I had the pleasure of chatting with Harry Stebbings of 20VC about the current macro environment. In this far ranging conversation we discuss why a recession is the most likely outcome and what startups should do about it. I also explain how FJ Labs is investing through these market conditions, how we think about our rate of deployment, what segment of the market we’re most excited about, and how LPs should respond to these unusual times.
20VC is one of the largest media assets in venture with over 100M downloads and guests including Daniel Ek, Bill Gurley and Doug Leone to name a few. 20VC is run by Harry Stebbings, last year Harry raised $140M to build the next great financial institution at the intersection of venture and media. 20VC’s early portfolio includes 9 unicorns from Linktree, Clubhouse, Hopin, Remote.com, AgentSync, Nex Health and Sorare to name a few.
For a preview of the video:
In Today’s Episode with Fabrice Grinda:
1.) Everything Great Starts Small:
- How did Fabrice make his way into the world of investing from founding 3 companies?
- How does Fabrice feel about founders raising funds with external LPs?
- Why does Fabrice feel that investing as an angel made him a better CEO?
2.) WTF is Going On: The Market Today
- How does Fabrice assess what is happening in the market today?
- What is causing the massive public market drops we are seeing?
- How do inflation rates and interest rates have such an impact on where we are?
- How much of this is a result of COVID, the shift to goods from services and supply chains?
3.) The Optimistic Case:
- How does Fabrice think things could get better from here? What needs to happen?
- What could the Fed do to enable this optimistic outcome to take place?
- What would need to happen in geo-politics and Russia for this to happen?
- What is the probability today of this optimistic case happening?
4.) The Great Stagnation:
- How does Fabrice think the economy could go sideways from here?
- What are the core drivers of this?
- Why is this the most likely outcome of all? What is the probability of this happening?
5.) The Catastrophe:
- How could this market get so much worse?
- What level of interest rate change would cause this outcome to occur?
- Why does Fabrice think that Switzerland is a "House of Cards”? What would this mean if Switzerland fell? What other European countries does Fabrice think are vulnerable?
6.) What this Means for Venture:
- How will LPs respond to these differing situations?
- How does this impact how Fabrice thinks about his rate of deployment?
- What segment of the market is Fabrice most excited for; early or growth?
Mentioned in Today’s Episode with Fabrice Grinda:
Fabrice’s Favorite Book: Sapiens: A Brief History of Humankind
In addition to the above Youtube video, you can also listen to the podcast on: