The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified 212. Crisis Coverage w/ Samir Kaji - Relief $ for Startups via CARES Act, EIDL, PPP; & How an Extended Downturn Affects Emerging VC Funds
Apr 3, 2020
38:33
Samir Kaji of First Republic joins Nick on a special Crisis Coverage installment to discuss Relief $ for Startups via CARES Act, EIDL, PPP; & How an Extended Downturn Affects Emerging VC Funds. In this episode, we cover:
- Startups...
- The CARES Act became law on 3/27, but many are having trouble making sense of it and how it applies...
- Let's start out w/ the two types of loans that are available to small businesses...
- First off, can you explain the difference between the Economic Injury Disaster Loan Program (EIDL) and the Paycheck Protection Program (PPP)?
- EIDL - No forgiveness potential and and requires personal guarantee?
- PPP - Forgiveness potential and no personal guarantee?
- Affiliation... Dan Primack was writing about how the 500 employee rule and how much of Private Equity portfolio companies will be excluded b/c of how the language is written. Can you explain the "affiliation issue?"
- How can this be enforced/checked... so many obscure LLCs used for investment in companies... hard to verify.
- April 3rd - Is this the date that PPP applications are available?
- What advice do you have for startups right now, to be prepared and get to the front of the queue?
- How will seed stage be impacted?
- Some of the best companies (Uber, AirBnB) first took institutional capital after the 2008 crisis; is now the time to be aggressively investing?
- VCs...
- How are the existing funds w/ committed capital adjusting?
- Will we see a lot of attrition / VC firms shutting down?
- What are the impacts on firms that are actively raising?
- Advice for those planning to raise a fund in the next year?
- What do VCs and LPs need to hammer out before moving forward in this environment? (projections/protocol for capital calls, projections for investments, communication plans, etc.)
- LPs...
- What are you hearing from institutional LPs?
- How about the family offices?
- Is it still in a crisis/panic mode or have some allocators put together a solid investment plan going forward?
- If you had to estimate, what % of capital commitments will default and/or be adjusted down?
- Final thoughts and advice for startups and investors?
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