How Many Investors are Still Writing Checks During Coronavirus? One VC is Trying to Find Out
Ben Bergman is the newsroom's senior reporter, covering venture capital. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks. Follow him on Twitter.
When Laurent Grill, lead investor of the Santa Monica early stage venture fund Luma Launch, started emailing hundreds of fellow investors to see if they were still writing checks amidst the coronavirus pandemic, he was originally trying to find the next round of capital for one his own portfolio companies. But on Tuesday he decided to broaden his search and posted a query on LinkedIn.
"I reached out to hundreds of funds & am compiling a list across sectors and stages to help identify active investors in a time that is a bit unknown for all of us," Grill wrote.
Within hours, the post had gone viral.
"It's pretty overwhelming because I'm not an influencer," Grill told dot.LA Wednesday. "When I posted this, I didn't expect to have 500 notifications. My email box is unmanageable right now."
Grill quickly created Google forms to manage the rush of responses, one for investors and another for companies seeking capital. He plans to release the list next week.
"You had founders who are freaking out because their assumption is no one is investing." Grill said. "But investors are investing."
Luma Launch's Laurent Grill is cautiously optimistic about the state of VC investing.
Of the 150 responses he's received, only two investors have said they are not writing checks. They both wanted to see public markets stabilize before they jumped back in.
However, Grill sees the results as suspiciously positive, especially when investors insist that everything is "business as usual" amidst one of the most serious public health and economic crises of the last century.
"Something is off about that," said Grill. "I don't trust it."
He suspects deals have significantly declined, though no one wants to completely shut their doors. There are optics to consider and also the fear of overlooking the next great unicorn. "We live in an industry of FOMO, because if people aren't investing they are worried they are going to miss a deal," Grill said.
Ironically, Grill's Luma Launch, which he leads along with Matt Lydecker, is one of the firms that has paused investing. He says he wants to focus on getting their portfolio companies' house in order before deploying new capital.
"Our companies are dealing with how they're going to hit payroll," said Grill. "We have one company that has a case of coronavirus in it."
Grill says Luma is unique because it is corporate-backed and does not have a fund it has to deploy in a given timeframe. Founders needing money should find it somewhat reassuring that most firms still need to deploy their capital, though Grill worries about what conditions will look like in six months to a year from now when firms have to fundraise from limited partners who could have taken a severe hit in a broader economic downturn.
"If LP's are hurt, we're probably going to be looking at a long time before there's liquidity for fundraising," he said.
For now, Grill is focused on connecting founders and investors in the immediate crisis who might have a harder time meeting each other with offices closed, conferences cancelled, and face-to-face meetings postponed indefinitely.
"There's no benefit for me to do this, other than to help the community," Grill said. "We need people to step up who have the ability to step up."
- cov1d-19 - dot.LA ›
- Could Coronavirus Push the U.S. Economy Into a Recession? ›
- Investing in Uncertain Times: How VCs and COVID-19 - dot.LA ›
- Investors and Health Tech on the Front Lines of the Pandemic - dot.LA ›
Subscribe to our newsletter to catch every headline.
Snap shares soared after CEO Evan Spiegel touted the company's highest Q3 growth rate since 2017. The outspoken executive used Tuesday's earnings call to highlight the social media platform's efforts to engage users "following the murders of George Floyd, Ahmaud Arbery and Breonna Taylor."
The upbeat earnings report sent its stock soaring 20% in after-hours trading.
- TikTok CEO Promises More Transparency, Jabs Facebook for ... ›
- Meet Snap's New Class of Yellow Accelerator Program Startups ... ›
- Snap Cancels Its Snap Partner Summit, Adds New Board Member ... ›
- LA Tech Updates: Jukin Media Gets a New Co-CEO; Snap Expands ... ›
- snap launches bitmoji tv - dot.LA ›
- Snap Releases Dismal Diversity Report - dot.LA ›
- Snap Beats Expectations, Up 17% Year Over Year - dot.LA ›
VENN leveled up in its quest to become the 24/7 streaming network for gaming on Tuesday, announcing it has closed a $26 million Series A financing round. The Playa Vista-based company has also turbocharged its leadership and distribution network.
The Videogame Entertainment and News Network launched in August with $17 million in seed funding. That round was led by Bay Area gaming fund BITKRAFT, which also co-led the Series A — this time with Nexstar Media Group, a NASDAQ-listed telecoms company headquartered in Irving, Texas.
- L.A.-based Genies is expanding beyond creating and managing avatars for celebrities; consumers can now create their own avatars on partner platforms that use Genies' software development kit.
- Initial partners are Gucci and Giphy, with more expected in the coming months.
- Genies' pivot is an effort to capitalize on the 'digital goods economy' and the ascendance of the metaverse.
Justin Bieber made Crocs cool again earlier this month, when he partnered with the footwear company, known more for function than fashion, to release a limited edition pair that reportedly sold out in 90 minutes.
Imagine now that those shoes were meant to be worn not on human feet, but on the pixels of a consumer's digital avatar.
This is the vision of L.A.-based Genies, which announced Tuesday it is now integrating its avatar-creation technology into other companies' digital platforms via an updated software development kit (SDK).
Genies CEO Akash Nigam.
Courtesy of Genies
- Survios Creates Its First non-Virtual Reality Game - dot.LA ›
- MaC VC Details its Investing Strategy for the Metaverse - dot.LA ›