Good morning, everyone, im scott mcgrew. Back when there used to be conferences occasionally i would be invited to speak at one about how Silicon Valley holds on to its power as Silicon Valley oftentypes by Silicon Valley people who want to build their own Silicon Valley in their own locations. It is difficult to replicate. You can have the people, have the buildings, but what you likely dont have a a lot of access to Venture Capital. 90 of the Venture Capital firms are here in northern california, most in menlo park on sand hill road. The personal relationships developed with Venture Capital are one of the things that fuel the success of Silicon Valley. Doing it in a far flung location is much more difficult, except the virus may be changing that. Later in the show, i will be talking with connie chan of andreason horowitz who says she has no problems doing deals over zoom. Right now i want to speak with amy of anthem Venture Capital, who has been doing just fine doing vc in new york city. What do you think my premises, Silicon Valley dominates because Venture Capital is about personal relationships and most of Venture Capital is here, not elsewhere. I understand the premise. It is one i have heard for a very long time. As a founder of a Venture Capital firm that has been rolling ten years now. We started our company in london, the next day i moved to new york, and my partner moved to switzerland. We dont have an outpost in the valley yet we are deploying capital and finding amazing entrepreneurs. Eye hopeful that the distributed nurk that we are sort of being forced into by this virus is going to bode really well for more people of different backgrounds and different personalities and different experiences and different cultures being funded. And i think thats going to be a direct result of our situation. I think you can say it out loud, a Old Boys Network that seems to dominate still in Silicon Valley when you have that ability, right, to broaden out, you can broaden out in people as well. Yeah, well, look, lets think about where the idea and moniker of Silicon Valley started. It was innovative chip makers in the 70s that started not with money but with good ideas. The money came later. So much money came later. And yes there is an absolute boys club in this community of Silicon Valley. The reality is, its an office park 45 minutes outside of the city thats channelling 15 billion worth of capital to a small number of companies in a similar network. And you cannot expect to diversify the types of founders, the type of companies, and the type of businesses we build when Everybody Knows each other, everybody looks the same, and everybody thinks the same way. And for us, you know, we have always been considered valley outsiders. It is not only help us when it comes the finding Great Companies nobody else is looking at but also it helps us stay out of that sort of bubble of thinking, right, that group think when you are kind of not in the conversation on a regular basis you can have your own idea and use those ideas to develop thesis and idea generation around companies that hopefully look very different than what our current Tech Community looks like. When you say you are not in Silicon Valley, thats a deliberate decision on your part . Absolutely it was deliberate. It was by design. We found over the years that we have been able to be smarter about where to deploy our capital and how to deploy our capital when we dont feel like we are in this sort of fear of missing out moment that happens in the valley. It also helps us deploy capital across a much more diverse network. Part of that is because the dna of anthem is we are 55 female, 65 of our Investor Team are women. We come from 14 different countries. We speak 13 different languages. We have a ton of different experiences inside of our team. So our network is very different than the networks of those who are living and breathing sort of inside of sand hill road. And when we would travel or make a contact with an entrepreneur to consider funding them, what we found was they were wide open to having the conversation because some of the folks in sand hill road, as you well know sometimes dont even leave sand hill road to go to San Francisco for a meeting. Right . And we are willing to fly in the old world from london to come and meet with you. You are going to spend an overwhelmingly more amount of time with us. In the enthats going to allow us to get to know you better. Certainly we have new ideas and changes coming in the new virtual way. I think people are going to be looking to get to know one another and meet up. But i do think that this is going to allow for significantly more capital to be deployed outside of the valley. Outside of new york as well. You mentioned switzerland. The kansas citys, and the madison, wisconsins, and the denver, colorados, those have been underserved by Venture Capital. As both you and sand hill road figures out you know, we can do a lot of this remote. And there are great entrepreneurs Building Companies in places other than big city centers. A lot of the sectors that we are excited about watching growth, a full rebuild of the Financial Services sector. Sectors where women dominate, health care and education sectors. There might be a massive opportunity for new ideas to be generated in these communities that dont