Hey all,
We're hosting a panel discussion in partnership with Day One on Wednesday, July 29th @ 5 pm. Join the discussion and RSVP, more details below.
The focus will be on the future of the NYC startup ecosystem, the new challenges founders are facing today, and how we can support builders. We have a great panel lined up, including Heather Hartnett from Human Ventures, Danika Laszuk from Betaworks, and Charlie O'Donnell from Brooklyn Bridge Ventures.
Below are some thoughts I had this week in preparation for the panel
"Pre-Seed" investments - There are still no good financing options for pre-seed founders. Most of the time, the first $50k-$100k comes from "friends and family" or angel investors. That or companies are self-funded by the founders. The lack of financing options limits innovation, in my opinion. Most people - and by most, I mean the literal majority - do not have the network of angel investors readily available. Most do not have the financial freedom to quit their job or self-fund, especially in underserved communities. I believe the gig and the sharing economy will drive a historic rise in entrepreneurship, for which new financing options will arise. The capital itself is abundant, so much that the magnitude is overwhelming. The VC asset class is $130B of activity per year, yet, the private equity market is $5.4 trillion - 40x bigger. Apple alone has $100B in balance sheet cash and generates $60B in free cash flow per year. I believe the excess capital will flow into innovation at a far higher rate than it has over the past ten years.
Side-hustles will become the norm - The promise of Arthur C. Clark's 1974 Internet prediction is only just now unfolding. Driven by COVID-19, a more substantial part of the population realizes that they don't need an office to be productive. People will always crave human connection, and I love in-person work sessions. But this doesn't need to be collapsed with office culture. Commuting two hours per day back-and-forth to work and sitting at a desk, even when there's no work to be done, limits human potential. Working from home is inherently more humane. I think work from home is here to stay, and that side-hustles will boom as a result.
Non-venture scale businesses - To paraphrase Bill Gurley, "The job of venture capital is to pour gasoline on a fire. Until you get a fire burning, there's nowhere to pour gas." I find the discussion around venture-scale and non-venture-scale somewhat comical. This theoretical discussion seems to hinder innovation more than support it. If founders and investors focused on customer obsession and unit economics, and less time on forecasts and cap table discussions, I think the venture-scale change would be more likely to result. In my experience, long cap table and scale discussions are particularly stifling to starting fires.
Companies we're supporting 👷♀️
Defynance helps people refinance their student loans through Income Share Agreements (ISAs). Users go through a rating process that's similar to any standard loan application. Defynance pays off the loan balance entirely in return for an ISA. Users pay Defynance a set percentage of their income for a defined period. Programs are more flexible and accessible than traditional pay-off loans. The founder is looking to meet potential investors for a Seed round.
Panel For Builders 🎫
How will the "new normal" ecosystem for startups in NYC look? With the world going remote, will geographically-focused ecosystems be less relevant? What new challenges are founders facing, and how can we support builders in the post-COVID world?
Join the conversation on Wednesday, June 29th, at 5 pm ET on Zoom.
Featured panelists:
Heather Hartnett (Human Ventures)
Charlie O'Donnell (Brooklyn Bridge Ventures)
Dana Laszuk (Betaworks)
Hosted by:
Andrew Hutton (Day One) and myself
Have a great Sunday,
✌️Mike