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Andrew Chung Offers Advice to Startups on Adapting to COVID-19 | Techbullion

August 5, 2020 by Charlie

Andrew Chung, founder of 1955 Capital, in his advice to startups, provides a perspective into different ways startups can adapt to the coronavirus pandemic. The investment firm held a virtual portfolio meeting with several company CEOs to discuss how businesses are dealing with the COVID-19 challenge. This health crisis has thrown many businesses into jeopardy, forcing them to change their approach to operations. For example, the reduction in travel due to lockdown restrictions means more employees have to work from home. As a result, startups may be facing an unprecedented moment to start and achieve revenue growth.

Importance of team morale in remote work environments

One of the essential ways to adapt during this period is to strengthen team dynamics and achieve a consensus. This management approach is more important than ever for adapting to post-COVID times. Teams need to stick together during the crisis and motivate employees to be productive. Some startups have remote workers whose morale and productivity will be improved by a team-oriented focus. 

According to Chung in his advice to startups, building team morale is critical for remote employee productivity. This is made possible through constant communication and appreciation between a leader and their employees. Businesses should start thinking more about a team-oriented focus for success through this period.

CEOs should work with all members, allowing them to review their priorities individually. This can help mitigate any misunderstandings and frustrations that may arise when managing remote employees. Employees are more likely to be motivated when they feel valued and appreciated by their organization. This is why managers need to provide a healthy working environment that can improve team morale, thereby leading to higher productivity.

Adopt a global perspective

Startups should learn to develop a more global perspective and not be too U.S.-centric during this pandemic. There are more opportunities for startups that introduce radical innovations, which can be useful on a worldwide scale. With remote working and technology such as Zoom, businesses can transact with partners in different regions of the world. The global markets can be a source of revenue growth for startups, as well as an inspiration for determining how to keep their businesses alive.

According to 1955 Capital, startups can harness innovative distribution channels to grow their customer base and sustain their revenue stream. One way of adopting a global perspective is by understanding how customers are acting in other countries. Regions such as Asia already dealt with a similar health crisis during the SARS outbreak, and thus have prior experience on how to recover. 

Governments in Asia are reopening their economies, which means you are more likely to get customers or partners from these areas. For example, Hong Kong has been returning to normal operations where businesses are opening with social distancing policies in place. U.S.-based startups can monitor how their business counterparts in Asia are doing during this pandemic.

Level the playing field

Andrew Chung also emphasizes leveling the playing field to deal with any limitations with on-site meetings. Since businesses are dealing with a new set of problems, they have to innovate their products, marketing, and distribution to get and retain customers. Leveling the playing field entails building trust with strategic partners and breaking geographical barriers. The limited face-to-face interactions due to social distancing and remote work require CEOs to become more involved in maintaining partners. The perception that investors have about a business and its ability to deliver will determine how well it performs during this period.

Businesses should also be looking for opportunities to align their interests with key stakeholders and other partners working from home. CEOs can easily make important decisions regarding global partners who they can work with sooner to remain open. There is a level playing field with the health crisis, which means startups can pursue investors from other parts of the world. Through Zoom, you can interact with investors from different regions, pitch your idea, and keep the business going.

Startups need to rethink their strategies for managing their operations during this time. Since these businesses are in danger of shutting down, CEOs need to form strategic partnerships to stay open. This can provide the needed space and funding to continue.

Runway planning

The runway is the amount of time that a business has until it goes out of business if the current income and expenses stay constant. It can be challenging to predict the time and duration of the runway during this economic breakdown. The number of people filing for unemployment has been on the rise after the lockdowns as businesses continue to feel the pandemic’s effects. As a result, it is difficult to predict runtime and how long it will take before things come back to normal.

Runaway planning entails meeting milestones and thinking creatively to increase value for the future. Some of the ways for startups to extend runway include reducing non-essential expenses and prioritizing spending on activities that create value. Startups can also extend the runway by changing the pitch of the spending ramp and reallocating fixed capital to monthly burn.

Most startups have never been in such a situation before and might struggle to survive while creating value. According to Chung, startups may need to revisit the terms of strategic collaboration because partners may be more open to compromise during these uncertain times. Some strategic partners might be willing to modify the scope of their projects to align with a business’ research and development spend.

