Recapping Navigating Choppy Waters: The VC Perspective
On July 14, Bolster had over 300 people attend our webinar, Navigating Choppy Waters: The VC Perspective.
Fred Wilson of Union Square Ventures, Martina Lauchengco of Costanoa Ventures, Brad Feld of Foundry, and Heather Hiles of Black Ops Ventures shared their insights, perspectives, and the strategies they’re using to guide their portfolio companies through uncertain times.
With the current economic climate at the forefront of many of our minds, this was a timely event!
Did you miss the panel? Not to worry—the recording is still available here for free, and it’s only :30 long!
Bolster Co-founder and CEO Matt Blumberg introduced the panel and the series, which is, in his words, “designed to help founders and CEOs think about the macroenvironment we’re in—and what to do with it.”
The next event in the series will take place on Thursday, August 25th at 1:00PM ET. CEOs Dave Morgan, Kelsey Recht, Rob Reid, and Wendy Lea will share their own insider points of view about what it looks like to lead a company through turbulent times.
Join us for Navigating Choppy Waters: The CEO Perspective!
There were quite a few valuable takeaways from this first event—and we’re sharing them with you!
In times like these, it’s more important than ever to think practically about your circumstances. Martina Lauchengco said she finds herself giving the same advice nearly every day, advising founders to “be very pragmatic and realistic about what you have in front of you.”
Make sure you can back your plans with funding. While VCs are still writing checks—Fred Wilson emphasized this—raising money looks different now than it did a year ago. It’s a good idea to have a financial runway that leads you through at least a year, if not longer. Several times the panel mentioned the importance of carefully choosing when and where to allocate resources to maximize your efforts.
Some founders are already operating this way.
Heather Hiles shared that “our Black founders are so much more aware of the deals that have been working for other folks, that they’ve had to work maybe two, three times harder to get an opportunity to pitch for anyways. They’re used to being resilient and more successful with far less in terms of capital… And so [at Black Ops Ventures] we are seeing people who are already pretty realistic and in this for the super long term.”
Stay pragmatic, but also optimistic. This economic environment is a grind—but often, that’s what it takes to build a business where one didn’t exist before.
Be prepared to change your plans when you get new information—or when the market changes.
In 2001 and 2002, when the dotcom bubble burst, Fred Wilson said companies were shut down or ran into problems when founders “didn’t believe they needed to massively reduce their cost structure in order to survive, and ultimately they hit the wall, were not able to raise money.”
Now, we have a chance to learn from past events. Brad Feld remembered similar circumstances from those years. Many unsuccessful companies had founders who “didn’t deal with reality… Whether it was that they didn’t cut their spending, or they had aspirations that capital would be easy to raise, or they didn’t focus on the key things they needed to focus on.”
Sticking to a plan made in entirely different circumstances than the ones you’re executing under is risky. At the moment, it’s hard to predict what things will look like even a few months from now. Staying flexible is key to success when the environment is constantly changing.
Make Deliberate Decisions and Move Forward
In times like these, Brad Feld said, cliches get amplified. He warns founders against putting too much stock in them or basing decisions on them. He says he encourages founders to consider the cliches—after all, they get repeated for a reason—but to “think deeply about your specific situation based on the stage of the company, the decisions you’ve made historically, the funding resources you have, the market dynamics you’re in. Then, be very deliberate about the decisions you make.”
Looking around to see how others are handling the current economic climate isn’t a bad idea—it can be helpful to gain perspective—but no one else is in your exact situation. Your decisions should be based on what’s best for your company and its growth.
The Black Ops Ventures portfolio is made up of first time founders, Heather Hiles said. They’re in an important growth stage. “It’s about making sure they’re not stopping their growth and going after the markets that we’ve invested in them to go after, but at the same time, being prepared for long term success.”
Panelists agreed, companies should continue growing and looking ahead, prioritizing thoughtful, data-based decision making.
Focus and Maximize Value
Martina Lauchengco advised that not all target segments are equal in the value they bring to your business. “Do the work to investigate which of those segments will reap the most reward for the effort you put in,” she said. “Taking that time to understand and focus on those markets is worth doing right now.”
She mentioned that Hubspot offers a great example of focusing on value. The company was started in 2006, and experienced tremendous growth between 2008 and 2009, a time when others were struggling. “They focused so much on the value they were providing, even to non-customers,” she said. A clear value proposition—through content, product, or free support—can speak for itself.
If your team is focusing on the areas where you can truly provide value (or gain value from your customers), chances are, you’re less likely to be spread thin. “Figure out what the main thing is that your company is doing, and really focus on that right now,” Fred Wilson advised. “Try to be as lean as you possibly can at this moment, only resourcing the things you must do.”
Now is not the time to focus on items in the periphery. Pour your resources into the things that matter and will most effectively grow your business.
The session ended with Matt asking what the speakers are looking for in potential investments right now, and whether they have advice for founders who must raise money in this environment.
They unanimously agreed that realism, transparency, and an understanding of the current market were all vital.
Martina Lauchengco: “Pragmatism, realism, and a very clear notion of how what you do is different and why it provides disproportionate value to your market in today’s arena.”
Fred Wilson: “You need to be very clear that you’ve taken any actions that need to be taken… you’re raising capital to grow the business for the next couple years, you understand that market price may be different from the market price last time, and you’re going to take the best deal that comes your way.”
Heather Hiles: “For all founders… if you can articulate your awareness of all of the unknowables and all the possibilities of what’s going to happen over the next couple of years, I think investors are listening for that.”
Brad Feld: “I’m looking to see no bullsh*t. Just deal with reality, tell me what’s going on.”
Keep up with the speakers:
- Fred Wilson: LinkedIn, Twitter
- Martina Lauchengco: LinkedIn, Twitter
- Brad Feld: LinkedIn, Twitter
- Heather Hiles: LinkedIn, Twitter
Want to hear more? Next up, experienced CEOs will share the strategies they use to lead through turbulent times. This panel of experts can share answers to the questions that are rising for many leaders.
- Dave Morgan - CEO Simulmedia and past CEO of TACODA and Real Media
- Kelsey Recht - past CEO of VenueBook
- Rob Reid - past CEO of Sage Intacct and Concur
- Wendy Lea - CEO of Energize Colorado, past CEO of Cintrifuse and Get Satisfaction
Join us on Thursday, August 25th at 1:00PM ET for Navigating Choppy Waters: The CEO Perspective.