362. Orchestrating a $1B+ Secondaries Purchase from NEA, Tradeoffs of Burn, Growth, and Valuation, and Winning Against Multistage Firms (Ravi Viswanathan)

Ravi Viswanathan of NVC joins Nick to discuss Orchestrating a $1B+ Secondaries Purchase from NEA, Tradeoffs of Burn, Growth, and Valuation, and Winning Against Multistage Firms. In this episode we cover:

The Birth of NewView Capital
How to Compete and Win Against Multistage Firms
Damage Control for 2023
Super App Ethics
And More!

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Transcribed with AI:

Nick Moran 0:00
Ravi Viswanathan joins us today from San Francisco. He’s the founder and managing partner at New View Capital, a growth stage firm investing in technology companies, either directly or through curated portfolio acquisitions. Prior to starting New View, Ravi was General Partner at NEA where he invested in enterprise software and fintech companies, along with co-leading the firm’s technology venture growth equity effort. In 2018. Ravi raised 1.35 billion to architect an innovative portfolio acquisition of 31 NEA portfolio companies to found New View Capital. He has invested in companies including Braintree, MuleSoft, Plaid, Forter, GlobalLogic, Tele Atlas, Science Acquia, Scout, amidst many others, Ravi, welcome to the show.

Ravi Viswanathan 0:48
Nick, great to be on. Thank you,

Nick Moran 0:50
Yeah, no, it’s a pleasure to connect. Can you tell us a bit about your background and your path to venture?

Ravi Viswanathan 0:56
So I’ve been a VC for about 23 years, I call it a pretty non traditional path to venture. Born Indian, grew up on the East Coast, really, science and technology were a real passion of mine. So, I became a scientist. So I have a PhD in material science, chemical engineering, and I was a scientist in the mid 90s. In a field that later was known as nanotechnology in the Bay Area, it was a pretty interesting time to be a scientist. But after a couple of years, I realized I liked the science and research but maybe not the just for the researching and maybe more for the commercialization. And maybe the investing side. I had no idea about that. So I decided to do a pivot. And the best way to do a pivot is go to business school. I went to business school and after business school embarked on my second career, which was consulting as a consultant for a couple of years. And then early 2000, I became a VC. So I’ve been a VC for 23 years, three firms, or Goldman Sachs, first four years, and then NEA for the vast majority of my career, 15 years, and then obviously, founding New View, four years ago.

Nick Moran 1:45
And where were you based? For most of that time, Ravi,

Ravi Viswanathan 1:47
I was based when I was at Goldman, I was in New York. And then I joined NEA in their DC office there a couple of years. And then the vast majority of my time was out of our Menlo Park office. So been based in the Bay Area the last close to 20 years.

Nick Moran 2:02
So is it true that VCs do investing very differently on the East Coast versus the West?

Ravi Viswanathan 2:06
You know, there is definitely something to the, you know, the East Coast, maybe a little bit more conservative, the west coast a little bit more aggressive. But it was a really healthy balance. It just made them now just a lot more disciplined and thoughtful, you had a lot more perspective versus sometimes you need the same gene pool, looking at the same thing, you actually could get into situations where you don’t have an alternate view. And that could be harmful at times.

Nick Moran 2:30
Well, we’re very fortunate to have Chuck Newhall on the show recently, one of the founders of NEA, and it will be great to hear more about your experience. But tell us a bit about the path to founding new view. It’s a unique circumstance. And we’d love to hear how that came together,

Unknown Speaker 2:46
As I’d mentioned I was at NEA 15 years, if you know NEA large funds, seed to growth, tech and med, so very diversified. But out of one pool, which is pretty different than a lot of the platforms that are out there today. And this New View really the birth of it was really started out as a, as a broad portfolio management exercise. This is about five years ago, we got together, the general partners got together. And we said you know what, raising bigger funds faster and faster. Companies are staying private longer. As such, the portfolio had grown in size, several 100 portfolio companies, we need to do a pretty thorough look at the portfolio to see how do we best look at the portfolio, whether it’s the early stage, late stage, just across sectors, and I drove that effort. What we discovered is there was a bunch of companies or high quality companies, but we just weren’t paying as much attention as some of the other investments. And why was that it was an older fund, or the lead partner general partner had left or his funds were the follow on pressure. So maybe this could be better served if we spun it out as a strategic spin off. Long story short, to me, that was one of the most exciting things I had seen in venture. I talked to a lot of my friends, other VCs and I said is just the dumbest idea that you’ve heard or is it have some merit, and really everyone says it was pretty unique and interesting. And so it was also an ability for me to launch a firm with kind of a running start. So, we raised fund one, as you’d mentioned 1.35 billion spun off 30 Odd companies, growth stage companies, broadly tech, but predominantly enterprise software and fintech which are my two focus areas. And that was really the launch of New View.