Rethink approaches to fundraising

The current environment has seen severely restrained investor sentiment, due to the coronavirus pandemic. As a result, fundraising can be challenging for startups, especially those targeting investors with an extensive portfolio. This is because most investors prefer working with existing companies instead of startups due to the uncertainties of whether the business will thrive.

Startups will need to become more creative in getting funding for their businesses. CEOs have to think of new ways to convince investors to help fund their business amidst the health crisis. While many businesses may go into hibernation mode, startups need to raise funds that will sustain their operations. The coronavirus crisis presents a layer of uncertainty regarding how the market will come back. Only businesses with a better strategy for gaining new investors will survive.

During this period, investors may not be interested in startups, focusing instead on dealing with businesses they can trust. This can be difficult for firms without an established source of funding or a customer base. However, startups need to show investors introductions that are well vetted and qualified. The idea is to speak to as many investors as possible, pitching your idea and trying to win their trust for funding. You may find some people who are open to listening to your idea and leverage prior diligence.

Conclusion

During this global health crisis, businesses and especially startups need to adopt strategies that will better position them for the future. Startups play a vital role in the economy, but the coronavirus pandemic may reducing their ability to create and challenge their survival if they do not adapt to the new environment.

In recent months, there has been a drop in the number of active startups which has reduced employment opportunities. Business executives should be thinking about the best way to remain relevant and competitive in a post-COVID business world. Andrew Chung’s advice to startups is designed to help businesses survive the current crisis.

Filed Under: News

How Startups Should Adapt To COVID-19

July 27, 2020 by Charlie

Due to the coronavirus pandemic, there has been a drop in startups which has reduced employment opportunities across a variety of industries. Many businesses have been forced into budget cuts and employee furloughs because of the harsh economic times. After a virtual portfolio meeting with several company CEOs to discuss COVID-19 challenges, Andrew Chung, founder of 1955 Capital, provided the following takeaways for how startups can adapt to this new reality.

Runway Planning

Businesses will be forced to make tough decisions regarding budgeting during this time. The success of any startup relies on how well leaders steer their businesses toward success. CEOs must think creatively when making budgeting decisions, including more upfront cash payments, cost-sharing, and other financial support.

According to Andrew Chung, runway planning entails engaging strategic partners who have been severely hit by the crisis. Some businesses have experienced significant downward pressure on market caps and are dealing with furloughs and budget cuts. The number of people filing for unemployment has been on the rise after the lockdowns as businesses continue to feel the effects of coronavirus. As a result, it is difficult to predict how long it will take before things come back to normal.

Runway extension entails planning when to raise the next round and meeting milestones in advance. For example, businesses can plan monthly cash burn over time, which may require fundraising. Startups may need to decouple their burn rate from unpredictable timing of a return to regular activity when strategic partners return their phone calls.

Level the Playing Field

Startups have an opportunity to catch up with established companies during this period if they implement appropriate strategies. The pandemic has leveled the playing field by allowing each business to work out recovery. They need to rethink their target markets and reprioritize their development efforts in gaining a market share. For example, startups that produce products for multiple market applications can start by targeting those sectors that are resilient to the coronavirus pandemic. This means businesses can renew their product matrix and shift focus from the most affected sectors to the least affected.

Breaking geographical barriers is also an essential part of adaptation. According to Andrew Chung, businesses should be looking at the global picture and learn from those who have already adapted to the conditions. Countries like China and Taiwan can provide a ready market because they have already reopened their economies.

Startups can also adapt to the health crisis by rethinking their distribution strategies. Travel restrictions and social distancing rules have forced many industries including retail, hospitality, travel, and restaurants to slow down their businesses. The lockdown restrictions have forced changes to distribution strategies, such as adopting online marketing and direct-to-consumer opportunities.

Rethink Approaches to Fundraising

Fundraising can be challenging for startups during this time because most investors would prefer working with existing companies as opposed to startups. This is due to the uncertainties of whether the business will thrive. Startups need to prioritize capital pockets that are active during the crisis. For example, they may have to rely on funding from people they know and can trust. CEOs must convince investors that they can perform due diligence and assure return on investment.

There are other potential sources of funding that you can find during this period through more creative means. For example, some funding sources for startups can come from government grants and R&D programs if you have a tech business. All businesses need to create a portfolio that will be favorable to investors, says Chung.

