#40 - Market Update and the VC Corner

Market Meditations

Neal and Chris discuss the week's news in VC and the public markets. Neal starts off with recent statistics: 1. 91% of startups felt their business practices impacted by the COVID crisis 2. 18% of startups made a pivot to a new market 3. 13% are considering a pivot in the next three months 4. 34% of series B companies are laying off employees 5. 48% of startups have added new employees and 78% plan on hiring by year-end. Furthermore, the two discuss the return to the workplace and what this might look like. Chris explains the change we might see in the types of jobs people return back to and uses David Graber's book titled, "Bullshit Jobs", to exemplify the American working ethos to create a need for meaningful jobs that do not accrue benefit to civilization. Chris updates viewers on the strange actions taking place in the public markets, most notably that post-bankruptcy companies are seeing stock shares soaring. Chris mentions the tremendous amount of day trading and the gamifying of trading through Robinhood. Chris describes it as a generation taking money from the Boomer generation and transferring it to a younger generation. Chris further exclaims that there has never been such a disconnect between the health of the economy and the high's seen in the stock market. Chris describes the market as starting to roll over with volatility returning. Once stimulus declines the stock market will continue to subside, with current estimates a GDP decline of 48% while the Nasdaq currently sits at a 5% high. Chris and Neal discuss the SaaS model but question it's durability through a recession. How will the SaaS model be promoted in the event that subscriptions and licensing fees decline? Chris points out that this is the time for us to be prepared and in what ways are we insulating ourselves from the truth and the economy with its all-time lows in employment and GDP.