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Bonus - Coronavirus: Feat. Robert Gelb (HeySummit) - How early stage investors are thinking about the current landscape?

Bonus - Coronavirus: Feat. Robert Gelb (HeySummit) - How early stage investors are thinking about the current landscape?

FromThe Consumer VC: Venture Capital I B2C Startups I Commerce | Early-Stage Investing I Brands


Bonus - Coronavirus: Feat. Robert Gelb (HeySummit) - How early stage investors are thinking about the current landscape?

FromThe Consumer VC: Venture Capital I B2C Startups I Commerce | Early-Stage Investing I Brands

ratings:
Length:
30 minutes
Released:
Mar 20, 2020
Format:
Podcast episode

Description

I reached out to all past investors that came on the show and future investors that will be coming on and asked them the following questions pertaining to the impact of corona:* Are you shifting strategy away/towards companies/verticals?No. We're long term, early stage investors so we look at companies with a 5-10+ year time horizon. While we take the health, economic, and societal impacts of COVID-19 very seriously, especially in the next few months and quarters, our expectation is that over the long run the broad societal and economic impact will be modest.I wouldn’t say we’re changing our strategy [yet?]. One thing we have been developing a thesis on, even prior to coronavirus, is curation in the consumer environment given how fragmented the various sectors have become with abundance of brand choices. That being said, we’re looking for opportunities that de-risk the exposure to a particular brand, but opportunities to play a broader category based on consumer preferences and behaviors. We continue to look for disruptors in the market that change age-old behaviors, come up with a better mousetrap, are vertically integrated creating strong supply chains or have a lifestyle component (among other attributes). We love businesses that touch 2 of 3 categories – DTC, B2B, retail/wholesale.Not really. As seed investors, we take a long-term approach. And while there will be some behavioral shifts that come from this, at some point I believe we’ll get pretty close to ‘normal’. That being said, we are leaning more into companies that are ‘building’ v ‘selling’ immediately.* Are you pausing investments in a particular space?No. We're long term, early stage investors so we look at companies with a 5-10+ year time horizon.We have some exposure to the travel industry. We do believe that this industry will be the last to recover, much like after 9/11, so we’re monitoring it closely and will probably sit on the sidelines in the near-term for this sector. If there was a business that showed some resiliency and was at an attractive value, we’d certainly look at it. Depending on the slowdown and how long things play out, discretionary purchases are likely to decrease so we like to be positioned with necessity purchases.* Are you concerned about some current portfolio companies' ability to raise?Yes to some extent. We haven't seen early-mid stage investors change their activity levels at this juncture, but obviously the concerns and work environment (more remote, less F2F) mean we'd anticipate some slowdown or lengthened deal processes. Early-mid stage investors may also look to allocate incremental capital to existing investments rather than new investments in this environment. For late stage companies that may be raising from "cross-over" type investors, we anticipate the decline and volatility of public market portfolios may reduce some investors appetite for late stage private companies.Yes. I think all startups will have a difficult time later this year raising. Not right now, but my prediction is to give the market another 2-4 months. My advice here would be to raise some money now if you know you need to be in the fundraising market in the next year.* Are you having to adjust to new work protocols (remote working, etc) and if so, is that having an impact?We already had a flexible work culture – not a huge hurdle for usSo far, so good. Some great tools out there, and many companies are moving fully or partially distributed/remote anyways, so it’s good to eat our own dogfood.
Released:
Mar 20, 2020
Format:
Podcast episode

Titles in the series (100)

The Consumer VC takes a look into early-stage consumer investing and venture capital. If you are interested in learning about consumer trends, have a b2c business and interested in learning about the fundraising process at the early stage, you have come to the right place.Mike interviews some of the top venture capitalists in the world that focus on B2C and consumer type companies or have a deep track record investing in these categories such as marketplaces, SaaS, social, CPG and non-tech subscription.Mike also interviews founders that are building some of the most disruptive consumer facing companies in the world. The conversation usually includes the insight the founder discovered, fundraising strategy, and the pitch.This podcast also includes bonus episodes. Each bonus episode dives into a particular subject that might not have to due with the fundraise or venture capital, but still would be helpful to founders. For example, a bonus episode on brand strategy or how to construct a board of directors. All bonus episodes will be clearly labeled.For all episodes, please visit www.theconsumervc.com. For updates, you can follow @mikegelb on Twitter.