Secondly, businesses can look toward family offices for possible funding. These are less bound to the institutional framework for funding, especially when dealing with a well-capitalized business. A startup can seek investors from family and friends who have faith in their ability to create profits.

Adopt a Global Perspective

During this time of uncertainty, there are more opportunities for startups that introduce radical innovations, which can be useful on a worldwide scale. As governments seek to restore growth and repair their economies, businesses should be thinking toward a global perspective, such as sourcing from the Asian market.

Startups can adopt this global perspective by understanding how customers are acting in other countries. Regions such as Asia already dealt with a similar health crisis during the SARS outbreak, and thus have prior experience on how to recover. Startups can monitor how their business counterparts in Asia are doing during this current pandemic.

Importance of Team Morale in Remote Work Environments

Startups need to adopt a proactive approach that improves team morale to survive. According to 1955 Capital, it is more crucial than ever for startups to focus on team building. This means CEOs should cultivate a team culture between suppliers, partners, and employees alike. Every stakeholder should be brought on board and know a business’ priorities and be involved in planning initiatives.

Such approaches include regular check-ins to individual workers and the creation of virtual opportunities that can replicate the physical interactions within the workplace. This allows teams to stick together during this crisis and keeps employees motivated. Some startups have remote workers whose morale and productivity will be improved by a team-oriented focus.

Conclusion

Startups play a vital role in the economy, but the coronavirus crisis reduces their creation and challenges their survival. Andrew Chung provides a perspective into surviving in the unique environment of COVID-19. Businesses should focus on driving revenue and growth, even during slowed economic growth. They should be forward-thinking and focused on the best way to enhance their competitiveness in a post-COVID business world.

Filed Under: News

Andrew Chung of 1955 Capital to Speak on COVID-19 Pandemic at Chinese American CPA Association

July 27, 2020 by Charlie

SAN MATEO, Calif., July 24, 2020 /PRNewswire/ — The American Association of Accountants announced that Andrew Chung, Founder and Managing Partner of 1955 Capital, a global venture fund focused on transformative companies that can solve the most pressing issues in the developing world, will be the featured speaker at their cloud lecture series focused on the COVID-19 pandemic. The lectures will take place from 4:00 PM-6:00 PM Los Angeles time on Saturday, July 25, and 7:00 AM-9:00 AM on Sunday, July 26, in China.

(PRNewsfoto/1955 Capital)

The lectures will look at issues such as how companies can survive the market downturn, how foreign students can protect themselves in the epidemic situation, how to prevent and treat the new virus, the problems your company encounters when applying for PPP loans, how your company may be affected as the tax rate continues to rise, and the tax issues of new and old immigrants studying abroad, gifts and cash.

“Having lived in Greater China and advised companies during the 2002–04 SARS outbreak, I know firsthand how a pandemic can dramatically slow businesses down and force a rethinking of their strategies. But I have also seen companies prepare themselves well and come out of a crisis stronger than before,” said Chung. “By managing through the situation with prudence and calm, our hope is that companies will invent ways to emerge on the other side of this in an advantaged position relative to their competitors and be ahead of the curve when the market turns.”

This lecture will be conducted in the form of an online video conference to facilitate public participation. Other participants include:

  • Lin Dajian, Former Mayor of Monterey Park, California – Support for international students seeking medical treatment and maintaining legal status during the epidemic
  • Professor Xiu Yi, Chairman of the Chinese Association of Thoracic Surgery and Lung Cancer – Prevention and Treatment during the Epidemic
  • Shi Yiru, Accountant, Vice President of the Sino-American Association of Accountants – Guidelines for the Use of Epidemic Subsidy PPP
  • Accountant Niu Peiyan, Vice President of the Sino-American Association of Accountants – Tax Rate Growth and Sales tax considerations
  • Li Hao, the founding president of the China-America Accountants Association – Taxation knowledge of studying abroad, gifting and cash

To register for the event and for more information, click here.

About 1955 Capital

1955 Capital was founded by Andrew Chung to invest in companies that can address the developing world’s most pressing challenges related to energy, healthcare, food, agriculture, education and sustainable manufacturing. With over a decade of experience investing in these sectors at leading global firms like Khosla Ventures and Lightspeed Ventures, Chung has experience in identifying technologies with significant impact potential in developing countries and supporting entrepreneurs in developing mutually productive partnerships. The firm is based in San Mateo, California.

