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00:00First, citizens coming in to buy parts of SVP deposit Burke. You know, you and your your company and portfolio companies have some exposure to SBB. What do you make of the outcome? I think it's not surprising that we were all hoping that somebody would come in and buy the bank just so that those relationships can continue. In terms of Poland's exposure, we work a lot with bootstrapped companies and so they aren't really the core market for Silicon Valley Bank. So we didn't have nearly as much exposure as some of our peers in the industry, which was lucky for us. But I think this is a good outcome in terms of making sure that that stability that was there for a long time continues for folks. Going forward, though, I do expect to see a change in underwriting policies around what profile of companies can get debt and on what terms relative to what we were seeing in the past. Elodie and every coffee meeting I've had, every phone call of the last two weeks is remind me that they're investing on a 10 year time horizon. Right. But what have you made of the last couple of weeks? What do you think the impact span to how you go about doing business? Great question. So I think there are groups out there that have been relying on debt either as part of their initial investment strategy or more recently we were hearing this and let's call it six to eight months. You know, there was a correction that happened in the public markets about a year ago, and it's taken some time for that correction to materialize in private market valuations. We were looking at companies over the last two quarters and any time we talked about their need for potential cash going forward, we got a lot of responses around. We would rather take on debt than take on a down round. I suspect for those types of groups, that game is ended now and they're going to have to be some corrections on the private side valuation. So from our perspective, it's sort of an overdue correction that we've been waiting for for the last couple of quarters, maybe a little bit longer in terms of how it impact acquired. No, no, I just wanted to jump in and ask, you know, in that vein what a term sheet looks like right now, because there were all these kind of big picture themes that we talked about January through early February. You know, bigger checks, slightly earlier stages. Right. You think seriously that kind of all went away amid the tighter financial conditions conversation when SBB collapse. What are you seeing in the time sheets that are coming across your desk? So I would say I see it less than the term sheets other than valuations have rationalized compared to where they were in the last 18 to 24 months. I would say the largest change that we're seeing is actually a better alignment. I would call it between founders and investors. So for the last few years, there's been a narrative in the market that more money at a higher valuation is the way to showcase founder friendliness. I think founders have woken up to the reality that taking on more money at higher terms doesn't necessarily play to their benefit in the long run. And we're starting to see a lot of founders who are asking more around. How do you really partner with us as organizations and as individuals? What type of value are you bringing? Beyond a capital check? And so that focus on partnership combined with more rational valuations is definitely what we're seeing these days. Did you just use the term found a friendly? I did. I think I've heard that before in the lobby. Too few weeks and months. What does it mean? Look, we've had a very specific definition of it here at full, which was a dedication to making sure the companies that we partner with have all of the resources and opportunity to succeed. And for us, that's always meant we make sure that there's clear alignment between us as an investor and the company and the founders going in. So that doesn't necessarily mean the highest valuations. That means the right amount of capital for the strategy that they're looking to enact. I do think we've we've seen a game of let's raise as much as we can at the highest price and getting to a billion as fast as possible is the right thing for us. That's the piece that has really fundamentally changed in terms of a definition of founder friendly, where folks now are realizing, you know, if you're crushed under three hundred four hundred million dollars of preference stack at a valuation that you're going to take four years to climb yourself out of, that's not a very friendly place to be. And so that is really changing the definition or what founders are looking for in terms of being more thoughtful, asking more questions of the investors in terms of what do you do to help your companies? How are you playing this longer? You know, to your point, it is a 10 year game, right. But it's a 10 year game with the company can live for 10 years if they're going to run out of cash in 18 months, because there isn't the proper partnership at the board level where investors are really, you know, challenging the founders as opposed to just letting them run wild. I think that's a big piece of what we're seeing, change in the market and the health of the stocks themselves. Philip is really focused on software in particular, but also e-commerce, mobile applications. What are you excited about right now? Well, I think if you're an investor who's been through a downturn, then you kind of know what's coming, which is again, a closer alignment on entry point between funds and the companies that they work with. There are a lot of counter cyclical businesses out there that do very well in these kinds of times. So we're familiar with the business that enables you to sell your old clothes, buy a mobile app to others on the platform. That's the kind of company that can do reasonably well in good times. But as you know, economic pressures start to mount. Folks may be looking for a way to make more money. And so they're more eager to part ways with items of clothing they haven't worn recently. And similarly, if you're looking to save money, maybe you're going to be looking to buy second hand instead of buying first hand. So that's an example of the type of countercyclical businesses that we would see come out of these times. I think more broadly, when you have more pressure economically and you have less capital going into the market, you start to see a lot of small advantages. So you're able to hire better talent for a more rational price. You're able to get more bang for your buck when it comes to marketing and all of your dollars don't just go to the Facebook and Googles of the world. So do you think that you'll start to see businesses be able to actually be built more efficiently than we've seen in the last few years?

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VC Spotlight: SVB Collapse Threatens VC Industry

The $2 trillion venture capital industry could see portfolio markdowns of 25% to 30% — a “haircut” of possibly $500 billion — following the Silicon Valley Bank debacle, according to Bloomberg Intelligence. Full In Partners Managing Partner Elodie Dupuy speaks with Bloomberg Technology's Ed Ludlow. (Source: Bloomberg)

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