Venture Trends Newsletter, Issue #13
I read daily and this newsletter gathers together this week’s most interesting content I saw related to the venture capital and startup ecosystem. I hope you find it useful as well as being a time saver. You can check out more about me at https://archimedes.studio
In this week’s free issue there are some amazing things to highlight.
- First Round Capital – A Founder’s Field Guide
- WordPress Founder on the 5 Stages of Autonomy in Distributed Working
- Chamath Palihapitiya, Robin Klein and Fred Destin on Startups and Bailouts
- Mark Suster and Harry Stebbings – Are VCs Open for Business?
- Semil Shah, The Information and the Harvard Business Review on Venture Capital in a Pandemic
I email the newsletter each weekend. There is little or no commentary included, it is the things I found compelling or interesting.
This is the free version, and I also have a supplemental 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.
This week’s paid version is here – Venture Trends for Paid Subscribers. You will be prompted to Subscribe, please consider doing so.
Stories in the paid version this week:
- The Gillmor Gang Podcast on TechCrunch with Steve Gillmor, Frank Radice, Michael Markman, Dennis Pombriant and Keith Teare
- Long Read – The Shifting Economics of Distance
- Saastr on the Funding Environment
- China’s most prolific Venture Fund
The Founder’s Field Guide for Navigating This Crisis — Advice from Recession-Era Leaders, Investors and CEOs Currently at the Helm
It rounds up all of the recommended reads we share below, as well as our brand-new scenario planning template and list of curated job resources (both for candidates who are actively looking and companies that are still hiring).But by sharing initial thinking, talking about the challenges everyone is facing and harnessing the helpful advice floating around in private channels, we hope to help you shape — and relentlessly refine — your response as the situation on the ground continues to change quickly.
Distributed Work’s Five Levels of Autonomy
As I mentioned to Sam on the podcast, “any company that can enable their people to be fully effective in a distributed fashion, can and should do it far beyond after this current crisis has passed.”You’re probably able to access information from afar, you’ve adapted to tools like Zoom or Microsoft Teams, but everything is still synchronous, your day is full of interruptions, no real-time meetings have been canceled (yet), and there’s a lot of anxiety in management around productivity — that’s the stage where companies sometimes install surveillance software on laptops.
Chamath Palihapitiya Blasts Fed for Bailing Out Billionaires and CEOs Amid Pandemic
But as billionaire venture capitalist Chamath Palihapitiya sees it, the central bank might as well has given money directly to American people, instead of their employers, since the beginning of this crisis.The business pillar of the new stimulus plan includes details of the Fed’s Main Street Lending Program, targeting small to mid-size businesses, and market intervention measures, including plans to buy corporate bonds regardless of their investment grades.
Chamath Palihapitiya Tells CNBC Billionaires Deserve No Bailout
Former Facebook exec Chamath Palihapitiya dumbfounded a CNBC anchor on Thursday when he argued that billionaires, hedge funds, and mismanaged corporations, like airline companies, don’t deserve any federal bailout or stimulus money.“I don’t understand why does anybody deserve to get wiped out from a crisis created like this?”
Virgin Galactic chairman: Fed should give $500,000 to all Americans
Earlier on the same day, the Fed announced it plans to spend $2.3 trillion on various programs to help support the economy during the coronavirus outbreak.Chamath Palihapitiya, the CEO of investment firm Social Capital and chairman of spaceflight company Virgin Galactic, has argued that the US government and the Federal Reserve should not bail out hedge funds and billionaires during the coronavirus crisis.
READ MOREFred Destin @fdestin1/ So I find myself *violently* agreeing with @chamath. Let companies go bust. Let them go through the bankruptcy process and fly with clean balance sheets. Protect the individuals, not the stock or debt holders. Andrew Lawrence @ndrew_lawrenceI have watched the first 12 seconds of this at least 100 times, its better than porn https://t.co/j5SeLyeMyyApril 10th 202048 Retweets293 Likes
Don’t bail out the startups, says LocalGlobe’s Robin Klein
By rapidly reviewing the funds which BBB has already backed, further capital could be committed which would deliver targeted co-investment funds for startups. The other LPs of these funds could be offered similar opportunities.
READ MOREVijay Boyapati @real_vijayCapitalism is a profit *and* a loss system. Losses are just as important to the functioning of a capitalist society as profits as they help weed out companies that are poorly run or are no longer meeting consumer demands. Bail out the failures and you’ve destroyed capitalism. April 10th 2020263 Retweets949 LikesMark Suster @msusterMight be a fun headline but hardly true. We’ve already signed a new term sheet (never met in person) & potentially two more in process. 2 huge follow-on financings. OPEN, we are … https://t.co/FQdgIeTWUATechCrunch @TechCrunchIt’s “bullshit” that VCs are open for business right now (but that could change in a month) https://t.co/TsygtkDeF5 by @cookie https://t.co/4FcTdxiz1AApril 10th 202017 Retweets141 Likes
20VC: Are VCs Still “Open For Business”, How VCs Attitude To Risk Has Changed & The 2 Most Valuable Assets To Founders Today with Fred Destin, Founding Partner @ Stride VC
Prior to co-founding Stride, Fred was a General Partner @ Accel where he was the lead investor and board member at Deliveroo, Pillpack (acq.1.) How did Fred make his way into the world of venture and come to co-found one of Europe’s newest and largest seed funds in Stride.VC?
