Bill Gurley and Chetan Puttagunta – An Update on Consumer & Enterprise Venture Capital

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com.

**SPEAKER_3** (0:56)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (1:21)
My guests today are Bill Gurley and Chetan Puttagunta, both partners at Benchmark Capital.
We review the early stage investing world in the face of coronavirus in a very timely conversation, which is one that will remain valuable once this crisis is done. We discuss enterprise and consumer investing, funding and growth, and the entrepreneurial spirit in the face of a crisis. Please enjoy. Okay, Chetan and Bill, thanks for doing this with me on very short notice. A lot going on this week. We've got a lot to talk about, so we will dive right in. I would love to hear the perspective of both of you, just where we sit here on March 12th, which is Thursday evening.
Just kind of get your temperature on how you're talking to portfolio companies, what you're seeing in sort of the venture ecosystem that might help those listening. Chetan, maybe we'll start with you.

**Chetan Puttagunta** (2:07)
It's a pretty unique time, I think, if you just look at how we're recording this podcast. All three of us are in our own rooms and, you know, there's reason for folks around the world to be concerned, to be taking precautions.
And at the same time, if you go back to the business world, our portfolio companies are advised to take the necessary precautions and adjust work as they need to and take the necessary steps to protect their employees and protect the overall company.
And once you go through that initial adjustment period, the spirit and the energy of these entrepreneurs sort of comes back because you're able to refocus that energy, that anxiety. And then you start talking to your customers and they too have a job to do. And as a trusted vendor, you have a job to do for them. And then things start to sort of roll back into place. And I think if you go back and step back and it all comes down to the health of the company and the position you've put the company in, if you can be conservative on cash, if you can be pragmatic in these times and continue to execute, as we've seen over and over in the history of downturns, and I know Patrick, you've studied them, that companies that stay disciplined and continue to execute through them come out the other side much stronger in a position to really take advantage of market dynamics that then end up thriving and building an incredible amount of value.

**Patrick O'Shaughnessy** (3:45)
Bill, how about you? I know you've been through this before.

**Bill Gurley** (3:47)
Yeah, that's, I mean, unfortunately, I'm old enough where I've been through this twice before, in 2001 and then in 2008, 2009 around the mortgage crisis.
And when you're in the depths of it, it certainly feels like, oh my God, this is the worst thing that's ever happened. There's never been anything like this before, you know. And, you know, the truth of the matter is there hasn't been something exactly like this, but there's been something kind of like this where the financial market shut down.
And, you know, it does create a lot of anxiety for people. And there are startups that are more kind of on the tip of the spear. I think some of the travel stuff, people can look at the data and see they're going to have to live with the top line getting hit pretty severely, even if it's just for a short window. But that's not something anyone had in any of their scenario analysis. And so for those businesses, I think some of the stuff Chetan is talking about, they might have to move a little more swiftly, a little more quickly, and might have to make some harder decisions if your top line is being impacted. I think there are a few companies that might be in the middle of a financing, which can be kind of difficult because especially if it's later stage, the people that are doing the investments take a lot of their leads from the public markets. And if the comps are down 40%, it's hard for them to be certain about where to land on a price and that kind of thing.