For media inquiries please contact: press@1955.capital

Filed Under: News

Andrew Chung Speaks at “This is Climate Tech” Webcast Hosted by Greenbiz

July 25, 2020 by Charlie

Andrew Chung, the founder and managing partner of the venture capital firm, 1955 Capital, has one of the strongest track records as a proponent of green businesses. In particular, Chung’s focus has long centered around the renewable energy and sustainable food and agriculture sectors. Over the past 15 years, Chung has invested in a number of these climate tech industries and supported entrepreneurs behind the green tech revolution.

Recently, Chung made a special appearance on the Greenbiz.com-hosted webcast “This Is Climate Tech”. He was joined on the webcast by GreenBiz Editorial Director Heather Clancy and two more guests: Andrew Beebe, a former green tech entrepreneur who now operates as the Managing Director of Obvious Ventures, and Nancy Pfund, a founder of DBL Partners.

What is Climate Tech?

GreenBiz defines climate tech as those solutions that have “exquisite focus addressing the climate crisis”. For the purposes of this discussion, climate tech is concentrated on five distinct areas:

  • Energy supplies
  • Infrastructure innovation
  • Transportation
  • Industrial processes
  • Agricultural land use

Climate tech, then, examines each of these areas and addresses them with new technology and innovations, often spearheaded by pioneers like Chung and others in the green business enterprise.

How Has Climate Tech Changed Over the Years?

Chung and the rest of the panel’s participants offered thoughtful insights into how climate tech has evolved over the last decade. Nancy Pfund, who began her company more than 15 years ago, was a pioneer in climate tech venture capital. She sees much more focus and commitment with investors and companies in the cleantech sphere today as well as fewer “tourists”, the term she uses for supposed dabblers in climate tech investing.

Pfund is also quick to point out that there are many more climate challenges today than there were when she first started her business, things like floods, droughts and the diminishing ice cap, and that these events bring increasing attention to climate tech companies and technologies.

Andrew Beebe was a cleantech entrepreneur before joining Obvious Ventures seven years ago. Now, more than any other time during his tenure in this sector, he has identified many more “second generation” entrepreneurs and investors in the climate tech arena. He notices an increasing number of top people leaving companies like Tesla and Nest to form their own companies, having learned from the mistakes made by these “first generation” companies. He sees investors also being more nuanced and thoughtful about where they place their money and no longer jumping on the first good idea they stumble across. Like Nancy, he has seen a “profound societal shift” in the last decade and a new urgency to find sustainable solutions to energy, agriculture and other life essentials.

Throughout Chung’s 15 years as an investor in the climate tech arena, he has backed a number of breakthrough technology opportunities. Today, he sees more of a proven roadmap for entrepreneurs and investors in climate tech and he believes that the first generation of success stories gives them more confidence about investing and spending their energy in this arena. Chung reiterated what Andrew Beebe mentioned about a second generation of players in the sector, who brings more “nuance, commitment and sophistication” to their work. Another change that Chung mentioned was the current “swirl of government, institutional and consumer interest” in climate tech companies, a perfect storm stronger than ever before. Finally, he feels that “governments and individuals are becoming more aware of the vulnerabilities in things like the food chain and energy grid”, as events like the recent pandemic make the fragility of these systems more obvious.

All of the panel members continue to be optimistic about the future for climate tech companies. Nancy pointed out that it has traditionally been in “global downturns…that some of the blockbuster companies have been formed, companies like Tesla and Rooftop Solar.”

