This Week in Startups E40: “Angel” Podcast: Jeff Richards, Managing Partner at GGV Capital shares lessons for founders & investors from 2008 recession & Dot-com bust, criteria for taking on venture debt, valuing companies in a down market & more
Apr 1, 2020
In a compelling discussion, Jeff Richards, Managing Partner at GGV Capital, shares insights from his extensive experience navigating crises in the startup landscape. He reflects on lessons learned from the 2008 recession, emphasizing the importance of a level-headed approach for founders. Jeff advises on taking venture debt and pricing strategies in a fluctuating market. He also explores the dynamics between board members during turbulent times, advocating for effective guidance to help companies pivot successfully. Ultimately, he remains optimistic about tech's resilience and future opportunities.
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Independent Board Member Value
- Independent board members provide objective advice, balancing investor interests with company needs.
- They prioritize the long-term health of the company over short-term gains or capital preservation.
Valuation Adjustments
- Founders should adjust valuation expectations with market shifts.
- Prioritize securing funding with clean terms over maintaining high valuations during uncertainty.
Liquidation Preferences
- Avoid raising money with complex terms beyond 1x liquidation preferences to maintain alignment.
- Funky terms create misalignment between investors and management, especially during downturns.