Kanyi Maqubela, Managing Partner at Kindred Ventures, discusses his journey in venture capital, investment processes, and navigating the current economic crisis. The podcast covers his childhood, founding startups, and insights on building conviction in investments amidst Covid-19 challenges.
Effective communication with portfolio companies is crucial during market uncertainties.
Adjusting portfolio construction strategy includes increasing reserves for financial stability.
Founders may need to accept higher levels of dilution for greater ownership in their companies.
Deep dives
Communication Strategy with Portfolio Companies
Notation, a venture capital firm, emphasizes the importance of increased communication with portfolio companies during the evolving market conditions. They advise startups to focus on cash preservation, cost-cutting measures, and strategic planning to navigate the uncertainties. By adjusting their communication cadence and providing specific guidance tailored to each company's situation, Notation aims to support their founders through these challenging times.
Resilient Portfolio Construction Strategy
Notation considers adjusting their portfolio construction strategy by slightly increasing reserves for existing portfolio companies to ensure greater financial stability. While contemplating the balance between over-reserving for current uncertainties and maintaining adequate dry powder for new investments, they aim to strike a measured approach that aligns with their long-term investment goals.
Potential Shifts in Seed Investing Landscape
In response to the changing market dynamics, Notation anticipates that founders may accept higher levels of dilution in exchange for greater ownership in their companies. While they do not foresee a significant decline in market-clearing prices for investments, they believe founders might exhibit a willingness to accept more dilution, impacting ownership structures in seed-stage investments.
Long-Term Vision and Adaptability
Notation emphasizes the importance of creating sustainable strategies and cultures that can withstand changing market conditions. By focusing on consistent improvements in their investment practices and maintaining empathy across diverse demographics, they aim to foster a resilient and adaptable venture capital firm that can navigate future disruptions with a balanced and considered approach.
Navigating Uncertainties in the Venture Capital Landscape
Notation acknowledges the unique challenges presented by the current global health crisis and its implications for businesses and investments. By prioritizing effective communication, prudent portfolio management, and a long-term outlook, Notation seeks to guide their portfolio companies and investment strategies through the uncertainties of the evolving venture capital landscape.
Kanyi Maqubela is a Managing Partner at Kindred Ventures. He previously served as a Partner at Collaborative Fund, where he was an early advisor to Tala and Walker & Co., and a board member at Buffer, Camino Financial, Spruce, and True Link. Kanyi is also a co-founder at Heartbeat Health, and has served as a Lecturer and Adjunct at New York University Tisch School of the Arts.
In this episode, we discuss everything from Kanyi's childhood to founding his first startup out of Stanford to joining Collaborative Fund to ultimately founding Kindred Ventures with his partner Steve. But in between his story, this was a fascinating conversation about the arc of venture capital, how to build an investment process and conviction, and navigating the current Covid-19 health and economic crisis.
As always, a huge thank you to Carta, the title sponsor for this season of Origins. This season is also sponsored by SVB and Cooley, two of the earliest and most trusted supporters of our work at Notation.
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