This is a great video call hosted by the U.S.'s National Venture Capital Association on advice from seasoned VCs to all VCs on how to weather severe economic downturn we're currently facing. Based on prior experiences, including how China VCs reacted to COVID 3 months earlier, and how top-tier US VC's weathered the Global financial crisis in 2010 and the dot-com bust in 2000.
Source: https://nvca-org.sharefile.com/share/view/s99f9bccb4774c3db?skipNativeCheck=true
Speakers:
- Bobby Franklin(National Venture Capital Association)
- Barry Eggers (Lightspeed Venture Partners)
- Elizabeth "Beezer" Clarkson (Sapphire Ventures, LLC)
- Terry McGuire (Polaris Partners)
- Steve Hyndman (GGV Capital)
Panel comments and speaking points:
For startups:
- Startups should continue to focus what they're best at
- Retain and support your best talent
- Look towards China's startups and how they're fairing in rebound
- Biggest challenge is uncertainty - how long this will take
- Fundraising will take longer, VCs will take their time, valuations will be adjusted. We've gone down 30% in public markets, we ought to go down the same in private.
- Company survival obviously much more important than valuation/dilution
- How do you invest in folks you never met in person? That happens with angels/seed funds, what about series a, later? LPs into VCs?
- This is why rounds will be delayed
- Lets make zoom fun (happy hours, trivia, etc)
- B2B will slow, so are there services/pricinng you can give out free now and try then to lock those cusotmers in and upsell when things better again
- Top down enterprise sale won't work over next several months, but bottom up self-serve will
For VCs:
- Track with detail how long a portfolio's runway is, what current mo burn is, highlight red/green/yellow
- Talk to each CEO one-on-one
- Plan for the worst case scenario (freezing hiring, making cuts, cutting none human-related expenses)
- This is a really hard time to be a CEO, so as a VC, touch base with our CEOs often
- Look towards China's startups and how they're fairing in rebound
- Biggest challenge is uncertainty - how long this will take
- Lets make zoom fun (happy hours, trivia, etc)
- Shouldn't expect to see any LPs missing capital calls, especially as capital called will slow, but if this is really bad, their could be a trickle effect there
- This is a really good year to start a fund, like 2008-10 vintages, and 2002 before that
- As an LP, would love more frequent check-ins from GPs in these times
- So separate from newsletter. Maybe a separate mid-month COVID update, also remind ppl of capital calls or changes (since they have to manage cash)