Anna Barber is a partner at Los Angeles venture fund M13 and she is the latest outside investor with plans to visit — and search out deals — in Portland.
She was the lead on the deal that brought M13 to the capital table of Portland construction and architecture startup Source. She’s now looking forward to more trips up here to visit Source and two other portfolio companies as well ShopLatinx and With Plot, whose founders both moved to Portland in recent years.
“I hope to be more active (in Portland),” said Barber. “I have reason to visit Portland now. I’d love to, when I come up, meet other founders. I’d love to meet people building great businesses and who are talking to customers more than investors.”
Last year, M13 announced a $400 million fund to invest in companies from Seed Stage to Series B. Barber’s investment focus is on companies building in commerce and future-of-work tools. Her portfolio companies include productivity tools as well as business-to-business marketplaces.
M13 led the $8 million round for Source. The round would generally be notable, but it is especially so in the current funding environment, which has slowed substantially after several historic years.
Barber has some insights on what founders should be doing if they are planning to raise money in this landscape.
“I see the same data that across the market VC activity is way down. I see this in the context of two prior downturns,” she said, noting that she was in operations at Petstore.com in 1999/2000. After the dotcom bust people thought the internet was dead.
“But some of the companies founded then became the biggest companies. Amazon, eBay, Google and PayPal all survived that period,” she said.
She was later running a startup in 2008 during the financial crisis and got through that period too.
“I take the long view that great companies can be built in up or down markets,” she said. “You can’t get distracted by frothy markets or one that feels challenging.”
Here’s her advice to founders:
- Take the long view but be realistic that capital is harder to come by now.
- Make a plan to build more with less and be conservative on how to allocate capital.
- Understand it will take long to close on funding, so start talks earlier.
- Capital is still available for great companies.
- Don’t be afraid to negotiate with vendors, landlords or others. There are always deals to be made and partners have a vested interest in you as well.
- We have gone from a market that rewarded growth at all costs to one that rewards customers paying for product and old-fashioned business principles. The best way to know if you have product market fit is if someone will pay for your product.
- Listen to your customers.
