HOW WE'LL BUILD

In the pandemic’s early days, celebrated investor Marc Andreessen wrote an essay about the power of entrepreneurship. “Every step of the way, to everyone around us, we should be asking the question, What are you building?” he wrote. “What are you building directly, or helping other people to build, or teaching other people to build, or taking care of people who are building?” On the following pages, entrepreneurs offer their answers.

What Investors Want Now

Some say it’ll be harder to raise money. Some say there’s no difference. But this much seems clear: No matter what, investors’ expectations have changed.

LIZ BRODY

Pitching investors was difficult before—and now? “Fasten your seatbelts; it’s going to be a bumpy ride,” warns a report from the National Venture Capital Association (NVCA). It predicts that for the next several quarters, VC firms will struggle to raise their own funds, which means less cash to deploy to entrepreneurs.

But Anna Whiteman is more optimistic. She’s VP at Coefficient Capital, a firm that focuses on digitally powered consumer brands (Hydrant, NomNom, Just Spices). Even if the road is bumpy, she says, it’s heading into exciting territory. But to start, entrepreneurs will need to think differently about growth.

You read that NVCA report. How do you think COVID-19 will affect investors in general?

I really don’t think it should cause too seismic a shift in the amount of capital deployed—just the manner of deployment. The rate of investing, at least at our level, Series A and Series B, won’t really change. I think you’ll see perhaps a bit of a pullback at the seed stage, where it’s a little more risky. One interesting thing we’re seeing across the investment landscape is that where growth was initially prioritized, now there’s a shift to profitability.

The past decade has been so much about Silicon Valley making things efficient. What kinds of startups are getting VCs’ attention now?