February 1, 2021

The Upside of Venture Capital's Slowdown

A summary of one of our favourite blog posts from Kara Swisher.

Founder Resources

Text Link

Summaries From the Masters

Text Link

Kara Anne Swisher is a prominent American tech-focused journalist. She has covered the business of the internet since 1994.

This is a transcription from her podcast Pivot with Scott Galloway.

Let's explore the most important takeaways.

The Changing Venture Landscape:

Venture capital has experienced explosive growth in recent years, leading to many startups with inflated valuations. However, as interest rates rise and the market adjusts, companies are finding it challenging to maintain their growth and valuations. Galloway advises VC firms to be cautious and patient in this changing landscape.

Opportunities in Tech-Enabled Services:

Despite the slowdown, Galloway sees potential in tech-enabled services. He cites the example of Zero100, a company focusing on supply chain innovation, as an attractive investment. Rather than aiming for a massive public valuation, Galloway suggests that building a strong, sustainable business over time can lead to profitable exits.

The Importance of Revenue:

Galloway emphasizes the importance of revenue for startups. He advises entrepreneurs to focus on finding customers who are willing to pay for their products or services from the start, as this approach can create enduring value with lower risk.

A Shift in Mindset:

Swisher and Galloway discuss the need to let go of the "boom" mentality prevalent in the tech world. Instead, they advocate for a more sustainable, slow-growth approach to building businesses. This mindset shift can lead to more stable, successful companies in the long run.

The venture capital landscape is changing, with higher interest rates and a slowdown in growth. However, this shift presents opportunities for entrepreneurs to focus on building sustainable businesses with strong revenue foundations. By embracing slow growth and prioritizing tech-enabled services, startups can achieve long-term success.

You can read the full transcript here: https://nymag.com/intelligencer/2023/02/the-upside-of-venture-capitals-slowdown.html