Joe Mandato’s Post

View profile for Joe Mandato, graphic

Venture Capital Investor | Medtech Entrepreneur | Lecturer | Author

We are in the midst of one of the most significant #venturecapital slumps since the ’09 financial crisis. I recently posted about the importance of VCs fulfilling their roles and meeting their responsibilities by continuing to invest in promising companies (both new and, importantly, follow-on rounds.) In the last major financial crisis, Sequoia Capital advised entrepreneurs to batten down the hatches, and I agreed with that. The general idea here is that it takes two to tango. Entrepreneurs and VCs each need to do the dance. As I recall, Sequoia’s mandate to its portfolio companies was slow spending, stop hiring, rethink and rewrite operating plans, restructure funding expectations and timelines, reduce headcount, cut salaries, rethink stock options grants, table non-vital projects, and more.   We know every innovator thinks their technology is the best and warrants outsized investment levels. In reality, the winners will be those who recognize they need to cut back, and how much they need to cut back, who do less with less and figure out how to bootstrap their way to revenues wherever possible, and more.    As a CEO, I never quite had to #restructure a company to that extent, but I came close, and I know restructuring is not typically in the entrepreneur’s toolkit, nor is it easy. I was leading a company whose product was taken off the market suddenly and unexpectedly, practically in one day. The next day, I walked in and told my bosses at Eli Lilly and Company, which had just acquired us, that I was going to cut forty percent of our overhead. I fully planned to do it, but Lilly told me not to cut a soul. While amazing, it was an atypical response.   I do know firsthand, as a #boardmember, the difficulties of restructuring everything. As difficult as it was, it can be done, it must be done, and the companies that emerge are better off for it.   It takes two to tango. VCs need to pony up more capital more often and with more creativity to fulfill their roles; they need to infuse less panic, and more wisdom and support. Simultaneously, #innovators need to do their part and look long and hard at how they spend investors’ money.   Jay Watkins Kate Garrett Fred Moll #leadership #entrepreneurship

  • Cartoon of a torreador and bull dancing and bull says "You had me at ole."

Spot on from one of the most experienced and seasoned Silicon Valley executives with whom I was fortunate collaborate.

Joe this is an important and thoughtful article that all of us involved in developing companies needs to hear! Thanks for your leadership around this at this critical time!

Tom Krummel

Venture Partner Sante Ventures, Professor/Chair Emeritus Dept. of Surgery, Stanford University Fogarty Institute Board of Directors Chair

11mo

Words of wisdom from a veteran- Joe hope all is well

Austin Barrett

Vice Chairman, Head of Life Sciences @ Savills 🔬 Father of 5 🏡 Little League Coach ⚾️

12mo

Well said Joe Mandato !! #domorewithless

Thanks Joe Mandato. Needed to be said. Also, I'm curious, do you identify as the matador or the bull? :) Have a good weekend.

Brian Regan

Med Tech Launch, Growth and Turnaround

11mo

You’d think it was obvious, but we need reminding. Insightful and timely. Thanks Joe

Lee Wilcox

Chief Financial & Operations Officer

11mo

You are always spot on, thanks Joe

This is important - eye opening - thank you for sharing!

Srikant Mantha

COO | Medtech Operations Expert | Ready to Drive Your Next Growth Phase

12mo

Great post Joe Mandato, thank you!

Tom Keelin

Managing Partner, Keelin Reeds Partners

12mo

Joe, Excellent thoughts!

See more comments

To view or add a comment, sign in

Explore topics