Investing in down rounds (VC School) + The Lightsmith Group Co-Founder Jay Koh (Climate) | E1431

TL;DR

In this episode, Jason and Molly discuss down rounds in venture capital and the lessons learned from participating in them. They also interview J.C. O'Hara, an investor at The Lightsmith Group, who shares insights on investing in climate startups.

Transcript

okay everybody it's another sunday edition of this week in startups first up we have an impromptu vc sunday school molly and i took a random question from nody gang member bob g on the live stream and it was supposed to be a noti only moment but it was so good we thought we had to share it with you now if you want to join the nody gang that's the n... Read More

Key Insights

• 🛝 Down rounds require careful consideration of the founder's execution and communication skills.
• ❓ The Lightsmith Group focuses on growth stage companies that already have customers and technology.
• 🪡 There is a need for tools and technologies that can help manage the risks and impacts of climate change across various sectors.
• 🍉 Adaptation and resilience should be integrated into climate investments to ensure long-term sustainability.
• 🧑‍⚕️ Supply chain management and human health are often overlooked areas in climate adaptation and resilience.

Questions & Answers

Q: What lessons have you learned from participating in down rounds?

Jason shares that he has participated in down rounds when he believes in the founder and their ability to execute. If the founder has been communicative and transparent, he is willing to support them. However, if the founder has not been communicative or has not executed well, he will allocate his capital to founders who have.

Q: How does The Lightsmith Group decide which companies to invest in?

The Lightsmith Group focuses on growth stage companies that already have customers and technology. They look for companies that offer solutions in areas such as risk assessment, supply chain management, agriculture analytics, and water efficiency technologies. They aim to scale companies that are already engaged in the market and have the potential to address the challenges of climate change.

Q: What are the overlooked areas in climate adaptation and resilience?

J.C. O'Hara mentions that supply chain management and logistics are often overlooked in the discussion of climate adaptation. He explains that technologies that can dynamically reroute shipments and manage transportation in complex environments will be crucial in adapting to the challenges of climate change. Additionally, he highlights the importance of considering the impact of climate change on human health and the need for healthcare diagnostics and solutions.

Q: Are there areas in climate investing that are being overhyped?

J.C. O'Hara suggests that while there is significant investment in renewable energy and electric vehicles, there may be opportunities for unique returns in areas that focus on adaptation and resilience. He mentions the need for innovation in addressing the impacts of climate change on human health and the importance of considering the long-term implications of climate solutions.

Summary & Key Takeaways

• Jason and Molly address a question from a viewer regarding their experiences with down rounds. They emphasize the importance of supporting founders who have executed well and communicated effectively during difficult times.

• Molly interviews J.C. O'Hara, an investor at The Lightsmith Group, about his work in investing in climate startups. They discuss the challenges and opportunities in the field, as well as the need for resilience and adaptation in the face of climate change.

• The Lightsmith Group focuses on investing in companies that provide tools for understanding and managing the risks and impacts of climate change across various sectors, such as agriculture, water, transportation, and healthcare.