Are We Investing in Things That Really Matter?

Covid-19 has revealed cracks in the systems we depend on. Our healthcare system is overwhelmed and inefficient. Insurance is unaffordable for too many. Inflexible supply chains are leading to massive food waste. And parents are unable to contribute to the economy because they lack childcare.

This global crisis is forcing everyone to consider what really matters. This meme applies to founders and investors, too:

Entrepreneurs everywhere are at home furiously working to solve today’s problems. In a Covid-19 world, they’re doing what they do best: moving fast and fixing things. Here are just a handful of examples from founders I spoke to this week:

• Supplyrails, which helps e-commerce entrepreneurs source manufactures, launched early to make PPE easily accessible. Also, 10% of all proceeds go to Covid-19 relief.
• Rupa, a telehealth solution for functional labs, now offers four different types of Covid-19 tests.
• Icebreaker, which brings companies together, is being used for gatherings of all types, including proms and weddings.
• Offline gathering community Quilt pivoted to bring people together online for support.
• Foodshed.io is reshuffling the food supply chain to get products from local farmers distributed to grocery stores.
• Headspace is providing free services to frontline healthcare workers, and Calm is offering free content.

Founders are pondering: How will I survive? What businesses are truly important? What will thrive in the new normal? They also have to figure out how to build more capital efficient, profitable, and resilient companies in a much more challenging fundraising environment. Many companies will emerge stronger and in a better position to succeed.

Covid-19 also has forced us all to realize we’re all human and in this together. Even though our systems have failed us, individuals are stepping up in a big way. Many of them are tech entrepreneurs. Bill Gates is single-handedly funding vaccine manufacturing. Jack Ma was one of the first to ship PPE in bulk to the U.S. Jack Dorsey just committed $1B to world-positive causes. The connection between these three individuals is capital.

Covid-19 makes obvious what we’ve known all along: Money is power.

Venture capitalists will fund the next generation of multi-billion dollar companies. With that comes the ability—and, some might argue, a human obligation—to fund a better future. I’m optimistic that VCs will invest more intentionally towards building a better future.

The crisis has been a wake-up call for many venture investors, who wonder: Are we investing in things that really matter?

I often share good deals that are off-thesis for me with tier 1 seed funds, and they’re usually stoked. Now, for the first time, fellow investors are replying with, “I’m not sure the world really needs another dating app right now,” “Generating more YouTube content is not a top priority,” or “I can’t bring myself to care about shopping.”

Many of the most valuable companies of our time will solve the biggest problems impacting our wellbeing. There’s more opportunity than ever to invest in world-positive theses (e.g., climate change, wellness, healthcare, education, food, flexible work, economic opportunity, etc.). This strategy aligns with my personal mission to reallocate the world’s capital and networks towards companies making the world a happier and healthier place.

As investors, our primary responsibility is to deliver a high IRR. As humans, our responsibility is to leave the planet better than how we found it. Luckily, we’re at a moment in history when these two opportunities overlap. Even pre-coronavirus, many well-known and respected funds like Obvious Ventures, USV, and Congruent shared this sentiment.

We will emerge stronger after this crisis is over. As Marc Andreesen wrote, now is the time to build.

Now, more than ever, the case is obvious for world-positive investing.