Insight
Viswanathan: Massive influxes of capital degrade overall asset returns
“Any time you have an influx of capital into any asset class, just a sheer volume of capital coming in much more by a multiple, usually what you see is returns degrade.”
Opinion
Viswanathan: Most venture capital firms' operational 'value add' is hot air
“Yeah, I think you're spot on in terms of most of what's out there is hot air.”
Assertion Supported
Viswanathan: SaaS companies now need $200M ARR to go public
“So before, 1015 years ago, SaaS companies with a hundred million, you can go public. Now, it's actually more like 200.”
Insight
Viswanathan: Overactive, micromanaging boards cause startup failures
“I find that where companies start failing is when boards get overactive and start micromanaging or vice versa, and that's when you see deterioration, but it's really pretty simple, at least in our approach.”
Assertion Not checkable as stated
Viswanathan: Portfolio companies degrade when VCs take over operations
“Whenever that happens, usually the companies degrade pretty quickly.”
Insight
Viswanathan: Venture capital fails if private companies do not provide liquidity
“The other way to think about it is, at the end of the day, you can stay private longer, but you really do need to figure out a way to give liquidity to your investors, your venture and other investors, and even your employees. Because if you don't do that, ven…”
Insight
Viswanathan: Investors should let tired founders drive company exit decisions
“A lot of it really is in close consultation with the founding team, because you may want to hold, but if the founding team and the management team really are closest to the field, obviously, if they see a market transition or if they are getting tired and they…”
Disclosure
NewView Capital spun out from NEA in 2018 with 30 companies
“So that's what we did in 2018. We orchestrated a spin-out from NEA with thirty-odd companies, and that's how NuView was formed, which when we closed the fund in late 2018.”
Assertion Not checkable as stated
Viswanathan: Venture investors are price-takers for top early-stage companies
“Largely in this business, we are price takers for the best companies. And I think that's generally been the case in the last 20 years of venture with maybe one or two extreme examples.”
Insight
Viswanathan: Late-stage venture investing requires much higher valuation discipline
“So price does matter in the later stage because you're not really thinking about, you know, when you're thinking about a hundred X, 500 X, thousand X, whatever it is, those extreme early stage wins. If you pay 50% off for Two, three X off doesn't really matter…”
Insight
Viswanathan: Investors should lean in on price for elite founders
“What I have learned in my career is don't be afraid to lean in more and more on price for the elite CEOs, elite founders, and elite companies.”
Disclosure
Viswanathan: NewView Capital requires potential for 10x returns on every growth deal
“The standard that a lot of people throw around is kind of a, let's make sure that the company is in that three to five X range, but every company we invest in, there has to be a thread or something where, you know what, this actually can get outsized returns a…”
Insight
Viswanathan: Massive capital influxes introduce bad habits into startup leadership
“When you have so much capital coming in, that's when bad habits can start creeping in into the minds of the boards and the management”
Insight
Viswanathan: Don't flood market with capital when competitive intensity is murky
“If you're going up to a big market and you are a leader, then you actually want to lean in more with capital. Whereas if you get a lot more capital, but it's still very murky in terms of the competitive intensity, what you don't want to do is just flood the ma…”
Insight
Viswanathan: Replacing early VC investors via secondary sales is healthy
“And I think it's very, very healthy to effectively switch out some of these earlier investors, give them a return, a really high quality return, and then in their shoes, other investors can step in.”
Disclosure
Viswanathan: NewView buys secondary positions from early seed funds needing liquidity
“We do, because if you think about seed funds, a lot of them, they have amazing returns, but a lot of that is more TVPI, total value, and they may not have gotten a lot of liquidity, because they're in these great companies, and they continue to accrete in valu…”
Disclosure
Viswanathan: NewView and NEA support controlled secondary liquidity for founders
“On the one hand, if they want to sell a small percentage of their stock to get some liquidity, and it's more of a pressure release mechanism for them personally, we actually encourage it. And we've done that in the past, both at Newview as well as at NEA.”
Insight
Viswanathan: Delaying independent board members is a major startup mistake
“I think that a huge mistake is not bringing in operators and independents soon enough. What happens is you have the normal progression where there are more and more rounds getting raised, and yet another VC Nothing against us, but yet another VC joins the boar…”
Insight
Viswanathan: Founders should curate board members as carefully as investors
“So I tell CEOs, curate your investors, but curate your board.”
Insight
Viswanathan: Board members should pick specific spots to add value
“And then you realize, you know what, your job is really not to do that. Your job is to pick your spots where you can actually be accretive to the company and the CEO. And I'd really focus in on that.”
Disclosure
Viswanathan: NewView Capital invested in Plaid following NEA's early-stage backing
“Yeah, this is an easy one. It's Plaid, which I was part of the team that led the seed and Series A at NEA many, many years ago, so I know Zach has been on your show, and I think the world of him, so one of my top priority after founding NewView is figuring out…”
Assertion Supported
Viswanathan: Tech companies stay private longer as VC funds grow bigger
“We found is a lot of dynamics going on, one of them being companies staying private longer, another that these funds are getting raised faster and bigger funds are being raised, so these Portfolios are getting pretty large.”
Disclosure
Viswanathan: Workday's 2009 pitch was his most straightforward in 20 years
“When we heard the pitch, it was probably one of the most straightforward pitches I've ever heard in 20 years of venture, meaning we just had to fund that company, and the reason for that is there's the numbers, but you really have to see what is this company d…”
Assertion Supported
Viswanathan: Private equity acquisitions emerged as new exit route over 2010s
“A lot of these firms are coming in not only to invest as minority growth investors, but also to buy our companies, which is a very new vein of exits for a lot of these venture-backed startups. It's really emerged, I'd say, in the last decade”