rely on major city centers and the let people know that we actually can build new companies, right, that just because you werent an entrepreneur before because you didnt think you were in the right space or the right, you know, network, doesnt mean that you dont have an opportunity now to build a really Great Company and that there are tons of Venture Capitalists out there who will be willing to back you. And in the new world we can get to know each other in different ways. The other strength of Silicon Valley is this is where much of the talent was even if it was too expensive, even if it was a difficult place to live this is where you found a lot of the talent. Again you have got Companies Like twitter saying you can work from wherever, we dont care. Again, i think that will be an advantage to both you and to those entrepreneurs and kansas city and whatnot. Absolutely. And the cost of living balanced with how much it will cost for you to employ people, right . You can build some of these digital models much faster if you are working in a kind of midwest price range. And i think that bodes really well for the fundamental economics of the companies that Venture Capitalists are going to look to support right now. You have also got the crisis aspect of this. Some of the greatest companies have come out of crisis, ear the. Com bust or the 2009 housing crisis, saw some of our best Tech Companies born. I think this is going to happen again. Absolutely. Early stage venture is absolutely ripe inside of an economic downturn. Vintages of funds from 2001, 2008 through 2010 are some of the best performing assets out there. Now, i personally think there is a different challenge with this particular crisis because of the magnitude, the speed of which this crisis came on. But also, the number of people negatively impacted by the virus and the the results of the virus on our economy. And so i think the challenges will be very real. But the opportunities will be ripe. I think it is going to be up to the Venture Capitalists and the people with the power and the money right now to make really good decisions about the companies we are backing. Are they companies that can help our economy recover . And i think we have a a responsibility to do precisely that. Speaking of crisis, 20 years ago, gosh 20 years ago you helped lead kenner fitzgerald out of 9 11. For the viewers who are too young to remember, kenner fitzgerald was in one of the twin towers and took a direct hit by one of the airliners. And 687 Cantor Fitzgerald employees died in the 9 11 attacks. Nearly destroyed the company. You helped lead it out. Are there parallels there . Normally i would never make a parallel to 9 11 but of course last weekend 3,000 americans died from covid19. So there are some parallels. I have been asked many times over the years how did that team at cantor go back to work . How did you guys do that with all that was going on around you, and the pain and the suffering that everybody was going through . I think for all of us then, and i think this is true of a lot of people now, it was about having no other choice. You had to go back to work because the heaviness of what we were dealing with was too hard and the on way we could consider a future was to know that we could put the company back together and do it in honor of the people that we lost and also in a way to financially support their families. And so, certainly, there are i think thats true of any crisis. People go to a place that is comfortable. The place for us was to get back to work. But i feel thats exactly what we need to do here. We need to help put as many people as possible back to work in our economy. And we need to be able to provide the right ideas, the right platform, and the right foundation so that we can rebuild this economy better than it was before. Amy, let me end on a positive note. You say the current lack of separation between work and life is going to create a more empathetic work culture. You think bosses may be more empathetic towards employees that now we have all been home. Yeah, anthemists we have always had a balances Work Life Balance set up. But what i am recognizing now, even the smallest thing around the gender equity balance, to see the number of men on zoom calls and meetings where they might not have acknowledged their part in the family, their participatehood role with a kid coming in from the left or to the right and jumping on their lap and recognizing that thats actually okay. I hope with all of us sharing a bit more in the school and work and home continuum that whats going to come from that is, a, you know, workplaces having a really tough time to tell somebody they cant work from home ever again because it is going to be hard to justify. But also, the balance between men and women really working to the advantage of gender equity in the workplace. Amy naulakis of anthem Venture Capitalists thank you for joining us from new york ci city. What start ups need to be doing right now when press here continues. Welcome back to press here. We started the show talking about how Venture Capital will have to change after the pandemic is over. Now i want to get to the other side of that coin and startups and how they are going to have to change. Greg sands is founder and managing partner at coast to know ventures. 