Tom Loverro: The Ultimate Startup Survival Guide for 2023 | 20VC #977
15Tom Loverro is a Partner @ IVP where he has led or was actively involved in investments in Amplitude, Coinbase, Hashicorp and Datadog to name a few. As a result of his investing success, Tom was named to Forbes Midas List in 2021. Prior to joining IVP, Tom was a Principal at RRE Ventures.
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Timestamps:
0:00 How Tom Got Into Venture
1:43 Tomβs Epic Tweet Thread
3:43 Will we see downrounds?
9:43 Now Is The Calm Before The Storm
10:55 Reserve Management & Bridge Rounds
13:15 Why will this time be worse than the Great Financial Crisis?
19:53 Wave of New LPs
24:21 Advice On When To Sell
26:12 Survival Guide for Founders
34:33 Bringing in Talent
44:00 Quick Fire Round
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In Todayβs Episode with Tom Loverro We Discuss:
1.) The Entry into Venture:
How did Tom make his way into venture first with RRE? How did the role with IVP come about?
Does Tom believe we will see many venture investors move firms with much of their existing expected carry cut in half with the changing landscape?
What is Tomβs biggest advice to someone looking to make their way into the venture world?
2.) The Calm Before the Storm:
Why does Tom believe now is the calm before the storm?
Why does Tom urge founders to go out and raise now before the storm hits?
Is Tom already seeing pricing coming down for both early and late-stage companies?
3.) When The Storm Hits:
When does Tom believe the storm will hit?
Why does Tom believe when it does hit, it will be worse than The Great Financial Crisis?
How will VCs respond when the storm hits? How will it impact their investing cadence?
How will LPs respond when the storm hits? Will they cut back their manager commitments?
Does Tom have hope that their will be a new class of LPs in this new economic cycle?
4.) The Rounds That Happen When The Storm Hits:
Does Tom believe we will see a wave of down rounds when the storm hits? Why are they less common than people think?
In the eye of the storm, will we see further layoffs? Will we see firesales? Will we see a tidal wave of shutdowns?
Will large multi-stage funds with huge amounts of dry powder change their deployment pace?
The Survival Guide for the Storm:
1.) Raise Now:
Why does Tom believe that startups should raise now, not later? What amount of runway should they raise for in this environment?
2.) Cut, Cut and Cut Some More:
What amount of runway should startups be cutting to get to?
How will this impact marketing spend? Why are your marketing dollars more powerful now than ever before?
3.) Focus on Survival Not Valuation:
What does Tom mean by this? How can founders gain leverage with VCs when raising today?
How can founders instil a sense of urgency in their raise with investors?
4.) Bring on Operators with Experience:
Why would operators with experience join a struggling startup?
Will operators with experience not have a flight to safety and stay at their well-paid FANNG role?
Does this potential operator not shorten runway even further as they are often expensive?
5.) Unit Economics over Growth:
How can founders show investors a superior profile of unit economics moving forward?
Do investors not want both unit econ and growth today?
6.) Play Your Cards Right and Then Go on Offense:
How does Tom advise founders on the right time to go on offense?
7.) Be Decisive, Half Measures Rarely Succeed:
How does Tom define a half-measure? What is so wrong with half-measures?
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