@schlaf @GundersonLaw 1) Not sure where that stat comes from. Having signed term sheets for A Rounds in NYC the day before 9/11, there was not a minute of lag time there. Slight delay in 2008. Slight delay in March 00. There's often a pause to recalibrate
@schlaf @GundersonLaw 2) we are seeing founders dig in on terms in some instances and we'll see how that plays out. Elsewhere, we're also seeing lots of inside-led rounds, whether convertible notes, SAFEs or straight equity
@schlaf @GundersonLaw 3) if the past is prologue, many funds will do sweeps of their portfolios to determine which portfolio companies Coronavirus will hurt, leave unimpacted, and which will thrive from it (i.e., Zoom). They will then make funding decisions along those lines.
@schlaf @GundersonLaw 4) Sequoia was very early in telling startups to cut burn (this time). Other funds have been sending CEO letters. Some saying don't haggle on terms - and I do not think those funds are "selling self-interest," i think they mean it
@schlaf @GundersonLaw 5) I've been on numerous board calls this week (some emergency bd calls), where people discuss contingency planning, how the companies will be impacted if/when they have team members come down with Coronavirus. Funds with
@schlaf @GundersonLaw 6) operations on the ground in China & portfolio companies there, will benefit from the experience there. Our experience will be pretty different here, because our national response has been different. My friend @shanghaipeggy (US/China citizen) wrote insightfully about that
@schlaf @GundersonLaw @shanghaipeggy 7) but we can very much learn from what they just went through. Now is not the time to over-optimize for terms, but to think clearly about those things that are most important to ensure that you don't run dry of $$ & that you can raise the next round. We won't know yet whether
@schlaf @GundersonLaw @shanghaipeggy 8) this is going to be a short, sharp shock or a deep trough. A ton of $$ has been raised (which makes it very different than 2008's VC market), but remember that we had a massive VC funding overhang in 2000. One difference now, is
@schlaf @GundersonLaw @shanghaipeggy 9) post-Sarbanes-Oxley, with startups doing far-later stage IPOs, we have a massive class of growth investors who have invested based on momentum (often, but not always, supported by metrics). Some of those companies will take hits & so too, some of those funds. Either way, this
@schlaf @GundersonLaw @shanghaipeggy 10) is a time to take fundraising very seriously & to optimize for stability & terms that will enable the company to move forward. Value erosion does not look like 2008 or 9/11, but there'll be a bit of musical chairs & I'd recommend taking a sit while the music's still playing!
