Day: April 9, 2020

It’s ‘bullshit’ that VCs are open for business right now (but that could change in a month)

Earlier today, to get a sense of what’s happening in the land of venture capital, the law firm Fenwick & West hosted a virtual roundtable discussion with New York investors Hadley Harris, a founding general partner with Eniac Ventures; Brad Svrluga, a co-founder and general partner of Primary Ventures; and Ellie Wheeler, a partner with Greylock.

Each investor is experiencing the coronavirus-driven lockdown in unique ways, unsurprisingly. Their professional experiences are very much in sync, however, and founders should know the bottom line is that they aren’t making brand-new bets at this very moment.

On the personal front, Wheeler is expecting her first child. Harris is enjoying lunch with his wife every day. Svrluga said that he hasn’t had so many consecutive meals with his kids in more than a decade. (He described this as a treat.)

Professionally, things have been more of a struggle. First, all have been swamped in recent weeks, trying to assess which of their startups are the most at risk, which are worth salvaging and which may be encountering unexpected opportunity — and how to address each of these scenarios.

They are so busy, in fact, that none is writing checks right now to founders who might be trying to reach them for the first time. Indeed, Harris takes issue with investors who’ve said throughout this crisis that they are still very open to pitches. “I’ve seen a lot of VCs talking about being open for business, and I’ve been pretty outspoken on Twitter that I think that’s largely bullshit and sends the wrong message to entrepreneurs.

“We’re completely swamped right now in terms of bandwidth” because of the work required by existing portfolio companies. Bandwidth, he added, “is our biggest constraint, not money.”

What happens when bandwidth is no longer such an issue? It’s worth noting that none thinks that meeting founders exclusively remotely is natural or normal or conducive to deal-making — not at their firms, in any case.

Wheeler noted that while “some accelerators and seed funds that are prolific have been doing this in some way, shape or form for a bit,” for “a lot of firms,” it’s just awkward to contemplate funding someone they have never met in person.

“The first part of the diligence process is the same, that’s not hard,” said Wheeler. “It’s meeting the team, visiting [the startup’s workspace], meeting our team. How do you do that [online]?” she asked. “How do you mimic what you pick up from spending time together [both] casually and formally? I don’t think people have figured that out,” she said, adding, “The longer this goes on, we’ll have to.”

As for what to pitch them anyway, each is far less interested in sectors that aren’t highly relevant to this new world. Harris said, for example, that now is not the time to float your new idea for a brick-and-mortar business. Wheeler separately observed that many people have discovered in recent weeks that “distributed teams and remote work are actually more viable and sustainable than people thought they were,” suggesting that related software is of continued interest to Greylock.

Svrluga said Primary Ventures is paying attention to software that enables more seamless remote work, too.  Telecommuting “has been a culture-positive event for the 18 people at my firm,” he said.

Naturally, the three were asked — by Fenwick attorney Evan Bienstock, who moderated the discussion — about downsizing, which each had noted was a nearly inescapable part of lengthening a startup’s runway right now. (“It sucks,” said Svrluga. “People are losing their jobs. But to continue to run teams with the same organizational structure as 60 days ago, [which was] the most favorable environment for building industries, you can’t do it.”)

Their uniform advice for management teams that have to cut is to cut deeply to prevent from having to do it a second time.

Though no one wants to part ways with the people who they’ve brought aboard, “no CEO has ever told me, ‘Dammit, we cut too far,’ ” said Svrluga, who has been through two downturns in his career. In contrast, “at least 30%” of the CEOs he has known admitted to not going far enough to insulate their business while also keeping its culture intact.

The “second cut hurts way more,” added Wheeler. “It’s the second [layoff] that really throws people.”

If you’re wondering what’s next, the VCs all said that they’ll be receptive to new ideas after working through layoffs and burn rates and projected runways, along with the new stimulus package that they’re trying to find a way to make work for their startups.

As for how soon that might be, Wheeler and Svrluga suggested the world might look less upside down in a month. They proposed that four or so more weeks should also give founders more needed time to adjust some of their expectations.

Harris seemed to agree. “It will probably be a gradual thing . . . I’m not sure what next week holds, but feel free to ping me in a month and I’ll let [founders] know if I think it’s opening up.”

