When there's market uncertainty—say, caused by the government closing down for business until further notice—venture capitalists can be found doling sage advice to portfolio companies to help them navigate any volatility ahead. Days into the U.S.'s first government shutdown in 17 years, the thoughts Fast Company has collected from venture capitalists vary from the nonchalant to the mildly worried.
Matt Harris, managing director at Bain Capital Ventures, is hoping humor is guidance enough.
I’m planning on dusting off my "RIP Good Times" slideshow and sending it around.
Salil Deshpande, managing director at Bain Capital Ventures, tells startups to keep plowing ahead.
Focus on your work and don't get distracted by the side show.
Jules Maltz, general partner at Institutional Venture Partners, suggests startups raise capital now.
Mark Leslie, former CEO of Veritas Software, is famous for the quote, "Cash is oxygen and oxygen is life." Companies don’t go out of business because the product fails—they go out of business because they run out of cash. You can never accurately predict macroeconomic cycles, but you can make sure you have enough capital in your bank account for both sunny and rainy days. We’re encouraging our companies to raise plenty of capital now before they need it and focus on creating lasting, sustainable businesses.
Andrew Farquharson, cofounder of VentureHealth, recommends startups plan ahead to avoid missing any deadlines.
It’s important for companies in medicine and biotech to stay on top of the FDA. The FDA will lose over 6,000 employees, which is about 45% of its staff and will only be publishing regulations that are related to "imminent threats to the safety of human life or protection of property." So it’s critical that companies stay vigilant to avoid postponing any launch timelines and worrying investors.
Jeff Richards, partner at GGV Capital, says companies that sell to government agencies should expect delays and a soft fourth quarter—depending how long the shutdown lasts.
We certainly have companies that sell to government agencies. We expect to see bookings in revenue impacted in Q4. If people literally aren't in the office, they're not going to be buying technology products or signing contracts. It wouldn't shock me to hear [portfolio companies] say, 'Hey, we're going to have some softness in Q4.' Our advice to CFOs and VPs of sales is to plan for it accordingly. If you project a deal will close in Q4, it may not close until Q1. I think if the shutdown is just a day or two, it's probably a minimal impact. If it's for several weeks, it could be significant.
Lastly, founder of Ribbit Capital Micky Malka, who is from Venezuela and has investments in Brazil and Argentina, thinks everyone is freaking out over nothing.
I think it's business as usual. We have investments in countries where the government is shut down every other week or sees inflation of a couple hundred percent in the same month. . . . I think if you're not selling to the government, you should focus on business as usual. There's nothing you can do about it. It's out of your control. It's not like we have no electricity or water, or there's a national shutdown of the grid, or the Internet went down.
[Image: Flickr user KAZ Vorpal]