Nick Moran 4:13
And, Ravi, as you launched New View and you take this fresh approach, do you think about legacy succession, and portfolio support proactively so that in 10 years time, new view is not in the circumstances of having maybe some orphan companies that are very strong ones, but no longer have sort of their internal champion?

Ravi Viswanathan 4:35
Yeah, I think it’s a great point. I should hope so. Because that was the birth of New View. And I think the way we think about it is one of our core values, and really one a strategic decision we made is really to be pretty operational with our companies. If you look at the last five years growth equity has exploded, as you know, and it’s really become just a lot of velocity that slowed obviously we talked about that. When I joined NEA Chuck, no one was on the healthcare team. There’s a lot of tech investors, really how I learned the business is you invest, but you add value to the companies, the whole idea of company building. So we take that very seriously, when you take that seriously and have it at the forefront you’re gonna pay attention to “Alright, is it time to sell the company is a time to go public? How do we best maximize the value of this company?” Because, you know, ultimately we’re fiduciaries to our limited partners. And so we’re architecting ourselves to make sure that we have an engine and a mechanism such that we don’t have (that) those issues that you noted.

Nick Moran 5:30
That’s great. Yeah, it’s one thing to source and win the deals is another thing to help advance them to the finish. Ravi, tell us about the thesis at New View, you mentioned that you’re especially interested in enterprise and in fintech, sounds like you invest a bit later than some others. What is the stage and sort of the the sector and technology orientation?

Ravi Viswanathan 5:49
I think when we started the one thing that we talked about internally, and I spent a lot of time thinking is, does the world need yet another growth equity firm? And the short answer is probably no. So how we architected ourselves, we needed to make sure that we had our own product market fit. And we tell our companies get product market fit, I needed to demonstrate that in the white space, we found was really this hybrid of a venture firm, and that we still practice company building, it’s a growth firm in that we invest, I’d say, largely double digit revenue, or ARR and above, although we’ll do single digit at times, especially for errors we know. But it also has a secondary component, because that’s we were birthed out of a secondary deal. But there’s a lot of secondary firms are probably a little bit more transactional, we’re very operational and strategic. So that was really our thesis. And in terms of sectors, I’d say 80% of what we do is FinTech and SAS and b2b software, let’s say. Stage, I’d say mid to high single digit revenue, or ARR, and then really getting into the 10, 50, etc. And the reason we focus on that is the marriage of that stage coupled with over half of our partners are operators. So we have a Finance partner, Go to market partner and a Product partner at that hyperscale phase when there’s a lot of company building to do. That’s where we’re specialists. So that’s where we found our thesis. And then to add on to it, because we’re actually a registered advisor and RIA, so we have a lot more flexibility. So when we see a company we like, we don’t necessarily have to wait until a financing round. If there’s an opportunity to get in on the secondary side. We’re happy to do that. Assuming obviously, the board management team and everyone else are embracing that as well.

Nick Moran 7:17
It is crypto and web 3 part of the purview of the FinTech mandate?

Ravi Viswanathan 7:22
No, no, it isn’t. It’s not to say Web 3, we’re looking at it. But we’re also a small firm. So we have to be careful how dispersed and diffuse we get. If you think about FinTech, we really spend, we don’t spend a lot of time on the b2c side. It’s still b2b. And it’s really a lot of infrastructure. So, investments such as Braintree, Venmo, Plaid, Forter are really in that infrastructure layer, enabling a lot of these applications of products and services. And so that’s a big core area for us, for example, b2b payments. If you look at double clicking through a sub vertical within FinTech, that’s a big area for us as well. But broadly speaking, kind of enterprise slash infrastructure Fintech is something we’re pretty excited about.

Nick Moran 8:00
When you raise the first fund the 1.35 billion, if you can share, you know, what percentage of that fund is allocated to new investments.

