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20VC: Upfront’s Mark Suster on COVID Redefining What A Great Company Looks Like and What Valuations Look Like, Why Pay-To-Play Is Back On The Table & Why We Will See The Death of Party Rounds

Apr 20, 2020

Mark Suster, Managing Partner at Upfront Ventures, shares his insights on the changing dynamics of venture capital post-COVID. He discusses how valuations are evolving and the potential resurgence of pay-to-play funding. Mark emphasizes the need for startups to adapt their marketing strategies and reassess costs in light of new economic realities. He warns of possible pitfalls for venture firms that have expanded too quickly, advocating for smarter reserve allocation. With his rich background as a founder, Mark provides a unique perspective on navigating uncertain times.

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ADVICE

Negotiating Discounts

Accept that renegotiations and lower prices are inevitable in the current economic climate.
Get something in return, such as a contract extension or stronger relationships, during renegotiations.

INSIGHT

Software Contracts

Many software customers overpay for licenses they don't fully utilize.
Companies should prepare for renegotiations and potential downsizing of contracts.

INSIGHT

Redefining Success

The definition of a successful company will change.
Growth at all costs isn't the only winning formula; survival and strong momentum matter.

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Mark Suster is the Managing Partner @ Upfront Ventures, one of LA's leading and largest venture firms with a portfolio including the likes of Bird, GOAT, Maker Studios and Ring.com to name a few. Prior to joining the world of venture, Mark was the founder & CEO of two successful enterprise software companies, the most recent of which was sold to Salesforce.com where Mark became VP, Products. Mark is also the author of one of my favourite industry blogs, Both Sides of The Table.

In Today’s Episode You Will Learn:

1.) How Mark made his way from founding enterprise companies to joining "the dark side" of venture with his move to Upfront?

2.) How does the current economic landscape change the world of B2B? How will renewals be impacted? How will customers approach discounting? Similarly, how will the world of B2C be impacted by COVID? How does this impact marketing and ad spend?

3.) How does Mark think about reserve allocation today with Upfront? How does that change in the face of COVID? Why does Mark believe this environment will redefine valuations? How should founders respond in the face of heavily changed valuations?

4.) Does Mark believe we will see a graveyard of new venture firms who have deployed too quickly and have too many hungry mouths to feed? How does Mark think about building temporal diversification into the portfolio? How can managers use reserves more intelligently moving forward?

5.) Does Mark agree with the Twittersphere that VCs remain "open for business"? How will we see deal volume impact? How will we see size of transaction impacted? What is the most important role a VC can play today? How will the M&A market also be impacte din the face of COVID?

Items Mentioned In Today’s Show:

Mark’s Fave Book: Disunited Nations: The Scramble for Power in an Ungoverned World

Mark's Most Recent Investment: Solve

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