Tag: svb
On Tuesday, David Cohen (Techstars co-founder/chair) and I did an AMA for Techstars founders about the SVB crisis. The team at Techstars turned it into a podcast for our Give First series.
The teaser from the podcast follows:
The fall of SVB will go down in history as one of those ‘where were you when …’ moments. For David Cohen, he was sitting at a sporting event when his phone began buzzing incessantly. For Brad Feld, he was couch shopping with his wife.
Feld is no stranger to crises and his instincts kicked in quickly.
“I shifted into problem-solving mode,” says Feld.
But then, almost as quickly, the government stepped in and money began flowing. Crisis averted. It was time to reflect.
Listen as Feld and Cohen share insight into what they saw in the VC and startup community, how communication made all the difference and how many came together to support each other.
They also tackle the looming question weighing heavy on founders’ minds: how will this affect the future of startups.
As for the couch? Tune in to find out.
Since the middle of last week, there has been extreme stress on founders, startup leaders, and the extended startup community. This stress accelerated on Friday when the FDIC shut down and took over Silicon Valley Bank. By late Friday, anyone who banked with SVB was concerned about … well … everything.
Once it became clear that payroll accounts needed to be funded on Monday to make Wednesday’s payroll, we focused on the immediate short-term to ensure our portfolio companies’ thousands of employees got paid on time. We bank at SVB, so our maneuverability was also unknown, so we searched for what I’d consider heroic options from various sources.
While this de-escalated on Sunday night after the US Government took decisive action, the level of stress and anxiety, especially for first-time founders, was extreme. I had many 1:1 conversations, emails, and messages with our portfolio company CEOs, along with several open Zoom lines where people could ask questions and just commiserate and feel part of a shared community. Much of this focused on addressing the immediate problem. But, many founders told me that just feeling part of a larger community was helpful.
Much will be written about this. Maybe I’ll get around to my version someday.
But, once again, I saw and experienced the extreme stress and anxiety that founders, CEOs, and leaders of startup companies face almost daily. It reinforced the importance to me of continuing to help destigmatize mental health (and mental fitness) issues across the startup community.
Yesterday, Aaron Gershenberg, a long-time friend and LP of ours from SVB Capital, emailed an introduction to Naveed Lalani, Founder & CEO of Pioneer Mind. Naveed has launched a Founder Mental Health Pledge for Investors and Startup Leaders.
He’s announcing the first supporters tonight. Foundry is supporting it as a firm, and I’m supporting it personally along with my partner Jaclyn Hester.
If you are interested in signing Founder Mental Health Pledge for Investors and Startup Leaders, please email Naveed at naveed@pioneermind.com
The pledge follows:
We make a commitment to take an active role in encouraging mental healthcare for founders and the greater startup community.
We pledge to encourage the founders we partner with to invest in their personal mental health and build a workplace culture that promotes mental health.
Ensuring the mental health of founders and their teams is crucial and leads to the highest probability of startup success. We pledge to be supportive of founders treating the direct cost of caring for their mental health as a legitimate, worthwhile, and encouraged business expense – including therapy, coaching, group support, and app-based solutions. Founders should look at their mental health as a business priority.
Today Silicon Valley Bank (SVB) announced their support for Global EIR, a cause for which I care deeply. As you may know, over breakfast in 2015 Jeff Bussgang and I launched Global EIR with the hope of advancing the startup visa effort on a local and state level after it stalled in Congress.
Since then, Global EIR has grown to 13 university programs across the country, helping 42 international founders start companies. These companies have created 123 new jobs and raised $29.9 million in investment for the US economy. And there is still an overwhelming demand of visionary international founders that want to start companies in the US. If Global EIR can raise $300,000 this summer, they can scale rapidly over the next 18 months, with an ultimate goal of helping over 10,000 founders per year.
In response to this opportunity, SVB is joining Amy and me in a match challenge to raise $300,000 for Global EIR. For every $1 you donate up to $100,000, Amy and I will donate $1, and SVB will donate $1 on top of that. So – your $1 donation gets a $2 match.
I’m grateful that SVB sees in Global EIR a way to unlock the potential of the next generation of great founders, no matter where they were born. The entire team at SVB is unique among banks in their willingness to make bets on behalf of founders and startups and are often the first stop when a startup needs banking services. What makes this even more impressive is how quickly and consistently the startup community reinvents itself, yet SVB is always there to make a good first impression on new founders.
For these new founders, many were born in other countries and came to the US for a variety of reasons. For some, education brought them here. Others came to turn a great idea into a startup and ultimately into a world-changing company. Like SVB, the world’s founders know that the US has the right ingredients of capital, talent, and a culture that celebrates risk-taking. However, despite over a dozen countries creating visas to attract international founders, the US still does not have a startup visa.
When I reached out to long time friends at SVB, including Pamela Aldsworth and John China, they immediately were supportive of the idea of Global EIR. SVB had previously supported the Global EIR program in Boston with the University of Massachusetts, so I was delighted when they jumped on the opportunity to join a fundraising match with me across the entire country. It turns out that SVB’s general counsel, Michael Zuckert, is passionate about this issue and will be joining the Global EIR board.