5 Keys For Being Successful In A Long Distance Relationship

All relationships have their challenges. But when you are in a long-distance relationship, the challenges you face are very unique and sometimes difficult to overcome. Difficult but not impossible, nonetheless.

Most people wouldn’t choose to be in a long-distance relationship. But sometimes circumstances can’t be helped and, if you don’t want to end things, that’s the reality. So, although absence can make the heart grow fonder, it can also mean that you’ll need to establish a few ground rules and learn some new routines in order to be successful.

Coming To Terms With The Distance

maintain a long distance relationship

One of the hardest parts of living with a long-distance relationship is the psychological aspect. Yes, there are many new behaviors and practices that you need to consider, but before you can do that you need to be mentally and emotionally ready to make them work.

Being successful with the new dynamic of your relationship means accepting that the distance is real, and things will be different. It’s easy to live in denial and pretend that nothing will change, but the truth is that they will. Both you and your partner will need to be realistic and open about this. If you’re not, you will set yourselves up for disappointment. There will be a disconnect between the two of you, and likely failure.

So, how do you do this?

The short and sweet answer is to talk about it. Be honest with each other about your concerns and fears regarding the challenges and time frames associated. Maybe it’s a work assignment with predefined times, or perhaps it’s a permanent move for one of you.

Whatever the reason, discussing ahead of time the expectations for how long you’ll be apart is important for establishing the right psychological approach to your situation.

The same can be said for discussing your fears about the new dynamic in your relationship. No matter how strong your relationship is, you should each have questions and doubts about the impact it will have and how you will make it successful. It’s not a sign of weakness to admit that.

In fact, not asking can potentially create a situation where those fears will come true. But by discussing them you add the strength of your partner to your own strength as you work together to make sure things stay healthy and strong between you.

Be careful not to be too naïve or overly confident. Underestimating the impact is an easy and tempting thing to do. Being optimistic is great, but you have to be realistic and honest about the potential negatives as well.

Once you and your partner have committed to making things work, you then need to make a plan for how that will happen.

Best Practices For A Strong Long-Distance Relationship

There’s no surefire formula for making a long-distance relationship work. Each circumstance will be a bit different and each couple will have to adjust as necessary. The one certainty for every couple in this situation is the uncertainty that it will cause on a regular basis for each of you. With that said, there are some best practices that can help make the success more likely.

Agree on a goal

A permanently long-distance relationship isn’t realistic for most. While there’s always exceptions, physical proximity eventually becomes a crucial factor for a happy and healthy relationship. The time you plan to be apart may be long, short, or subject to change, but along with that understanding you need to agree upon a goal for your relationship in general.

Are you married? Do you want to get married? Do you want to eventually live in a specific area together? Are you working toward saving a certain amount of money to get to the next step? Leaving things too open-ended can lead to a lack of commitment.

Make talk dates

You may need to be flexible with this as life has a way of altering schedules, but making phone dates or FaceTime dates can give you each something to look forward to and help keep you connected.

This may seem like a no-brainer, but because you each have a life and your normal daily activities can take over, it can become easier and easier to allow these things to slip. So, treat them like a regular “date” and make a plan to “get together” on a set schedule.

Pre-plan visits

long distance relationship

This can be harder for some than for others, but try to plan ahead for visits. This may mean going to each other, or it may mean meeting in the middle, but seeing each other is an important way to keep things strong.

Word to the wise – surprise visits should be thoughtfully considered before initiated. Because of hectic schedules or set plans that can be hard to alter at a moment’s notice sometimes, a supposedly fun, surprise visit can actually backfire by causing stress and difficulty despite the good intention.

Keep things romantic

Physical romance and intimacy can be exponentially more difficult when you’re apart, but you should still make an effort. Send little mementos, romantic texts, and make sure you are open about your feelings of love and desire. And, when it’s appropriate, there are ways to create intimacy using technology. Just be smart and avoid taking pictures or doing things that leave a permanent digital record and could be harmful down the road.

See Also: 12 Tips on How to Celebrate Anniversary in a Long Distance Relationship

Trust, trust, trust

This can be especially difficult. When you’re apart it can be easy to let your imagination get the best of you and feel convinced that your partner is betraying you. This, unfortunately, is one of the biggest killers of a successful long-distance relationship. But there is a big difference between checking-in and checking-up on your partner. So, accusing them of anything without proof can put a quick end to things.