Ravi Viswanathan 8:09
A small percent it was about, I would say, 10, 15%. The vast majority of it really was to buy out for these 31 investments any age in LPs. So we did probably half a dozen new deals in that fund. And then two years ago, we actually bifurcated into two families of funds. One, a blind pool just for these individual deals, that’s our flagship fund, and then a set of funds for these portfolio acquisitions, these curated portfolio acquisitions. Main reason we did that is the LPs are quite a bit different, the cadence is different. So it just made sense to decouple them.

Nick Moran 8:41
And then you’ve talked about sort of the strategic emphasis in the operating support. How do you think about competing against the multistage platforms?

Ravi Viswanathan 8:49
We spent a lot of time thinking through them every week we talk about why do we matter? How are we differentiated and these multistage firms, you know, a lot of them were competing against the giants. Our model really, it’s it’s almost a back to old school, it’s almost a boutique approach, we do eight to ten deals a year, a lot of our peers do 50 to several 100. The deals we do are very operational, a lot of times that we know, the company is for a year, well in advance of when we invest, we built a really close relationship. We’ve also tried to add value operationally, even before we invest so we can kind of prove our worth. That’s how we compete. And because we don’t do a lot of deals, we can pick and choose our spots. We don’t take that lightly. We know that there’s a lot of firms, whether it’s venture firms that are venturing into growth or growth firms or just some of the crossover firms that have come into our space, but we found it a really good niche where we’ve thrived and we’ll continue that.

Nick Moran 9:36
Ravi, there’s headwinds, but venture capital firms have raised record amounts of money despite it even if some of slow the investment pace which I think many of us are seeing, where do you expect things to trends over the coming four quarters in, specifically in the venture space?

Ravi Viswanathan 9:52
I can answer in a couple of points. I think the fundraising environment is probably the most difficult it’s been probably since 08-09 there’s a lot of 08-09 analogies here. So I think the pace of venture firms raising capital will sharply decline, the investing phase is going to be interesting because on the one hand, the pace of new deals, investing into startups really has slowed to Q3. And we haven’t seen Q4, but likely to continue. The flip side of that coin is there’s a lot of dry powder, people have said hundreds of billions dry powder. And so when did that tension at both ends of that rope? When does that give, so you could see greater investment activity in 23, or slower if I were to predict, I think the first couple of quarters will still be pretty slow, until people start getting more confidence that inflation all of these macro economic issues. So we really didn’t have to deal with for a decade, some of those have either stabilized or have reverted to more positive outlooks, then you can see something flipped, you can see actually a flood, but until then, I think we’re in for some tough sledding, not just in investing, but just you know, the company building helping the companies for over the next few quarters.

Nick Moran 10:57
Do you think this is materially different than 08-09?

Ravi Viswanathan 11:01
There’s some similarities and some differences, it’s still pretty fresh in my mind, the similarities, obviously, is all hands on deck, you have to focus on burn, you have to make sure the company first step, make sure the companies are going to survive through this. Next step, resize the companies. And then third is how do you still continue to grow. So that’s very similar. I think the probably the biggest difference for me is just everything is so much bigger, the number of companies the amount of capital that’s gone in, and probably the number one thing the valuation mismatch a couple of years ago, the 50 to 100x error club got cleaned and got established. And there was just the number of companies that raised that those valuations. I mean, it was hundreds and hundreds of companies. I don’t remember right before O8-09 hit. 06-07 it was a pretty interesting time. I don’t remember those anywhere near those types of valuations. So I think that’s probably the biggest difference, which also means that we now probably have further to fall than what happened in 08-09. Certainly from a valuation perspective, time will tell there’s already some things going on in the broader industry to us precursors to that, but we’ll have to see,

Nick Moran 12:11
Reasonable to assume further to grow on the upswing as well. I mean, you’re reminding me when we started this show back in 2014. This was such a cottage industry, I wish I had the data on dollars deployed at the time, but I do know, unicorns there were less than 20, maybe I mean, it was just a very small number less than the bay area at the time than there are in Chicago today, which is less than 10 years. Astonishing. Right? So, is it reasonable to assume that this is a major asset class going through generational transition that may struggle over the next 48 quarters, but is positioned to be a substantive non cottage industry in the future?