A Venture Capitalist Shares 6 Ways Startups Can Prepare for the Unexpected – Entrepreneur
Adapting to the new conditions will help you survive this crisis and build foundations that can ensure the long-term success of your business.CabinetM has assembled an interactive Social Distancing Technology Stack that is a comprehensive list of tools that can support companies with employees working from home.
Index Ventures Racks Up $2B In Fresh Funds, Appoints Nina Achadjian As New Partner – Crunchbase News
Index Ventures, the venture capital firm with dual headquarters in London and San Francisco, today announced the closing of $2 billion in new funds. The funds are dubbed ‘Index Ventures 10’ and ‘Index Growth 5’, totaling $800 million and $1.2 billion in size, respectively.
VCs Could Exhaust ‘Dry Powder’ in a Year Unless They Slow Investing
Venture capital investors are flush with cash, but they may want to slow down their spending. U.S. venture firms have roughly $150 billion of funds available to invest in cash-starved startups, a little more than half of the $279 billion they have raised since 2014.
China venture capital deal-making shows green shoots of recovery as funds hunt for bargains among coronavirus hit start-ups – Yahoo Finance
Nisa Leung, managing partner of venture capital firm Qiming, has just finished quarantining herself after travelling back to Hong Kong from the US after putting the finishing touches to a new US$1.1 billion fund to invest in Chinese start-ups.”Companies should expect more reasonable pricing and that raising capital will take them longer,” said Tony Zhang, a partner at China tech-focused investor Jeneration Capital that already has deals in an advanced state of preparation.
Venture Capital During a Pandemic – Harvard Business Review
Listen and subscribe to this podcast via Apple Podcasts | Google Podcasts | RSS Beth Ferreira, a partner at FirstMark Capital, has lived and worked through the Dotcom crash of 2000, the 9/11 terror attacks, and the financial crisis of 2008.
Silicon Valley Bank Struggles as Startups Rush for Government Loans
As the first set of entrepreneurs learned they would receive emergency loans administered through the federal Small Business Administration, many of those who had applied through Silicon Valley Bank were stuck trying to deal with glitches in the application process.
Seeking Capital? Ask Yourself These 3 Questions First
If you’re a tech executive thinking about seeking capital for a future idea, ask yourself these three questions before you begin: Partnerships aren’t just important in a mentoring capacity; finding a partner who shares your passion for your idea increases the odds of scalable success.
What Will Happen To Deal Activity and Valuations During the Corona Crisis?
Q3’20 — Distribution of Series A pre-money valuations should expand as companies adjust and investor appetite reemerges: It’s not all doom and gloom .Q2’20 — Median pre-money Series A valuations will drop from $22M in Q1 to ~$17M in Q2 and the 3rd quartile will drop from $35M in Q1 to ~$23M in Q2: If we use 2008 as a proxy, we saw an interquartile range contraction (3rd quartile — 1st quartile) between Q3’08 and Q4’08 and a quick drop in the median.
Venture Capital in the Age of COVID-19 – The National Law Review
Pay to play provisions provide for various penalties such as a conversion of preferred to common shares or loss of other rights such as anti-dilution protection, board representation, preemptive rights or approval rights, if the investor does not participate in a later financing round.Rather than being paid currently, these dividends typically accumulate and are payable on certain events, including liquidation, redemption, or conversion of the preferred common stock so that the funds remain invested in the business.
Financing in isolation – NJBIZ
Besides spurring a pullback in new investments, the disease is driving venture capital and private equity communities to change the way they do business.Added a New Jersey-based private equity managing partner, who spoke on condition of anonymity, “In-process deals are still closing, and some firms are jumping in now because of depressed valuations, but many are holding back.”
So, We’re All Working Over Video. Now What?
Because Woven is currently managing over 100 million events, Tim and his team have some interesting, front-line insights about just how videoconferencing is being used today—but also about some of the technology’s shortcomings, and how it will need to evolve to meet our needs in a post-COVID-19 world.Interesting, too, was that across the more than 100 million events entered into online calendars with Woven, the Zoom platform was the most dominant for video.
What Will Happen?
I don’t think we go back to the way were exactly, but I suspect things will be a lot more normal than people assume.I am seeing a lot of articles right now with predictions.
Crisis Coverage w/ Semil Shah – VC Fund Management in a Pandemic World
Semil Shah of Haystack joins Nick on a special Crisis Coverage installment to discuss VC Fund Management in a Pandemic World.Crisis Coverage w/ Semil Shah – VC Fund Management in a Pandemic World
Over-Managing Is Sinking Your Leadership
The only way this attitude works is if you don’t have a team that works for you, i.e. you aren’t a leader.It took me three leadership positions before I finally realized my lack of ability to ‘let it go’ was burning me out as a leader and crippling the potential of my team.
How You and Team May Feel Around May 15 or So
I don’t have any profound insights, but perhaps one way I can help a little bit is that little old team SaaStr started going into War Mode earlier.It’s probably going to get harder to lead through all this change in another 30-45 days.