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Venture capitalist founder of Touchdown Ventures & DFJ Frontier, USC & UCLA adjunct professor, father of twins, Philly sports Phan, Forbes contributor

A guide for serving on startup boards

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The norms in venture capital have changed a lot since I started in the business in the early 1990s: in those days, syndicates were typically smaller, and any investment by a professional venture firm usually was accompanied by a formal role on the startup’s board of directors.

Sometimes an investment makes more sense than M&A

Merging lanes? Make sure everyone is ready. Image: Touchdown Ventures

I’ve personally participated in the creation of more than a dozen corporate venture capital (CVC) programs. In most of the examples I’ve seen, these efforts are championed by corporate development professionals who understand the need to bring external innovation inside the corporation. That typically means that experienced M&A executives are expanding their purview to include minority investments.

Ownership requires stewardship

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Venture capital firms come in all shapes, sizes, and cultures. One organization with which I’m familiar started in the early 2000s and was known for celebrating each time it completed a new investment. The firm would throw a lavish, self-congratulatory party for each new startup added to the portfolio. Not surprisingly, this investment firm is no longer in business.

Opportunities for VCs to address racial inequity

Image used with permission from Victor Varnado

As 2021 begins, it’s difficult not to acknowledge the precarious state of American society: the Covid-19 pandemic continues to grip our country, high unemployment signals underlying challenges to the economy, and our nation remains bitterly divided following a closely contested presidential election. Amidst this backdrop, we continue to grapple with many cultural issues reignited last year, most notably racial equality.

How to assess syndicate partners

Image: Shuttestock

As I’ve previously written, entrepreneurship and venture capital can be more challenging during a downturn, but startups that make it through can emerge in a position of strength. While investment capital typically becomes tighter during a recession, startups generally have less competition. As a result, more enduring companies may potentially be founded at times like these according to research from the Kauffman Foundation. It remains to be seen how the current recession will play out in the venture capital ecosystem.

Racial Equality & Human Rights

Image: Ahmed H. Moustafa for Shutterstock

During the past few weeks, we have been reaching out to our friends in the black community to listen, engage, and understand how to start the process of being supportive.

They organize innovation efforts

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C-suite executives often struggle to make sense out of the variety of innovation options at their disposal. Should the corporation build internally, launch an incubator, partner with an accelerator, start a venture fund, expand an M&A program, or engage in more than one of these activities? The choices can appear complex and overwhelming, even when reduced to basic options like “build, buy, partner, or invest.”

Defend your existing responsibilities, then prepare to go on offense to acquire new assets

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The recent collapse of the stock market would indicate that we are entering a down economy. Economic complications from the global coronavirus pandemic are already impacting diverse industries like hospitality, construction, entertainment, retail, food service, and many others. In addition, many venture capitalists — including those at Sequoia — are attempting to prepare their portfolio companies for a new reality while claiming credit publicly for detecting a change in the wind.

In a recession, corporations can be even more valuable to startups

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Corporate investors have the potential to be among the most valuable participants on a startup’s cap table. In the current COVID-19 environment where traditional fund raising cycles may be extended, a corporate investment that includes more than just cash can be critical. This is because a good strategic investment relationship frequently includes a commercial transaction, or “business development” deal. These relationships have the potential to be just as impactful as cash investments and can help startups survive an economic downturn.

A Step-By-Step Guide To Help Make Board Meetings More Effective For Venture-Backed Companies

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I’ve lost track of how many board meetings I’ve attended so far in my venture capital career, but I’d estimate it’s somewhere between 500 and 1,000. It’s certainly enough to have formed an impression of what makes effective regular interactions between entrepreneurial management teams and those who are responsible for startup governance.

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