Ravi Viswanathan 12:48
Oh, absolutely. I mean, you’re talking to someone that’s incredibly biased, right? But I’ll tell you, 08-09, if you remember, before that crash, the odds, a lot of folks would even characterize that as the last decade in venture, there’s not a lot of returns, if you really think about it. Contrast that following 08-09 main venture enjoyed almost a decade long glorious spell, not just a deals getting done at higher prices, but tremendous liquidity. And so that’s been wonderful to see. So I think that’s right, I think this reset is very, very healthy. It’s needed. We have to take the pain as we see it, but it will return long term. Hopefully, we won’t necessarily revert back to these astronomical valuations, we’ll settle in at least for a while where it returns, it’s still amazing growth, but it doesn’t get way over its skis, like we probably did in the last two, three years,

Nick Moran 13:36
Ravi, a lot of investors are spending time with the portfolio. In some cases, damage control and cleaning up issues and other cases, just time to focus and kind of help companies navigate this time. And many folks on the program here have suggested that one should spend most of their time with the winners, and yet they find themselves spending most of their time with the companies that are not performing. How do you think about this? Do you agree? And if so, how do you stay disciplined and spend your time on the opportunities that are going to drive the most return potential?

Ravi Viswanathan 14:07
That’s a great question. We actually went through this when I was many years ago, the same calculus where the bottom 20% took a disproportionate amount of time, I think any back then we did a good job of re allocating that. I think at the end of the day, we’re fiduciaries to our LPs and really have to be Darwinian. Now, the funny thing is some of my greatest winners in my history as a venture capitalist, you just the best thing you can do is leave them alone stay out of their way. And so the really elite companies are just so well run that you actually having VCs go in there may be value destructive, but then to your point, I think there are, the way to think about it just what’s the value that we can provide. And spending time there’s a difference between spending time for us a lot of it is, most of it is really about the team because they’re gonna have to figure out the product market fit they’re gonna have to figure out the go to market motion but you know, do you have the right CEO in the seat? Do you have the right product people, great go to market? And that’s where we spend the most amount of our time. And then some of the ones that are just drags me a lot of times we think of them, there are going to be IRR drags in the portfolio, and you have to be a little bit more cold with that and say, You know what, we just have to be thoughtful, you know, the age old adage, at least, decades ago, we love all of our children and venture all of our portfolio companies, you know, I probably have a very different view, just because our job is to make sure we make the best return for our LPs. And that’s going to be very much a histogram of really amazing companies who just want to put more fuel on that fire and help where needed. And then the ones that just aren’t gonna get there, figure out ways to get out of them sell whatever. And then there’s that middle region, we actually have to work it and then at a certain point, you hope that they inflect into the at least it could be really five to 10x and beyond winners, or this just isn’t getting there, and how do you manage them out.

Nick Moran 15:50
You mentioned talent and spending time helping with talent. I’m curious to get your input on this. We had Victoria Trager on the show from Felicis. And they did this analysis of all companies and hiring of commercial leaders. So CROs and B and C and beyond. And I think if found that the CROs hired it Series B 10% of them are around et C, and I think the CRO is hired at C zero were around at IPO, 0%, I think there’s a lot of potential explanations for that. Any thoughts or insights on why commercial leadership talent doesn’t seem to stick from stage to stage?

Ravi Viswanathan 16:28
Yeah, I think that’s a direct byproduct of why we’re VCs, right because of the hyper growth. So if you think about it, the lettering nomenclature, it’s tough to parse through, because what is a series B, Series C, but for example, save a 10 millionaire business and they’re growing two or 3x, for a couple of years, in three years, they could be 10x, what they were before and running a $10 million business as a Go to market head and $100 million business is vastly different. What we’ve seen is, you know, the more you get, the more institutionalize you need to be you focus a lot more on systems processes of far less on what we call hero sales, whereas at the lower end, it’s the opposite of that. So I think it’s just the scalability limitations, and it’s nothing against the CROs. You know, some of my best CEOs, when they do a big financing, it’s the time for them to take stock, like who got you to this point may not be the ones to get you to that exit point. And it’s just, it’s almost like the faster a company grows, the greater likelihood you may have to switch those people out. Sometimes it’s not switching out sometimes they were exceptional, but they reached the scalability threshold, but maybe they can still be in the company in a different one. Maybe it’s not CRO maybe its head of North America, whatever it is. And it’s probably more acute in the go to market function because of, you know, you have such a big organization that you start becoming a leader, a manager or delegator versus kind of on the ground bed carrying sales Rep.

