Three Things I Learned In SaaS, Sports, Tech & Live Events 3.13.23
What we learned from a week with innovators, funders, and bankers before the regional bank crisis
Spent a fruitful week at the Kayne Partner Summit where experts discussed the present and future of private equity. Three things I learned (keeping a few to myself for our own use)
Be wary taking advice from those with skin in the game - especially in bubbles. With SVB going under, it seems like another great time to reference "The Big Short": When Mark Baum's team is evaluating if there is a bubble in real estate, they take a tour with a real estate agent in Florida who tells them inventory is sitting on the market due to "an itsy bitsy little gully right now." Of course she'd say that - as would any realtor today and any day -doesn’t matter the market conditions. Or banker. Or investment banker. On a panel talking about funding, we heard bankers and investment bankers tell stories about how "Q2 is going to be on fire." They all agreed "A" level companies - those above the rule of 40 - will have a market. I'm not an expert, and I'm wrong all the time, but it feels like "gully" talk to me. Sure there may be a little bounce back, but not anywhere close to what we were seeing. And that was just one week before Silicon Valley Bank failed. "On fire" they say…..
Spending other people's money to get rich got way too easy. The reality, for most of history, is risk - and lots of it - for the entrepreneur willing to take the leap. For every Schwarzman bragging in "What It Takes" or Benioff claiming the cowboy in "Behind the Cloud" - you know, people who were already exceedingly wealthy when they started their business, or had $2m in backing from Uncle Larry before starting the company, there are thousands of Sam Waltons and Phil Knights - entrepreneurs who had to toe the tightrope without a safety net for years. Same goes for us. I made $16k in 2008. Not much more in 2009. We're going back there. And that's a great thing for everyone in the market looking to build a company that will last as opposed to trying to build the next big exit - health or purpose be damned.
We are all closer to zero at any given time than we think. Always. The bravado, bragging and pride seem compelling - but they're empty smoke signals. A lot of people's near-term dreams and livelihoods came to an end on Friday when they woke up to news SVB could be gone. Some were reckless and impacted by rate hike changes, no doubt, but not all 6,500 employees who are now in limbo as to what’s next. We're so much less responsible for all we think we're achieving and building. Thankful GOD's on the throne.