Shift Magazine - April 2020 - 7

The
advice we're
giving is to act
like you're never
going to raise
another round
of funding.

the Great Recession, Brennan says at least
some founders who launch into today's economic headwinds will later flourish.
"Founders from the fourth quarter of this
year will be cut from an unusual cloth," he
said. "That's what investors will look at."
They'll also be looking at a sea change in
technology advances, consumer behavior
and shifts in demand. One already is apparent. In the age of the coronavirus, consumers have become more reliant on delivery
services, which have transformed from a conJulie Lein, co-founder and
venience into what's arguably now an essential
managing partner of the
component of everyday life.
Urban Innovation
Ride-hailing networks Uber and Lyft were losing
FUTURE FOCUS
Fund
hundreds of millions of dollars even as the preTal Cohen, founding partner at business incubator
COVID economy hummed. With automated ride-hailing
Drive TLV and mobility-minded investment fund Next Gear
for passenger vehicles still far away, several investors posited
Ventures, sees bigger changes afoot. Big corporations may be
there will be a shift from AV-minded ride-hailing applications
bogged down by the current crisis, but smaller companies and
toward delivery ones.
their founders can pivot toward new opportunities faster.
While he cautions against painting mobility companies with too
"I think the real leap is going to happen when they are brave
broad a brush, Brennan expects one constant: fertile opportunities.
enough to take more distance from their current ideas and make
"One of the key things in venture capital is that the money
a larger leap, more focused into where the industry is going to
you put in today gets harvested and returned to shareholders
be when we come out of this bubble," he said.
over a 7- to 10-year window," he said. "So if there's a softenAlong those lines, companies that survive the tumult could be
ing over the next 24 months and valuations go down on great
in prime position to lead over the next decade. Noting that the
companies and great founders, I'll be first in line in wanting to
likes of Airbnb, Uber and Twilio all started in and emerged from
support them." n
which has emphasized long-term potential
with less regard for short-term cash burn.
"In the short term, to survive and thrive,
that's cash," said Lein, speaking during a
CoMotion webinar on the prospect of a
COVID-caused "nuclear winter" across
the capital landscape. "The advice we're
giving is to act like you're never going to
raise another round of funding. What does
that do? It means put fundamentals in place,
find a pathway to profitability and look at unit
economics. A lot of the things that, frankly,
were not as sexy or talked about in the venture
capital landscape."

april 2020 * shift

Shift Magazine - April 2020

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