Nick Moran 17:47
Ravi, do you find in the ups and downs that you deal with in the venture journey, every company hasn’t even really strong companies, they have their ups and downs? Do you find that you know, and get clarity after a period of time on which companies are going to emerge as the winners or not? Especially, you know, how do you handle that when the data and the challenges may suggests otherwise?

Ravi Viswanathan 18:12
Yeah, I mean, I wish I had that crystal ball, because I’d be much better investor. I think that a lot of it, I’ve noticed it really comes down to like, for me, the number one quality is just the quality of the CEO. And if I looked at my greatest successes, there was just a cadence of operational and execution excellence. That was one thing. The second thing was the incredible ability for this human to hire. Right? So those two data points for me, I put them together like, Okay, this company is going to be that rocket ship are going to have the best chance to be that iconic market leading company, if I you know, just been fortunate to have a few that I backed companies like MuleSoft and Plaid and some others, that that was kind of a common thread. And the flip side, companies that there’s execution mishaps, it’s a revolving door on whatever, revolving door on go to market or executive leadership, those are the ones and it’s not to say that you can’t break out of those cycles, but those are the ones where there’s a much higher risk that will become, you know, on a good day, maybe a solid company, not a blow away company.

Nick Moran 19:15
Over the past couple of years, especially during the peak hype cycle. We’ve seen a number of startups trying to become super apps within their markets. Of course, we’ve seen some recent notable failures FTX that had to do with some ethics, of course, as well, but also things like on deck and many others that you know, tried to take on a lot and had a huge vision out the gate and tried to execute against that vision really early and made me realize that it’s hard to make progress against so many fronts. Why do you think the Super App approach has kind of become the rule and also attracted the most funding as opposed to the exception? And do you think we’ll see a return to more focus and building more narrow focus solutions with positive unit Economics early on versus selling, you know, this huge vision based on Tam and capturing that in a very short period of time.

Ravi Viswanathan 20:09
I think there’s hope that it’ll return back to some normalcy. I think this whole Sabra phenomena, however you want to classify this more of a vicious cycle that these companies raise massive amounts of capital at massive valuations, their base business couldn’t justify the growth rates and scale for these valuations, they already and as such, they raised a lot of capital to start flooding, using that capital, sometimes indiscriminately, to try to fund these adjacencies and what you call a super app, it’s almost a justify it’s a vicious cycle, justify the capital raise justify the valuation, right? Well, those days, at least for the foreseeable future are gone. And I think some of these lessons, you know, they’re hard, especially for the investors, they’re brutal. But like for the broader market, it’s actually net healthy, just because it just lets people know, you know, fundamentals actually matter. Execution really matters. And so the flip side of that you could see a company do really well executing on this plan. And maybe they can become a 3 to $5 billion company, but to become a 10 to $20 billion company they need to expand, but how do they expand? Do they raise a bunch of money and figure out the plan? Or do they have a plan, maybe it’s acquiring another business that expands your tam or starting with proof points, there’s just a lot of our companies have done it. It’s absolutely doable. You just have to be thoughtful, and really fundamentals versus massive amount of capital. And let’s just hope that we can sprinkle some pixie dust in our work.

Nick Moran 21:32
So we’ve seen a big drop in funding over the past quarter year over a year versus last year about a 53% drop, massive layoffs occurring. I think we’ve seen 700 startups have laid off 93,000 workers just this year, according to Aaron Griffith at New York Times, and over the past two weeks weaker quarterly results from big tech companies. And now, you know, Meta and Amazon and others are laying off. So it seems like we’ve got some further room to fall in the greater tech market as well as the early stage startup market. Ravi, is there a silver lining here? Or is this blood in the water gonna just create a lot of heartache and challenges on people’s wallets over the coming couple of years?

Ravi Viswanathan 22:15
Well, I think all of the above is true. But I absolutely think there is a silver lining. I point to January 2016, when on a Friday, I think it was LinkedIn and Tableau Public companies, their market cap got cut in half, which is a pretty gross overreaction by the public markets. But that in the SAS market really chilled out the markets for a few quarters right now, that reset was nothing like what’s happening now, which is a lot more broad, deeper. It’s just one of those things where we’ve just enjoyed such a ridiculous stretch of up, it’s like it’s a credit card that just got bigger and bigger. And the bills have come due, it’s come due very abruptly, and in some ways catastrophically for companies, but now you’re just seeing a lot more discipline unit economics, you know, we’re a big proponent of efficiency, growth versus capital base growth, capital base growth, basically just pouring as much capital as you can for growth, efficiency based growth is really paying attention to unit economics, right, the value of every dollar you invest. I think that’s coming back into vogue, that’s very healthy. In venture, it’s healthy until it’s not. So we’ll see how long this trend lasts. But I do think there is a silver lining here. And certainly, obviously, on the valuation side, we’re seeing a new deal activity, it’s a lot more muted and measured some situations almost over rotation to really conservative, but I think that will net out over the next few quarters.