25 years in the valley, sits on eight boards of different startups. He has advice of what startups need to be thinking about and doing right now. Greg, good morning. Let me anticipate your first answer about what stap startups need to be doing. I am guessing slow their burn rate, am i right. It was going to be my third answer but it is absolutely right, cash is king in an environment like this. Startups focus on bookings and revenue and in this case both collecting cash from customers, taking care of existing customers, and being clear about reducing any expense that they can. Okay. Well thats good news if your cash burn is your third priority. Give me one and two. The first one is to lead with transparency and authenticity. Your leading a group through a very challenging time. Thats one. The second is focus is prioritize. Are you still investing in startups at this point . Are you still writing checks . We are. In fact, we made a new commitment just two days ago. Tell me more about it. Well, its to me, the thing thats really having about it is that it is a founder who we have never met face to face. Its the first time that we have done that in the history of the firm. All of our meetings have been over zoom or over telephone calls. So it was a really new experience to figure out how to really understand the person that we might be in business with for seven or eight years over an electronic medium. And that goes to that point of, you know, sill voni valley and sand hill road used to be about who you knew and who you ran into in the coffee shop. Now the network is spreading out, as to your point that you have never actually met this person face to face. Well, i think thats right. And i think its actually a good thing. We prior to the pandemic were certainly trying to spread our wings and be sure that we werent only talking to and working with the people that we knew directly. And i think of course in a world where we want to be more inclusive, we want to reach out to broader populations because we know talent is everywhere, even though opportunity isnt. I think it is an extra challenge to do that in a coronavirus shelter in place environment. Now, the other thing thats going to change, both for Venture Capital and startups is you are going to have to wait longer for an exit. I dont see an ipo happening real soon, real fast. Thats right. At the same time, we are an early stage investor. So at seed stage and serie a stage. As a result, we dont really care very much about what the nasdaq is doing right now. We care about what it is doing in five or six or seven years. After 9 11, a lot of Companies Either got into the securities business or pivoted to the security business. I am getting the sense that telemedicine is obviously very hot. All kinds of laboratories, sort of startups are very hot, that this is obviously a reaction to covid19. Are you seeing that in the Venture Capital landscape as well . Can you give me a hin as to what your commitment is . Is it health care . It is not actually health care. It is in and around the data stacks. One of the thing that you have been hearing for the last several years that all forwardlooking organizations need to be data driven, they need to know how to manage their data, how to analyze their data. In this case, they also, one of the implications of work from home is they need to be able to collaborate on their data and they need to collaborate on that data when everybody is broadly distributed. Sometimes just in their homes, sometimes all over the world. So this is the continuation of an ongoing trend. I think one of the things that we will see is that many of the best Collaboration Tools will be deeply embedded within an existing business process. And this Company Getting that funding through a collaboration tool, i suppose i ought to ask, for the advice of startups, how is the best pitch over zoom . That has to be a very strange way to pitch a Venture Capital firm . It is a very strange way to do it. I think there are a couple of best practices, one of which is to i think it is an environment where being knowledgeable and being yourself matters more. I think when people are in the room, there has tended to be this emphasis on passion and projection. And i dont think that comes very well in zoom. So you are better off just being yourself and being deeply knowledgeable. We used to have these afternoonlong meetings doing product diligence and no one can stand a fourhour long meeting on zoom. One of the things we have learned is to have snack level Due Diligence where you do regular daily onehour meetings. But you break it up into chunks. It also helps you build a better sense of the person day after day. And thats part of what we all miss by being face to face. So i think it actual solves two things at once. Greg, i want to end with this. We are both midwestern guys. You got to the valley before i did. You were at netscape. Not only were you at netscape, it is my understanding you came up with the word netscape; is that right . That is true. I came up with it sitting in mark andreasons office surrounded by boxes of honey homes. I wonder whatever happened to that andreason guy. What was the runner up . What was netscape possibly going to be called. There were no other alternatives. We did a brainstorming session with the Engineering Team and all of the names were awful. We were sitting there. I