2020.04.12

The fundraising window & preparedness for change & the new social contract

Now’s not the time to fundraise at all. Entrepreneurs learned this very quickly. It was only several weeks ago that GPs were telling us they were moving ahead with their fundraises as planned—now reality and uncertainty have set in, and fundraise timelines are being pushed out further and further.

LPs and GPs have similar questions to answer. Can we make new investments without meeting in-person? How much time should we spend worrying about our current portfolio versus those new investments? Even if our portfolio is healthy, are there even interesting and actionable opportunities for us to consider right now?

I believe the answer to the last question is yes. We’re still open for business—but the bar is even higher now as the uncertainty has grown. And I have to imagine if this public market volatility persists, the denominator effect will prevent even more LPs from re-entering the private markets (assuming they were already close to fully-allocated in private equity and venture capital). If a GP hasn’t already launched their fundraise, they should probably just wait until LPs become buyers again. They may be forced to regardless. Much like the IPO window right now, the fundraising window is effectively closed.


  • Inside the Story of How H-E-B Planned for the Pandemic. Whole Foods may be more well-known outside of Texas, but H-E-B is the real national treasure. Texas Monthly presents H-E-B’s response to this current crisis, but the company has done well adapting to industry trends. They launched their premium store line in the 1990s (Central Market), they’ve acquired a venture-backed delivery platform (Favor), they’ve built bars and performance spaces into their stores. Change will never find them flat-footed.

  • Virus lays bare the frailty of the social contract. Crises require hard decisions and harsh self-assessments. It’s quite striking to see the Financial Times editorial board suggest the need to consider universal basic income and wealth taxes as potential reforms. It’s also surprising to see no mention of expanding access to healthcare, given what’s become a more clear relationship between public health and national security. Either way, striking the balance between implementing a strong enough safety net while allowing for free-market capitalism to thrive will be a necessary challenge for governments to address going forward.


Happy Easter everyone. Here’s the view from the home office right now.