Nick Moran 23:32
Does this indicate there will be greater opportunities in the secondaries market? Should we expect lots more activity there? And many of these logos trading hands?

Ravi Viswanathan 23:41
I think so because you have a lot of venture firms that raised a lot more capital much faster, and had an approximation of what their liquidity would be. That’s blown up, right? Not very little this year, probably very little next year, maybe even 24. So they need to get liquidity. So I think there’s gonna be opportunity, but also a lot of these companies were hoping for an exit. And you have employees that have been there 3, 5, 10 years. So they’re going to need liquidity as well. So this broad base liquidity, I think you’re definitely going to see a lot more of, obviously, it’s always in these situations, kind of a bit s spread on valuations. But that is also getting sorted through pretty quickly. I’ve noticed,

Nick Moran 24:18
Ravi, what advice would you share with founders that are facing this difficult capital raising environment for the foreseeable future?

Ravi Viswanathan 24:25
Yeah, I think a lot of it, what I would say is just managing this three party tension of burn, growth and valuation. So everyone’s really going through the resetting their numbers for next year. So they’re growing less than what they’ve projected, hence, maybe tougher to justify the valuation. The easiest thing to do is relax one of the constraints, relaxed valuation, one of the stories and I don’t know the specifics but Square went public whenever they did 8 to 10 years ago. And I think they went public at half the value of the last private round and they just got pounded in the media. And then very quickly, they just kept executing. It was an incredible company and They blew through that. And so it was a great lesson. So I would just say relax evaluation constraint, really focus on the burn. And COVID taught us, you know, that least that 2020, or there was some fits and starts on growth, right, you don’t need to grow 100% and burn 200% Figure out something that is more measured, and also consistent with your investor group and your board. That’s what we’re telling all of our companies. But also, I would say, after you do that, use this and embrace this market go on the attack, one of my favorite CEOs said the 12-18 months following a downturn is some of the most profitable times for a startup. Because that’s when you can really capture market share from your peers, because they’re probably flat footed, probably trying to figure out what to do. But if you have your wits about you, or your focus, your discipline execute, you can actually make up a lot of ground in that ensuing period.

Nick Moran 25:49
Ravi, I know that you don’t position yourself as an expert in crypto, and it’s not a key focus area for your firm. But with the news of FTX, just this week, and everything that’s happened there, we’d love first your input on that situation and what you think the breakdown was, if you think the investors have some culpability. And then maybe we’ll talk about what’s next for crypto after that.

Ravi Viswanathan 26:12
It’s really difficult. So we don’t spend a lot of time partially because we just saw the hype cycle is something that we just couldn’t get our arms around. And in the past those hype cycles, many of them end okay, but most of them don’t. And so that’s why I’d say that, but I would say that in the moment, FTX, we saw in the last week was definitely not what the investors saw, right, I heard some reports that the company was scaling revenue, and scaling profitability. And when you hyperscale revenue are insanely profitable. The physics of those types of businesses is rarely seen. And I think one investor said and they’re in the business of taking and managing risk. So the culpability to meet every investment that goes wrong, it’s on the VCs, it’s on me, the ones we do wrong, that we make a mistake on. So, yeah, at a base level, sure. But it’s tough to really double click on at the moment what that decision making was like, I will say that it’s far reaching, because there’s a lot of well regarded investors in that cap table. But there’s also just in crypto, broadly, just a lot of firms that just literally overnight, they started and they just have not seen anything, really. And so I think that there is going to be a big reset, we experienced it 15 years ago, kind of clean tech 1.0 and it was wasn’t a fall like this. And it wasn’t anywhere near the ethical issues. But it was a pretty much a disaster broadly speaking except for Tesla and a couple of others. But what happened is it’ll evolve. And there are a lot of smart folks that think there’s something here that we don’t do a lot of crypto, we have some blockchain investments, but we didn’t go in because of blockchain when because the use of that technology gave them a product market fit that was exceptional compared to their peers. That’s that’s how we think about it. So I think there’s gonna be a reset, you’re gonna get that backlash, and then you’re gonna start seeing probably a lot more controls, I think there is something to be said, when you have such big rounds at such big prices. No matter how much you invest, you have such a small percent ownership that necessarily doesn’t justify a board seat. But I think you’re gonna see where the silver lining your assets are, like silver lining is these companies get funded with real boards of investors and company builders and independence, where you can go on that normal path that venture has experienced for decades and decades. And there could be in five years from the ashes coming from this 3, 5, 10 years from now, fundamental companies, who knows?

