INSUBCONTINENT EXCLUSIVE:
Billions of dollars have flowed into startup investing this decade, but the era appears to be closing with the coronavirus pandemic
Limited partners are saying no to younger venture firms who are still out raising, while cutting back on weaker existing firms in their
portfolios, Connie Loizos reports on TechCrunch this week.
Other firms with direct ties to public markets are losing even more access to
Connie thinks we will soon see term sheets getting pulled using force majure clauses (and in fact we&ve been hearing a few rumors)
In another sign of pressure in the funding ecosystem, Danny Crichton hears that some investors are preparing for layoffs at their own
firms.
With the pandemic impact just starting to be felt across global economies, everyone is bracing for hard times
So, if you&re a startup with fresh funding in the bank, Danny suggests that now is an especially good time to make a funding announcement
that stands out.
Over on Extra Crunch, we&ve been going deeper on what startups and investors are facing and how they can adapt
&I expected 20-30% declines in valuation, but I would up that today to 50-60% in the earliest stages based on feedback I have heard,& Danny
details in his latest update on pandemic fundraising trends.
Alex Wilhelm interviewed a growth-stage investor who thinks that Q4 may be the
earliest that bigger startups will be able to do raises — and probably not from new investors right away
Everyone is trying to support existing portfolios too.
But what is really changing, when you look at the time scales of startups? Here an
even-keeled view from long-time VC Mike Volpi, in an interview with Connie this week:
[The business of venture is a very long-term one
For the average holding period we have within our portfolio companies is probably eight years
If you think about an investment that we made even, let say, last year, it going to look really different seven years from now
So these moments of fluctuation for us as VCs shouldn''t impact our thinking too much
You have to be thoughtful about how to manage through them
But from an investment perspective, we shouldn''t really let it get too much in in the scope of how we think about it.
Image Credits: Bryce
Durbin / TechCrunch
The great unicorn stall?
Alex had been writing a popular series on companies on their way to IPO
Now the window on hundreds of unicorns appears to have closed for months if not longer
&Procore and Accolade, for instance,have filed publiclyto debutbut have yet to price and pull the trigger on their offering,& he writes on
&Asana and DoorDash and Postmates have all filedprivately to go public, but given the insane repricing of their comps on the public markets,
no public filings appear to be in the offing.& He then breaks out Airbnb particular situation as a travel unicorn in a time of frozen
borders.
Y Combinator first remote-first demo day
While the entire event was online, we covered it as usual in a series of articles
breaking out the entire class by categories:
Healthcare, Biotech, Fintech and Nonprofits
Hardware, Robots, AI and Developer Tools
Consumer
Companies
B2B Companies
While the storied seed-stage venture firm has emphasized physical location to help its founders connect and learn,
it is now considering making the next class fully remote.
You can find our casual take on the companies in this wrap-up call
We put together our list of 20 favorites, including reasons why, for Extra Crunch
Subscribers can also listen to Natasha Mascarenhas& Equity interview with CEO Michael Seibel.
Image via Getty Images / Colin Anderson
Productions pty ltd
Where top VCs are investing in remote events
Suddenly everybody needs to come up with new solutions to remote events
But what does that even look like? Arman Tabatabai surveyed five investors with bets in the space for Extra Crunch on what they think will
Respondents include:
Sarah Cannon,Index Ventures
Connie Chan,Andreessen Horowitz
Andrei Brasoveanu,Accel
Ryan Kuder,Techstars Anywhere
Paul
Murphy,Northzone
TechCrunch can help you stay connected
I swear the whole newsletter was not just building up to this moment, but we are
also working out our plans for Disrupt and other conferences this year
For starters, we&ll have a discounted pass for the livestream and recorded videos of the main stage
More details here!
We&re also experimenting with lighter-weight ways for startup people to stay in the loop from anywhere through Extra
Danny kicked off a weekly conference call with investors and other specialists
Check out the recording from this week with Niko Bonatsos of General Catalyst; stay tuned next Tuesday for a live call with resident
immigration law columnist Sophie Alcorn.
Across the week
TechCrunch
Wondering if venture capital is open for business? A new initiative has
investors saying yesStartups rethink what it means to be high-touch during a pandemicBeware of ‘ZoomBombing:& screensharing filth to video
callsPSA: Yes you can join a Zoom meeting in the browser
Extra Crunch
Dear Sophie: How do I get visas for my team to work from home?Manage
remote teams with a transparent cultureFounders who share insights can build industry trust at scaleCan Apple keep the AR industry
alive?
#EquityPod
From Alex:
This week episode was a testament to making do, as we&ve had to cancel some trips, juggle a few guests, and get
up and running as a podcast that have guests dial in without losing our stride
So, this week Danny and Natasha and Alex were joined by Unshackled VC Manan Mehta
And it went pretty ok, aside from a hiccup or two, expect Equity to still feature guests as often as it makes sense, even if we&re currently
locked out of our own studio….
Listen to the rest here.
