Some notes on Negotiations

1/ When you finish any complex deal you will feel fatigued and worn out. It sometimes feels hard to celebrate. The best deals feel this way. Complex negotiations require compromises. When both (or all) parties make concessions nobody feels great. Everybody felt like they gave more than they wanted. And all wish the other party would have folded easier. That’s the definition of a good negotiation 2/ In the final phases of a negotiation you need to fight to keep emotions high and not ascribe the worst views of the other parties. They’re doing their best to get the outcomes they believe are important to them. You will have to work with them (if not at this company, the world is small). Try not to lose your temper. You will regret it later. You can’t unsay anything you said in the heat of the moment.

I know people are hungry for on-the-ground information of what’s happening in LA. So just to offer you one perspective … 🧵 2/ you probably saw news that Palisades fire was spreading north & east last night. Near Pacific Palisades it seemed worst was behind us. Then you drive just 10 minutes east to Brentwood as I did last night for dinner. And it was dropping ash as though it was snowing

1/ Update on what I know about SVB situation. New info on industry call with new CEO last night.

Their main message, "we are open for business, your deposits are fully FDIC insured & safe"

They understand you will have cash in multiple banks, they would like to be one of them 2/ CEO told us they will honor existing debt (i.e. you don't have to pay back on accelerated rates) and they will honor uncalled debt lines. They are underwriting new debt lines.

His main message, "we are open for business" and want to serve the tech industry

1/ What next at SVB? Nobody knows but here's what I suspect:
- Reports that they can't raise equity, looking for a buyer of the business
- Trading halted on their shares
- We suspect they will find a buyer that will emerge today or over the weekend

What if not? 2/ You can look back to WaMu in 2008 for last example of a bank run
- Fed stepped in
- Forced a sale to JPM
- JPM took over deposits

SVB is a great bank with great customers. Clearly others had their eyes on it
en.wikipedia.org/wiki/Washingto…

1/ More in the VC community need to speak out publicly to quell the panic about @SVB_Financial ... I believe their CEO when he says they are solvent and not in violation of any banking ratios & goal was to raise & strengthen balance sheet 2/ They announced that they are selling long-term investments at a loss and investing in higher-yield investments that improve their financial metrics. They are raising $2.25bn to stabilize their balance sheet. But they say they are not insolvent & I take at face value

1/ Starting a company is hard. It's way more stressful & lonely than most admit. Industry has been a cheerleader for years. But failures will go up exponentially now. I urge temperance in your urge to dunk on founders or funders who struggle. Humiliation + depression is dangerous 2/ I personally backed a founder (as an angel) a decade ago who took his own life when his startup failed.

I have reflected on this for years. I'll never know the full story but always thought humiliation of impending failure played a role

Today @upfrontvc officially opened its Santa Monica offices after 14 months. I can't tell you how thrilled I am to begin to collaborate in person with colleagues, portfolio companies, startup entrepreneurs - in person. 2/ I will outline what @upfrontvc is doing in our office re-opening, not to say "we have all the answers" but just to put out thoughts for others planning or considering. Here goes ...

1/ I had "strategic" investors at my first startup. I learned first hand what a bad idea this can be, even when they're good people. A thread ... 2/ I use quotes for "strategic" because it's really an oxymoron. Most industry investors are the opposite of strategic. They have vested interests and sadly this plays out on their board and investor participation

1/ A thread on "founder types" & how to hire those who complement you

There are no "exact types" of founders but to simplify:
A framework I think most founders broadly fall into:
1. Product centric
2. Tech centric
3. Customer centric

It helps to figure out which you have / are 2/ Many tech companies are "product centric"
- They understand how customers use today's products & where the gaps exist in the market.
- Know how to get tech built by high quality engineers
- Often win through 10x better products
- But often don't truly understand the customer

1/ Trevor Noah addresses racism against Asian Americans. It's so hard to find the right words to convey but his wisdom sums up my feelings better than even I could articulate. If you haven't seen this please dedicate just four minutes.