Nick Moran 28:28
I mean, it’s odd to see what was one of the darlings of the valley that was growing faster than any other company that did not have a board and also had some pretty notable names involved. Unusual. I mean, it begs the question, investors worried about some liability on this one, or just kind of along for the ride? I don’t know.

Ravi Viswanathan 28:47
Yeah. Yeah. I mean, it’s a failed investment, what they saw, I think we just don’t know what they saw at the time of investment. Right. I don’t know the pitch deck. And the pitch deck probably had a real business. And there were some other stuff that was happening that maybe was known or not, I couldn’t tell you, just go show, that’s why we steered clear of the space but along the way, probably missed out on some winners as well. So they’re both sides of the same coin.

Nick Moran 29:13
Tough one to figure out exactly what the logic was there. It doesn’t seem reasonable that the VCs would put money in if they were worried about liability. But then questionable things going on over here at new stack, we tend to avoid the things we don’t quite fully understand, until we have the expertise.

Ravi Viswanathan 29:30
Good strategy.

Nick Moran 29:32
Ravi, if we can feature anyone here on the show, who do you think we should interview and what topic would you like to hear them speak about?

Ravi Viswanathan 29:38
Well, I’m biased because I started my own firm four years ago, and I really gravitate towards what I feel are great founders of firms that I can learn from. So I’m pleased to call these folks friends and actually mentor so Andy Rackleff, from the founders of benchmark just loves spending time with him just how he built benchmark just their philosophy really didn’t listen to the herd. I thought that was really interesting. And then the other side on the private equity side is there’s firm called Francisco partners and DJ Dad, who’s who runs it, you just find folks that just like great founders of companies, these are great founders of venture firms. And they just did things differently. And there were tough moments and great moments, and they just kind of had a lot of conviction and how they wanted to build a best in class firm. And they realize that conviction, which always impresses me.

Nick Moran 30:28
Amazing! Any resource out there that you found really valuable that you would recommend the listeners?

Ravi Viswanathan 30:33
We’ve got folks who were growing firm, and some of the folks have less venture experiences that we heard, sometimes. And so one of my favorite books on just ventures, I’m sure you know, the power law, Sebastian Mallaby, there’s a lot of books on venture in the history of venture capital. This is probably the best one that I’ve read. It just really charts back from the Shockley Fairchild days, all the way to current days, and just really, really well done. So that’s found to be really helpful.

Nick Moran 30:59
Ravi, do you have any tools or hacks that are a secret weapon?

Ravi Viswanathan 31:03
No, I can’t say anything really thoughtful. It’s just time efficiency is really important to me. So we have youngish kids. So getting up super early, and having several hours to myself, that’s been super helpful. And the other is, I travel a lot and what’s been really helpful is during my flights, I use that, funnily enough, I’m flying at 35,000 feet, I use that for 35,000 50,000 100,000 feet thinking meeting strategic thinking about deals or sectors or team or firm. And that is a luxury that you don’t normally get when day to day, you’re just going from meeting to meeting and company to company. So that I found that to be so I would just encourage people carving out time for really like abstracting to a very high level strategic thinking I found to be really powerful.

Nick Moran 31:50
And finally here, Ravi, what’s the best way for listeners to connect with you and follow along with New View?

Ravi Viswanathan 31:55
We have a website but my LinkedIn profile, reach me there, reach me at New View as well. So happy to chat with you.

Nick Moran 32:02
Well, sir, thank you for the time. This is a true pleasure and looking forward to doing it again.

Ravi Viswanathan 32:06
Thanks so much, Nick. Really enjoyed it.

Nick Moran 32:08
Take care.

Ravi Viswanathan 32:08
Take care.

Transcribed by https://otter.ai

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