Tom Loverro is a Partner @ IVP where he has led or was actively involved in investments in Amplitude, Coinbase, Hashicorp and Datadog to name a few. As a result of his investing success, Tom was named to Forbes Midas List in 2021. Prior to joining IVP, Tom was a Principal at RRE Ventures.
In Today's Episode with Tom Loverro We Discuss:
1.) The Entry into Venture:
- How did Tom make his way into venture first with RRE? How did the role with IVP come about?
- Does Tom believe we will see many venture investors move firms with much of their existing expected carry cut in half with the changing landscape?
- What is Tom's biggest advice to someone looking to make their way into the venture world?
2.) The Calm Before the Storm:
- Why does Tom believe now is the calm before the storm?
- Why does Tom urge founders to go out and raise now before the storm hits?
- Is Tom already seeing pricing coming down for both early and late-stage companies?
3.) When The Storm Hits:
- When does Tom believe the storm will hit?
- Why does Tom believe when it does hit, it will be worse than The Great Financial Crisis?
- How will VCs respond when the storm hits? How will it impact their investing cadence?
- How will LPs respond when the storm hits? Will they cut back their manager commitments?
- Does Tom have hope that their will be a new class of LPs in this new economic cycle?
4.) The Rounds That Happen When The Storm Hits:
- Does Tom believe we will see a wave of down rounds when the storm hits? Why are they less common than people think?
- In the eye of the storm, will we see further layoffs? Will we see firesales? Will we see a tidal wave of shutdowns?
- Will large multi-stage funds with huge amounts of dry powder change their deployment pace?
The Survival Guide for the Storm:
1.) Raise Now:
- Why does Tom believe that startups should raise now, not later? What amount of runway should they raise for in this environment?
2.) Cut, Cut and Cut Some More:
- What amount of runway should startups be cutting to get to?
- How will this impact marketing spend? Why are your marketing dollars more powerful now than ever before?
3.) Focus on Survival Not Valuation:
- What does Tom mean by this? How can founders gain leverage with VCs when raising today?
- How can founders instil a sense of urgency in their raise with investors?
4.) Bring on Operators with Experience:
- Why would operators with experience join a struggling startup?
- Will operators with experience not have a flight to safety and stay at their well-paid FANNG role?
- Does this potential operator not shorten runway even further as they are often expensive?
5.) Unit Economics over Growth:
- How can founders show investors a superior profile of unit economics moving forward?
- Do investors not want both unit econ and growth today?
6.) Play Your Cards Right and Then Go on Offense:
- How does Tom advise founders on the right time to go on offense?
7.) Be Decisive, Half Measures Rarely Succeed:
- How does Tom define a half-measure? What is so wrong with half-measures?