financing likely; all extra dilutive to the thin ownership %’s most have at initial invesment.
— samir kaji (@Samirkaji) March 19, 2020
Venture capitalists believe investment will continue for startups, with some slowdown
An economic downturn is never good news for startups raising capital, but early-stage companies in Atlantic Canada will likely be buffered somewhat by the strong participation of government in funding high-growth companies.“Probably not much will change because a lot of the VCs here are backed by the governments,” said Patrick Hankinson, partner at the Atlantic Canadian pre-seed fund Concrete Ventures.
Wondering if venture capital is open for business? A new initiative has investors saying yes
Laurent Grill, one of the investors at Luma Launch (which is the corporate investment arm of the film studio Luma Pictures), has been working in the Los Angeles venture community building and backing startups for about a decade.A new initiative from a Los Angeles investor is taking stock of venture firms and their ability to commit capital in an effort to match firms that are still open for business and cutting checks to startups that are fundraising in the age of COVID-19.
Many Silicon Valley deals are on pause until coronavirus uncertainty clears
Private deals are being held up thanks to new economic risks and “shelter in place” restrictions making it impossible to evaluate start-ups in person.The research firm also expects a “sustained pullback” in venture capital-backed exits, which already started slowing through the end of last year.
Learn to do Streaming and Live Feeds.
So now I have the ability to stream a feed via OBS from the SDI or HDMI input on the Blackmagic Mini Recorder, fed from one of 4 sources switched by the Atomos Sumo or Shogun 7.OBS is s great piece of software that can convert almost any video source connected to a computer into a live stream that can be sent to most platforms including Facebook and YouTube etc.
Every startup CEO right now: – How do I extend runway to 24 months? – Raise debt – Open up a SAFE at last round terms…
Every startup CEO right now:
– How do I extend runway to 24 months?
– Raise debt
– Open up a SAFE at last round terms
– Cut hiring plan by half
– Cut inefficient marketing spend
– Should we go 100% remote?
– How do I make revenue like a regular business? ?— Michael Karnjanaprakorn (@mikekarnj) March 18, 2020
‘Private equity, venture capital investments slips to 24-month low’
Private equity and venture capital investments recorded a 24-month low of USD 1.7 billion in February this year, primarily on account of significant decline in large deals, says an EY report.
Advice for startups damaged by the epidemic. Can you think of a way to survive by adapting to the new conditions instead of merely enduring them? Enduring will suffice, but if you adapt you could end up net stronger.
— Paul Graham (@paulg) March 18, 2020
A Guide to Managing Your (Newly) Remote Workers
Then managers can support remote workers with 1) regular, structured check-ins; 2) multiple communication options (and established norms for each; 3) opportunities for social interactions; and 4) ongoing encouragement and emotional support.In some cases, employees feel that remote managers are out of touch with their needs , and thereby are neither supportive nor helpful in getting their work done.
Coronavirus Has Pushed Our Working Model 5 Years Ahead of Time
For a lot of people, it is their first time working from home or remotely.The company quickly set up a new way of working and trained up everyone to use the latest tools.
How to Have More Meaningful and Effective Virtual Meetings
I regularly facilitate online group coaching cohorts, and even recently ran a 3-hour training with virtual breakout groups for over 100 people.Sure, there’s always the person or two who has a tech issue, but when the majority of the digital room can see each other, meetings are automatically way more dynamic.
Where top VCs are investing in remote events
As more and more hosts consider staging fully remote events as possible alternatives, we decided to take a deeper look into the venture-backed startups focused on supporting large-scale virtual gatherings, like Hopin and Run The World .To further understand the impact of COVID-19, we asked five leading VCs who have invested in or have knowledge of startups focused on remote events to update us on the state of the market and to share where they see opportunity in the sector:
How to successfully pitch a VC virtually during #COVID19:
? Prep your environment
? Choose the right tools
?♀️ Invite key people
? Build rapport
? Tailor your pitch
?️ Use a dynamic voice
? Listen
?Follow uphttps://t.co/nwurv0Jei1— Maren Bannon (@Maren_Bannon) March 17, 2020
When this growth investor expects startups will be able to raise again
Earlier today, TechCrunch caught up with Chris Sugden , a managing partner at Edison Partners, to talk about the current fundraising market, what’s next for SaaS startups and if there’s any good news to be found in today’s market.Regarding stage, Sugden said that Edison looks to put capital into companies with between $8 million and $20 million in revenue, noting that the larger companies stretch his firm’s check size to the max.
The VC Fundraising Environment and COVID-19
Sapphire Ventures Perspectives – Medium
It’s only Tuesday morning and already it’s been a tough week and while it’s too early to know exactly how #COVID19 will impact the #VC fundraising environment.#COVID19 is unprecedented, and it’s going to take time for us to sort out the impacts.
1/ Startup founders, let’s talk about reforecasting – everyone’s favorite topic! A short thread
— Shiyan Koh (@shiyankoh) March 17, 2020
This is a pandemic, not a “reset.” Nobody should be shaking hands. Every one of us has a role to play. “Leadership” has been replaced by an awakening to our own greater social responsibility.
— adeoressi (@adeoressi) March 17, 2020
I’m seeing this happen. Reputation is everything. Entrepreneurs are taking notes, and sharing them. https://t.co/0BO5wulMlU
— Matt Mullenweg (@photomatt) March 17, 2020
Have hundreds of unicorns missed their exit window as Q1 IPOs grind to a halt?
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.That means missed Q1 and Q2 revenue growth, bookings, and the like from startups domestically and around the world.
The Great Shift to Video
It has been astonishing (and largely encouraging) to see nearly every activity that can be shifted to video begin to go there.Everyone is at home, and a lot of people are connected to video.