Today, more than ever, the world feels both smaller and more accessible. This means that at any point the possibility that you or your partner may have an opportunity beyond your current geography always exists. It can seem scary to consider a long-distance relationship, but people do it successfully every day. If you find yourself in this situation, you can, too, if you’re smart about it.

The post 5 Keys For Being Successful In A Long Distance Relationship appeared first on Dumb Little Man.

Samsung is donating 2,000 glove-friendly phones to NHS workers

Samsung is donating 2,000 glove-friendly phones to NHS workers

Samsung announced today that it will donate 2,000 devices to the U.K. National Health Service’s Nightingale Hospitals, as well as provide them with UV phone sanitising machines. With the coronavirus pandemic currently stretching healthcare systems to their limits, hospital staff could use all the help they can get.

“Healthcare workers are working tirelessly to protect our nation at its time of greatest need,” said a Samsung U.Kpress release. “This is why we have developed a series of measures to ensure these individuals are able to defy the barriers they are faced with, day in and day out.”

The BBC reports the devices Samsung is providing are Galaxy XCover 4s phones, designed to be robust and capable of being operated while using gloves. Staff will be able to sterilise them as well, with Samsung installing at least 35 UV phone sanitising machines in the hospitals. Read more…

More about Samsung, Nhs, National Health Service, Coronavirus, and Covid 19

Commercial real estate could be in trouble — even after this is over

Commercial real estate owners, brokers, and landlords have collectively made many hundreds of billions of dollars a year in recent years as the economy zipped along.

Now, they’re getting clobbered by the pandemic-fueled economic crisis. Worse, their industry may be forever changed by it.

To state the obvious, extracting rent from nearly anyone right now is problematic. According to the National Multifamily Housing Council, just 69% of U.S. households had paid their rent by April 5 compared with the 81% who’d paid by March 5 and the 82% who paid by the same time last year.

That statistic will almost assuredly look worse by May 5, given the soaring numbers of both laid-off and furloughed employees.

On the commercial side, the problem is beginning to look as dire. In addition to the countless small retail and restaurant businesses that may be forced to permanently vacate their commercial spaces because they can no long afford them, a growing number of corporate chains is also beginning to prove unwilling or able to pay their rent.

WeWork, for example, has stopped paying rent at some U.S. locations while it tries to renegotiate leases, says the WSJ, this even as the co-working company continues to charge its own tenants.

Staples, Subway and Mattress Firm have also stopped paying rent as a way to strong-arm building owners into rent reductions, lease amendments and other courses of action designed to offset the losses they are incurring because of the coronavirus.

Ch, ch, ch, changes

The question begged is what happens next. While some may look to muscle their way into distressed assets, it’s very possible that more broadly, the commercial real estate market will never look the same.

For one thing, while small retailers and restaurants melt away, some of their online rivals are beefing up. Amazon, despite no shortage of bad publicity, gains market share by the day. In fact, this week, it again sailed into trillion-dollar territory.

The online streetwear marketplace StockX is also booming, as we reported a few weeks ago. As said its CEO, Scott Cutler, at the time: “[W]e’ve always been a marketplace of scarcity, but now you can’t actually go into a real retail location, so you’re coming to StockX.”

The landscape may change particularly quickly in markets like San Francisco, Chicago, Boston, and New York, where not only is there a density of independent shops and restaurants, but startup employees and other white collar workers are suddenly working from home — and perfecting the art of distributed teamwork.

Consider Nelson Chu, the founder and CEO of Cadence, a seed-stage, 17-person securitization platform startup in New York. After recently landing $4 million in funding, Cadence signed a lease last month with a landlord who has agreed to start charging the outfit only when it is able to move into its new uptown digs.

It’s a good deal for Cadence, which doesn’t have to worry about paying for square footage it can’t use. Nevertheless, Chu notes that being forced to work remotely has awakened him to the possibility of incorporating more remote work into the startup’s processes.

