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The DL - PNW's COVID-19 Response and What's Happening to Fundraising

Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.
March 23 · Issue #40 · View online
The DL
Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.

This week’s issue has a list of PNW organizations teaming up against coronavirus, my thoughts on the startup fundraising market, and links to unique data exploring the impact of coronavirus on cities and businesses.

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PNW fighting COVID-19 together
image from u/RudyWillingham on r/seattle
image from u/RudyWillingham on r/seattle
For the first time in human history, the entire world is focused on one problem -@naval

One bright spot in the COVID-19 pandemic is everyone coming together to fight a common enemy (maybe, for the first time ever?). Many of the most iconic companies and institutions in the PNW have been announcing initiatives to help out during this crisis, so here is a (non-comprehensive) list of cool PNW COVID-19 projects I’ve been watching:

📰 Staying informed: Fantastic, free coverage from the Seattle Times. Business news and updates from Geekwire. Great live updates from MyNorthwest. Dashboards and data from Tableau and a local high school student. Bill Gates hosting an AMA on Reddit.
🚸 Helping parents: Weekdays offering a free service matching parents to childcare programs run by teachers and care providers (max 3 children). Pacific Science Center curating learning materials and hosting live streams about science. Oceans Initiative offering a free virtual marine biology camp. Audible providing free audiobooks for children and teens.
🤗 Staying healthy and happy: Immutouch releasing a smart wristband that buzzes when you touch your face. Mystery creating a “Night In” mystery box with dinner and activities from local businesses. Seattle Symphony live streaming performances. Dance Church live streaming events. SnapBar selling gift boxes with products from local businesses.
💼 Staying productive: Smartsheet releasing free templates to help businesses prepare for and communicate about COVID-19. WFH tips from Geekwire and local CEOs. Microsoft making Teams free (and lots of companies finally using their licenses). Madrona CEOs sharing advice on how to manage through downturns.
🥡 Staying fed: Canlis kicking off a drive-through, and the Seattle Times saying it’s working. Restaurants doing take-out in every neighborhood. Matador, London Plane, and Herbfarm feeding healthcare workers. Costco and Amazon supplying and delivering overwhelming amounts of stuff.
👩‍🔬 Advancing research: Fred Hutch and UW leading the way in testing and tracking the virus. Kaiser Permanente launching the first vaccine trial. AI2 building an open research dataset. Gates funding the global COVID-19 response, public health agencies, and a therapeutic accelerator.

🌟 How can you help? Check out All In Seattle, where you can donate directly to established 501c3 non-profits that are already on the ground and deploying resources quickly!

Let me know if you have other stories/links! Would love to add them to the list!

What's going to happen to startup fundraising?
April 2000 email from Sequoia to portfolio companies
April 2000 email from Sequoia to portfolio companies
The stock market is down over 30% since its peak earlier this year, and investors are selling everything. So what’s going to happen to the startup market? Here are my thoughts:
  • VCs will focus on portfolio companies first - They’ll want to (1) make sure companies have at least a year of cash, (2) revise operating plans to extend runway, and (3) review timing of fundraises to either quickly raise now or wait until the market stabilizes
  • New deals will take longer to complete - Not only are investors are focused on their existing companies, but remote work makes it more challenging to communicate (both externally and internally), and investors will want to do more diligence on every deal
  • Very early/very late stage companies will be most affected - Valuations will fall across the board, but it will start with later stage startups who are comped against public markets. Also, individuals will have less capital to invest in risky early stage startups
  • Many VCs will have a hard time raising their next fund - Fund performance will suffer from lower valuations and a slowdown in M&A/IPOs. As LPs review allocations, they will also have fewer dollars to invest in PE/VC because of the declines in public equities
  • Great companies will continue to get funded - Investors still have plenty of dry powder and want to invest in great startups. During this time, startups will likely have less competition for talent, and they will focus on building more resilient, long-term businesses

Meanwhile on Twitter...
If you don’t follow the VCBrags on Twitter yet, now is the perfect time! The COVID-19 epidemic has VCs stumbling over themselves to humblebrag about closing new deals, living through multiple economic cycles, and understanding exponential growth (🤮).
This account retweets them and adds an 👏 emoji, and it’s hilarious.

Other stuff Dan's talking about
📊 Cool data sources - TomTom Wuhan traffic data, OpenTable restaurant data by country, Foursquare data on foot traffic by city, Instagram for coronavirus tracking, Singapore’s COVID-19 data (check out the network graph tab to see what best-in-class testing and tracking looks like)
🗓️ 2019 in review - A bit late… but here are Reddit’s most popular posts and communities from last year. My favorite post was this shower thought
👰 Divorce rates - Chinese cities are hitting divorce “circuit breakers” as the number of divorces skyrockets after couples spend too much time together
🌟 Path to fame - Visualization of how quickly different celebrities became famous using Wikipedia page view data

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About me: I work as an investor at Madrona Venture Group, a Seattle-based venture capital firm that has been early partners with companies like Amazon, Smartsheet, Apptio, and Redfin.
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