We must speak out & speak up

https://twitter.com/TheDailyShow/status/1372368730093670400

2/ I feel so much empathy for Asian Americans facing hostility and racism in America. We can't create a culture that tolerates this.

You can't stop crazy people, but we as a society can lash out against public figures who think it's acceptable to vilify Asians in any way

1/ I saw some of my colleagues argue that the press & some on Twitter overreacted to the events of yesterday. That's seriously misguided. The President of the United States wanted to illegally remain in power & certainly would have if Congress would have allowed him. 2/ There were enough GOP congresspeople immoral enough to go alone with the President's ruse. They knew he lost the election in a landslide but for political reasons said the opposite. This is seriously dangerous

1/ Just realized this morning that it was 5 years ago today that I invested in @densityio ... it has truly been such a great career experience for me. Some notes ... 2/ Density is a privacy-first way to monitor how people or objects move around spaces. Today mostly office spaces. Plus warehouses, schools, retail outlets, government buildings

1/ I have read many times over the years. It serves as a powerful reminder: Leaders who have the courage to use peaceful, symbolic protests to raise awareness of oppression are often discriminated against in their times but "history has its eyes on them"
filmsforaction.org/articles/the-w… 2/ This article is a great reminder of the courage & conviction of two African American athletes who raised awareness of oppression at their expense of their own continued fame, achievement and financial benefit

1/ We know that Covid-19 has been devastating to some industries: air travel, hotels, live events, physical retail, oil. We know it has benefitted others: supermarkets, collaborative tools, restaurant delivery, athleisurewear. There are some other "future positives" ... 2/ Acceptance of technologies we know will benefit society are accelerating post Covid-19. some examples: Telemedicine an obvious benefit for doctors & patients. Rules, regs & habits being transformed

1/ Important PPP Update. The government has just clarified its position with respect to the PPP program today in ways that affect VC-backed startups. I will give you my view on important change, but it is here if you'd like to read: home.treasury.gov/system/files/1… 2/ Previously I believed the goal of the PPP was to "Protect Paychecks" (read: jobs) at small businesses and I believed the government's goal was to avoid unnecessary increases to unemployment. Today's guidance changes my views in one important way ...

For VC-backed startups, the PPP Loan program is still a minefield. Rumors that Mnuchin was going to fix the Affiliate Rule didn't materialize. @nvca published a list of the problem areas. 2/ There are rumors that the PPP Loan program may still fix the Affiliate Rule next week. Until fixed, it's nearly impossible for most VC-backed startups to apply because it would require huge legal lift to amend all of the charters of these companies to change control provisions

1/ We can announce officially today that @BirdRide has raised $275 million. Upfront wrote a large check into this. As the article validates - it was all about "unit economics," which have performed very well.
theverge.com/2019/10/3/2089… @BirdRide 2/ Where ride sharing companies must pay a driver, scooter companies have the economics of autonomous vehicles today. The person enjoying the ride is the same person driving

1/ In preparing to speak at a CEO Summit on the topic of boards, I sat down to think about first principles of what makes a good or bad board and how the CEO can best manage this. Below is my first pass ... 2/ Many teams view boards as an administrative body that comes together four times a year to be "updated." Call this the "waterfall board." Like anything in life, you'll get out of your board what you put into it

1/ Say “no” with humility and empathy. It’s the hardest thing somebody raising capital with existential fears ever has to hear 2/ On saying “no” as a VC with grace. Step 1 – do it by phone. If somebody took the time to meet with you and if they’ve asked for feedback you owe it to them to give them verbal feedback.

How to write an effective email to people who receive a tons of emails (in 12 easy steps) ... 1. Make the subject line short, compelling & specific

1/ Of course “ghosting” is such a loaded term it elicits this kind of angsty response. I have suggestions in stead of vitriol

https://twitter.com/jasonlk/status/1109505163847294976

2/ Start by assuming the person you want a response from is a good person. While not always true, odds say this is probably true. So we need to understand why he / she isn’t as responsive as you’d like