Opportunities for VCs to address racial inequity
As 2021 begins, it’s difficult not to acknowledge the precarious state of American society: the Covid-19 pandemic continues to grip our country, high unemployment signals underlying challenges to the economy, and our nation remains bitterly divided following a closely contested presidential election. Amidst this backdrop, we continue to grapple with many cultural issues reignited last year, most notably racial equality.
As Alex Nwaka and I wrote in the spring, Touchdown’s team believes that racism and human rights’ abuses are antithetical to our values, as individuals and as a firm. To that end, our entire company has committed to contributing responsibly to do our part to end racial inequality in America through long-term, sustained action. …
How to assess syndicate partners
As I’ve previously written, entrepreneurship and venture capital can be more challenging during a downturn, but startups that make it through can emerge in a position of strength. While investment capital typically becomes tighter during a recession, startups generally have less competition. As a result, more enduring companies may potentially be founded at times like these according to research from the Kauffman Foundation. It remains to be seen how the current recession will play out in the venture capital ecosystem.
While a recessionary period often brings stress between founders and investors, one of the most challenging aspects of managing through a downturn can be the relationships between venture capitalists and their fellow investors, known as “syndicate partners” in the industry. …
Racial Equality & Human Rights
During the past few weeks, we have been reaching out to our friends in the black community to listen, engage, and understand how to start the process of being supportive.
Although we concede that we are not experts on racial equality, we do not believe there is a middle ground on this issue. Racism and human rights abuses are wrong, and we do not think it requires courage to say so. Our challenge is what to do next, so that these are not empty words, but the beginning of sustained action that leads to a more inclusive future.
Seeing our country so divided has made us sad, angry, jaded, and ultimately, motivated to do something constructive. Overwhelmed by the severity and enormity of this problem, we are drawing on some of our company’s core values…
They organize innovation efforts
C-suite executives often struggle to make sense out of the variety of innovation options at their disposal. Should the corporation build internally, launch an incubator, partner with an accelerator, start a venture fund, expand an M&A program, or engage in more than one of these activities? The choices can appear complex and overwhelming, even when reduced to basic options like “build, buy, partner, or invest.”
Among these paths, the greatest confusion can come from how to manage external innovation options. For the most part, this means learning how to work with startups. …
Defend your existing responsibilities, then prepare to go on offense to acquire new assets
The recent collapse of the stock market would indicate that we are entering a down economy. Economic complications from the global coronavirus pandemic are already impacting diverse industries like hospitality, construction, entertainment, retail, food service, and many others. In addition, many venture capitalists — including those at Sequoia — are attempting to prepare their portfolio companies for a new reality while claiming credit publicly for detecting a change in the wind.
This is my fourth “down cycle” in the innovation economy. I began my career as a venture capitalist during the recession of the early 1990s, and have managed as a venture capitalist, entrepreneur, and innovation professional through the downturns of the dot-com bubble collapse of the early 2000s and the housing crisis in the latter part of the same decade. …
In a recession, corporations can be even more valuable to startups
Corporate investors have the potential to be among the most valuable participants on a startup’s cap table. In the current COVID-19 environment where traditional fund raising cycles may be extended, a corporate investment that includes more than just cash can be critical. This is because a good strategic investment relationship frequently includes a commercial transaction, or “business development” deal. These relationships have the potential to be just as impactful as cash investments and can help startups survive an economic downturn.
In my role as a corporate investor, I’m often asked what options are available for startups and corporations to work together. …
A Step-By-Step Guide To Help Make Board Meetings More Effective For Venture-Backed Companies
I’ve lost track of how many board meetings I’ve attended so far in my venture capital career, but I’d estimate it’s somewhere between 500 and 1,000. It’s certainly enough to have formed an impression of what makes effective regular interactions between entrepreneurial management teams and those who are responsible for startup governance.
Board meetings of venture-backed companies vary widely depending on the personalities of everyone involved. Some are formal and disciplined; others are casual and free-wheeling. Some meetings are conducted in an hour, while others may last half a day and feature extensive reports from a variety of operating executives.
In my experience, productive board meetings have a high ratio of “facts per minute” — in other words, these meetings focus on objective data to support analysis and decision making, instead of anecdote and story telling. Narrative skill might be how entrepreneurs capture attention from investors initially; but at a certain point, the emphasis should shift to realistic assessments so that the board can help management navigate challenges, capitalize on opportunity, and thrive. …
An interview with Geoffrey Moore, the “Zone to Win” & “Crossing the Chasm” author
Geoffrey Moore is a world-renowned author, speaker, and advisor who splits his consulting time between venture capital startups and established high-tech enterprises, like Salesforce, Microsoft, Autodesk, and Google. His first book, Crossing the Chasm, focuses on the challenges startup companies face transitioning from early adopters to mainstream customers. I spoke with Geoff to discuss his latest book, Zone to Win, which addresses the challenges large enterprises face when embracing disruptive innovations, exploring how corporations can make offensive and defensive transformations. …
My go-to Super Bowl snack
This buttery dish is perfect with Ritz crackers.
Ingredients
- 3 cans minced clams
- 2 teaspoons lemon juice
- 1 yellow or Vidalia onion
- 1 clove of garlic
- 1/2 green bell pepper
- 1 stick of butter
- 1 teaspoon parsley
- 1 teaspoon oregano
- Dash of pepper
- 1/2 cup of bread crumbs
- Grated Parmesan cheese
Directions
- Drain 2/3 of the juice from the clams and simmer the clams with the remaining juice and the lemon juice for 15 minutes
- While simmering the clams, chop the onion, garlic, and pepper (chop the pepper finely)
- Add the remaining ingredients except the bread crumbs and cheese, and continue to simmer for another 10–15 minutes or until the butter is completely melted and the onions are…
I used to think that company values were a “mom and apple pie” exercise that provided limited value to startups, but I’ve changed my mind in the half decade since we started Touchdown.
When we formed the company, my co-founders Rich and David suggested we write down our values — rather than protest, I decided to go along. In truth, I enjoyed the process of generating the values and it was fairly easy for the three of us to agree on what mattered. I was nevertheless skeptical that we would get ongoing business value from the exercise.
Along the way, I learned about how companies usually establish their values. A typical process involves a small handful of concepts that can be easily remembered by everyone in the company. Just as local phone numbers were set at seven digits because seven items is the unaided recall limit for the average person, most corporations have no more than five to seven values, with an expectation that rank and file employees might see the CEO walking down the hall and be able to recite the entire list on the spot. …