“You always question whether remote work will impact business continuity,” says Chu “But now that we’re forced to do it, we haven’t skipped a beat. There could be something to be said for having less office space and allowing the people who commute from out of state to not have to be in the office every day.”

It’s easy to imagine that, using tools like Slack, Google Sheets, and Zoom, other founders and management teams that hadn’t already joined the telecommuting trend are coming to the same conclusion.

Taking care of business

The possibility isn’t lost on real estate companies.

“Remote work is something we’re thinking a lot about right now,” says Colin Yasukochi, director of research and analysis at the commercial real estate services giant CBRE. “People are right now being forced to do it,” but “I think some will inevitably stick” to working remotely, he says. “The question of how many, and for how long, is unknown.”

Certainly, it’s not the trend CBRE or others in the real estate world were expecting this year. An “outlook” report published by CBRE last November sounded understandably rosy. “Barring any unforeseen risks,” it said at the time, “resilient economic activity, strong property fundamentals, low interest rates and the relative attractiveness of real estate as an asset class” collectively suggested that 2020 would be a “very good year” for commercial real estate.

In the ensuing months, of course, that unforeseen risk has prompted shutdowns that have led to layoffs across nearly every sector of the economy. It has also — by the very nature of it being a viral contagion — made it highly likely that even when people are allowed to re-occupy commercial spaces, they’ll be less enthusiastic about dense workspaces.

This is doubly true if they know they can get their work done outside the office.

It could well lead to reduced demand for office space later on. It could also mean the same amount of space — or perhaps even more —  with reconfigured office layouts. No one yet knows, including commercial estate brokers.

Mark George, a San Jose, Calif.-based broker with the commercial real estate company Cresa, is currently working from home, where he shares an office with his wife, who is also working remotely for the first time. It’s nice to be home with their children, says George, but being housebound makes it harder to get a pulse on industry changes, particular in his industry.

Brokers are “somewhat isolated,” he says. “Touring activity has dried up because we can’t show space. City Hall is closed in every municipality, so you can’t pull permits. The industry is really shut down.”

George said that “deals that were at the finish line probably got signed” before the coronavirus really took hold in the U.S. But the “deals that were close and not quite there? Every deal I’ve seen has been put on ice. Everyone is in a holding pattern.”

A Cresa colleague of George in San Francisco, Brandon Leitner, echoes the sentiment, saying that “things are not moving fast.” Still, Leitner expects the firm — which handles clients as big as Twitter to Series A and even seed-stage companies — will see a deluge of activity once the city’s current stay-in-place mandate is lifted and brokers can start showing properties again.

Specifically, Leitner expects the market to come down by “at least 10% and probably 20% to 30%” from where commercial space in San Francisco has priced in several years, which is $88 per square foot, according to CBRE. Driving the expected drop is the 2 million square feet that will come onto the market in the city as soon as it’s possible — space that companies want to get off their books.

That’s a lot, particularly given that there is roughly 3.2 million square feet of commercial space available already, according to CBRE’s Yasukochi, who adds that a “good amount” came onto the market in the last six months alone.

Say it ain’t so

That’s not great for landlords, who are “hesitant right now to put a new number on the market,” says Leitner.

He offers that they are “realistic” and likely to “make as many concessions as they can” to hang on to and attract new tenants. Of course, there’s only so much they can do. They typically have debt to contend with, meaning that if there’s a sustained downturn, or fewer people return to the office, they will themselves be relying on their relationships with lenders to see them through.

George, the San Jose-based broker, believes lenders will be inclined to help in order to preserve their own investments. The Federal Reserve may also give the banks the ability to defer mortgage payments, which would make it easier for property owners to put off charging rent.

Even still, whether the commercial real estate market comes all the way back after Covid-19 remains to be seen.

“This [pandemic] is something we’ve never experienced before,” notes Yasukochi. He says CBRE’s economists estimate the next two quarters will be “very tough.” At the same time, he says, the market “might see a substantial” uptick in the four quarter.

“It really depends on whether demand bounces back, and whether expansion plans will be put on hold, or permanently [shelved].”

For now, he seems optimistic about a return to business as usual, particularly within his home market of San Francisco.

It “feels like things go wrong really fast in the Bay Area,” says Yasukochi. “But typically, they come back really fast, too.”

No doubt industry players are counting on it.