Through Global EIR, universities run programs that help international founders obtain a visa, stimulate entrepreneurship at their universities, and unlock economic development in communities across the US. Global EIR supports programs throughout the US, currently ranging from Anchorage to Boston and seeks to expand to everywhere in between. We want to ensure that the world’s best and brightest founders continue to see the US as the best place to build their businesses and create jobs.
As many of longtime readers know, I’ve long been supportive of the startup visa. In 2009, I was inspired when two of the ten Techstars Boulder companies that year had international founders. With a startup visa, their promising companies would have an easy immigration pathway to create American jobs. Without one, they struggled to manage their visa status while also building their businesses. It should have been trivial for them to stay in the US; it wasn’t.
As with the entrepreneurs Global EIR helps, the organization began as a chaotic startup with Craig Montuori and Chris Nicholson leading Global EIR over the past two years. They learned a ton with our pilot schools UMass, CU Boulder, and SJSU. We were fortunate to have great partners in Bill Brah, George Deriso, and Anuradha Basu to help us figure this out to the point where we are now ready to scale to all 50 US states.
When we decided to have Global EIR go through the Techstars Boulder earlier this year as a non-profit, our goal was to get them ready to scale up. The experience of Techstars Boulder exceeded all expectations, and it’s great to see the Global EIR team start to take things to the next level.
For my VC friends, every time you invest in a brilliant immigrant founder, consider joining me and SVB in supporting Global EIR so that the next immigrant founder can have the chance to pitch to you. Email me and let’s talk about how to partner together in this work.
If you are a foreign entrepreneur who wants to build your company in the US, also email me, and I’ll connect you to the program.
On Thursday March 6th I’m doing my first public talk about my newest book – Startup Boards: Getting the Most Out of Your Board of Directors.
If you’ve got a copy, bring it and I’ll sign it. If you don’t have a copy, our friends at Silicon Valley Bank have sponsored one for each of you. But don’t be bashful, every good writer loves it when you buy a book also, even when he gives one away.
Since this is the first time I’m giving a talk on Startup Boards, it’ll be an alpha talk. It’ll be rough. I’m trying out some new material. And I’ll be looking for a lot of feedback from anyone who attends – either directly or by email later – about how to make it extra special great.
I probably gave my talk about Startup Communities 20 times before I hit my stride. The feedback that I got along the way was extremely helpful. So, in addition to learning something and getting a free signed book, you’ll be helping me out.
Also, everyone who attends will get a second extra special gift. It’s a surprise, so you’ll have to be there to learn about it.
You can sign up for the event at the Silicon Flatirons event page. Or hit the big Register Now button at the top of this post.
Last night I gave a talk hosted by SVB at their Palo Alto office. It was part of the “Never Ending All Old Is New Again Venture Deals Book Tour.” I had a ton of fun talking to and answering questions from about 75 entrepreneurs who – at the minimum – enjoyed eating the great food and wine that SVB provided on a luscious evening in Palo Alto. Oh – and I signed a bunch of copies of Venture Deals.
Several questions came up about Convertible Debt. We touch on it in Venture Deals but realized that we didn’t cover it in enough depth so Jason recently wrote a Convertible Debt series on Ask the VC. The series is now complete – here are the links to the posts in order.
- Convertible Debt Series
- Convertible Debt – The Discount
- Convertible Debt – Valuation Caps
- Convertible Debt – Conversion Mechanics
- Convertible Debt – Conversion In A Sale Of The Company
- Convertible Debt – Other Terms
- Convertible Debt – Warrants
- Convertible Debt – Early Versus Late Stage Dynamics
- Convertible Debt – Wrap Up
If you feel like we missed anything, or got anything wrong, or were confusing in our explanation, please chime in on the comments on the post. If you want to see an actual convertible debt term sheet or the actual legal documents, take a look at the TechStars Open Sourced Model Seed Financing Documents.
As a bonus to the evening, I got some direct, constructive feedback from one of the attendees via email later that night. While the “thank you” and “good job” notes are nice, I only learn when someone criticizes me (hopefully constructively, but I can handle it in any form.) The feedback was:
May I make a constructive criticism regarding your talk tonight? Your answers to audience questions tend to be overly long and rambling…..you “overanswer,” to invent a word. You start strong and respond right to the essence, but then your focus blurs and you keep taking verbal baby steps away from the thought stream. If you trim a minute or two off each answer, you can call on more people and hear more questions, which sends more people home happy. I think if you self-critique a video of yourself in a Q&A session, you’ll arrive at the same conclusion.
It’s a good suggestion. I often try to provide additional context to the question, but it sounds like – at least for one person – I went off on a few space jams that weren’t additive. I love the phrase “overanswer” – it’s a lesson from TV interviews 101 (e.g. just answer a question – any question – quickly). Something to ponder as I continue the Never Ending All Old Is New Again Venture Deals Book Tour.