got called into the office with jim and the former vp of marketing. And they said we have got to come up with something. And after a month of working on it and coming up with nothing, it popped into my head, i said it out loud and people shrugged and said yeah, i think that would be it. Greg sands who has been with the startup communities such a long time. Thank you for being with us this morning. Press here will be right back. Welcome back to press here, im scott mcgrew. One of the key questions we are asking about the future of the Silicon Valley economy is what is Venture Capital going to do . When you go up on sand hill road i think a lot of the Venture Capital firms up there would ask themselves, what is andreason horowitz going to do . Connie chan is a general partner there. Forget about waiting until the end of the pandemic. You are inveterinariansing now. Tell me about that . For sure. I think this is actually a great opportunity for entrepreneurs to be building new things in a variety of sectors. We are definitely still investing and open for business. One of them is run the world. What was the appeal on that one . Run the world was a company that i have known for a while now. So we actually led their seed investment this past summer. We decided to double down and colead their serie a investment. A big part of why i love this one is they are actually benefitting from the tail winds of people now beneath needing to use the internet to connect with one another. For example, if you used to attend a Conference Live in person and you still want to meet those same folks you can host that very same meet up, that very same conference on line. I feel it is encouraging you are still out there writing checks. Restaurants arent open, stores arent open. But it sounds like to some degree andreason horowitz is open for business . We really believe right now is the time to build great new thing. We believe a new sectors the way we are going get out of this crisis is to build and build things across all sipds of sectors. We are definitely still open for business, open to investing in new companies. A number of companies are investing in things like you are, teleconferencing, telemedicine. After 9 11 there was a quick push to either transition into security or invest in security because understandably it was on our minds. Right. Is there any danger that we might oversubscribe to telemedicine and that sort of thing . You see where i am going with that. I think it is an open whether or not new behaviors created during the lockdown are going to persist when everything reopens. I think online conferencing and on line meet ups is going to exist. Run the world is accelerating that change right now. As you start engaging in a couple of these events i have attended several myself you realize you actually can still benefit from meeting people on line in a very meaningful way such that you can now save time of travel, save the cost of flying to a conference. And you can now engage and meet people on line in a way that still allows to you form those deep relationships. I actually think this kind of activity, this type of behavior can persist even after the economy reopens because of bringing more efficiency into meet ups and conferencing. My last question for you is what is it look as a Venture Capitalist doing all of this Via Teleconference and whatnot . No longer are you sitting across the board room table or meeting for coffee. You are trying to do all this from your house . It is definitely a big change for us. As you know, we are in the people business. We are investing in entrepreneurs and their vision a. Big part of getting to know them. As a result we are doing lots of zoom calls. We are doing lots of reference checks. We are spending a lot of time still talking to these people and connecting to them, but doing it on the phone and through zoom. So far, so good, though. We have definitely been making investments, even folks we have only met through the zoom context and not in person yet. I would say that the ability for us to still meet entrepreneurs, build our trust in them and feel like we can work with them for the next decade is still working. Connie chan with andreason horowitz, thank you for joining us. Press here will be back in just a moment. Thats our show for this week. If you missed the top of the show, we ar chief every interview at press her tv. Com. It is also available as an Apple Podcast as well. Speaking of podcasts, ours is back up and running as well. It is sand hill road. You can find it wherever you find your podcasts. Im scott mcgrew. Thanks to my guests and thank you for making us part of your sunday morning. Ken foreman i once had the chance to visit alcatraz, not as an inmate, but on a video shoot just to clarify. We took our cameras to solitary confinement, and in that location, there were certain cells that were known as the hole. They were small, soundproofed, and completely dark. A prisoner would be here all by himself 24 hours a day. Have you ever felt like youre all alone . Before the pandemic, there was an epidemic of loneliness in our culture, and now those feelings are off the charts. In times like these, we lean into the truth that even when im all by myself, im never really alone. The Good Shepherd is with me, and thats what gives me courage. Welcome to living courageously