An Update on YC S20 International Interviews
The Summer 2020 batch is still on, however due to safety concerns relating to COVID-19, YC staff will no longer be traveling to do interviews. We will still be interviewing startups from all over the world (with safety modifications), but local interviews in Bangalore, Paris and São Paulo are canceled.
How coronavirus will impact startup fundraising
Companies that have recently raised, or have more than six months of runway, should also be fine, says John Spindler, a seed investor and chief executive of London-based entrepreneur support organisation Capital Enterprise.Over the past week venture capital investors, from prominent US venture capital firm Sequoia through to newer European funds like Angular Ventures , have been sharing advice with their portfolio companies about how to weather the situation.
From Passive To ‘Activist’ Investing: Redefining The Role Of VCs
Despite the current challenges being endured by startup communities all over the world as a result of COVID-19, ongoing geopolitical tensions and stock market destabilization, 2020 is still a pretty good time to be a founder looking to grow a business in the burgeoning global tech sector.This type of approach to VC investment creates a high stakes environment for everyone in the fund, which is why it’s alarming to see so many VCs seemingly content to sit back and let their portfolio companies sweat it out, rather than stepping in to provide hands-on support and direction.
Dominic Cummings got his British Darpa. Can he make it work?
If post-Brexit Britain is to be the global capital of science and technology as Cummings and Boris Johnson propose, a UK version of the US’s Advanced Projects Research Agency ( Arpa ), currently called Darpa, is an important foundation.There are three chief challenges for a democratic government that wants to fund breakthrough technologies: the challenge of risk and public failure; the challenge of electoral cycles; and the challenge of being a “venture customer”.
Nigeria: ‘Venture Capital Will Shape Nigeria, Others’ Future
Brown, who is a Director at GreenTree Investment Company, said this during an interactive session on the theme: “Venture Capital Financing in Africa,” organised by Proshare Nigeria Limited, pointed out that beyond providing finance, venture capitalists also come along with technology as well as innovation.A Venture Capital Investor, Dr. Ola Brown, has stressed the need for entrepreneurs in Nigeria and other countries in Africa to embrace venture capital financing to expand their businesses as well as to stimulate economic activities.
20VC: True Ventures’ Toni Schneider on How Being CEO @ Automattic (WordPress) Made Him A Better Investor, The Biggest Lessons from Automattic on Running Successful Remote Teams and The Right Way For Investors To Show Founders They Have Their Support (Note
The Twenty Minute VC: Venture Capital | Startup Funding | The Pitch
2.) Does Toni fundamentally believe it helps when investing to have been both an operator with Automattic and Partner @ True? Toni Schneider is a Partner @ True Ventures , one of the valley’s leading early-stage firms with a portfolio including the likes of Peloton, Hashicorp, Fitbit, Automattic (WordPress) and Tray.io to name a few.
A more practical way to understand what product-market fit is — thinking in terms of your product or solution value proposition to the customer segment that is willing to pay for that value you are providing.E.g., a company called Arivale Inc in 2019, that failed with a total funding amount of $52.6M had trouble finding a market fit for their product.
Seed Investing Macrotrends: An Interview with Kelli Fontaine from Cendana Capital
Stories by Silicon Foundry on Medium
Seed Investing Macrotrends: An Interview with Kelli Fontaine from Cendana Capital By Steve Gotz, Silicon Foundry
Recently, Silicon Foundry had the opportunity to sit down for a conversation with Kelli Fontaine from Cendana Capital, a $1B AUM fund-of-funds that exclusively focuses on investing in Pre-seed and Seed VC funds.
“Stubborn founders fail, Conviction wins”
Having said that, I think the strengths that I bring to the table are around building strong relationships with the founding team, and being able to play the role of mentor to the founders.Initially, he was under the impression that he will know his strengths and weaknesses in under five years and understand what works and what doesn’t within that time frame.
Jeff Jordan of Andreessen Horowitz – Interviewed by Kara Nortman
a16z Managing Partner Jeff Jordan speaks with Upfront partner Kara Nortman multi-stage investing at the firm; trends in VC; how and in what sectors he makes investment decisions including Airbnb and Overtime; how his experience as an operator informs his role as a board member; and the benefit of sports experience as a VC.
The WeWork Effect: How It Trickles Down and Affects the Fundraising Landscape
In this article, I will attempt to explain how the attempted WeWork IPO debacle affected fundraising top-down, why the stages of investment are changing and finally what this means for founders raising capital in 2020 and beyond.With more data available to make safer investments at the earliest stages, as well as easier access to top-tier talent, larger VC firms are returning to LP’s faster than ever to raise more money.
21 of The Top Product Announcements You Missed at SaaStr Annual
Pendo announced a new offering aimed to help startup companies accelerate product-market fit, and prove that product traction to early stage investors.Learn more about Bandwidth’s new communications API suite built for scaling SaaS companies here , or schedule a meeting today to get the conversation going.
Investor Stories 134: Post Mortems (Vrionis, Horowitz, Banister)
On this special segment of The Full Ratchet, the following Investors are featured: John Vrionis David Horowitz Cyan Banister Each investor discusses a portfolio company that did not survive and why it was that they failed.
Why Are VCs Attempting to Kill Unicorns?
Questions, whether VC’s are currently committing investment-malpractice, stifled technological-societal growth and ultimately defeated the intended purposes of VC, by attempting to kill-off the very Unicorns they are allegedly trying to find.Therefore, this determinant question needs to be asked… If a startup were to achieve Unicorn status ($1B) in six years, which investment result would investors in the VC fund rather achieve?