Andrew Chung on Climate Tech

Chung sees massive opportunities in the climate tech sectors today both for investors and for entrepreneurs. He is particularly encouraged that there has evolved more of a playbook with proven ways to succeed in green tech/climate tech businesses than there when he first became interested in this sector. He sees a large amount of interest in green solutions within several industries, including…

  • Fashion: According to Chung, “the fashion industry has taken huge interest in green tech.” He ought to know; his wife Coral Chung is the CEO of a popular California-based fashion brand, Senreve. Chung cites the need for eliminating the huge waste of resources and materials that is currently inherent with fashion industry.
  • Carbon removal: Chung acknowledges that while reducing carbon emissions is important, there is the potential to remove these gases from the air and convert them to another useful product. He shares that promising research is already being done in China on this idea. China needs desperately to reduce its carbon emissions. According to Chung, more than two million people die each year in China from air pollution-related disorders. In addition, he sees technologies like 3D printing and robotics as having the potential to reduce carbon emissions by decreasing the number of workers who need to drive back and forth to a plant as well as the energy needed to manufacture a product.
  • Sustainable food: Chung points out that the recent COVID-19 pandemic and subsequent shut-down has exposed the vulnerabilities of the global food chain. Few consumers haven’t experienced going to the grocery and finding the store out of an item they wanted, whether that be toilet paper or pork. Having the CEO of Tyson saying that he has to shut down 90 percent of his pork production plants due to coronavirus outbreaks earlier in the year brings this problem home to the average consumer. Chung sees finding new ways to create sustainable food sources as a priority for the coming years and gives Nature’s Fynd, a 1955 Capital portfolio company that has created a sustainable non-meat protein that recently raised $80 million from investment platforms led by Bill Gates and Al Gore, as an example.

Andrew Chung on Impact of COVID-19 on Climate Tech

Chung is quick to point out that the current COVID-19 pandemic makes climate tech companies all the more essential. Few saw the pandemic coming and yet it has impacted food supply lines and other necessary business sectors. Says Chung, “the future is at risk without investment in climate tech companies”. He and the other panel members cite food supply hiccups as indications that a better and more efficient way to get essential products to consumers is needed. Nancy notes that currently more than 40 percent of produce in the United States is thrown away. This is not only terrible when looked at through the lens of world hunger, but also in the wasted resources used to farm, harvest, process and distribute these products.

Chung sees the pandemic bringing new attention to the recyclability of products and finding new uses for existing products. He sees this concept, in light of the pandemic and shut-down, as helping to attract new companies to climate tech as well as first-time investors.

Chung on the Current Climate for Climate Tech Companies and Entrepreneurs

Andrew Chung sees enormous potential for climate tech companies and those with innovative ideas within this sector. The pandemic and racial unrest have spurred an increasing sentiment of nationalism, both in the United States and abroad, Chung laments this isolationist trend as “unfortunate and getting in the way of innovation.” However, he sees technology as an “olive branch” that can tie nations together and that even has the “potential to create peace in the world.”

Despite all of the world political and social climate, Chung sees lots of opportunity for companies that can create unique processes that fill a need. He stresses that these products and services need to be well differentiated from existing technologies. After all, companies are not going to want to cede market share and/or invest in technologies that aren’t truly innovative. These new ideas also need to be practical. He encourages entrepreneurs to think through their ideas carefully. For example, he suggests that entrepreneurs ask themselves whether they can build their product in the scale that will make it probable and affordable for consumers or businesses.

About Andrew Chung

Andrew Chung is the founder and managing partner of 1955 Capital, a venture capital firm founded in 2015 by Chung to invest and help promote companies that address the developing world’s most pressing challenges related to energy, healthcare, food, agriculture, education and sustainable manufacturing. Chung has 15 years of experience in investing in these sectors, and 1955 Capital, which is based in San Mateo, California, has been actively investing in innovative start-ups that help to restore and sustain our planet.

About GreenBiz

The GreenBiz Group, founded in 1991, is a media and events company that advances the opportunities at the intersection of business, technology and sustainability. Through its websites, events, peer-to-peer network and research, GreenBiz promotes the potential to drive transformation and accelerate progress — within companies, cites, industries and in the very nature of business. They host a variety of webcasts each week on subjects that range from “Trucking’s Clean Future” to “The Future of Sustainable Textiles”.

To hear the “This Is Climate Tech” podcast in its entirety, visit Greenbiz.com.

Filed Under: News

Andrew Chung of 1955 Capital Speaks at Climate Tech Webcast, Hosted by GreenBiz.com

July 1, 2020 by Charlie

On May 28, 2020, GreenBiz hosted a webcast, “This is Climate Tech,” to discuss several timely topics related to the emerging industry. Climate tech is a rapidly growing industry that offers innovative products and services created to combat the negative effects of climate change. It differs from “cleantech” (a term that’s been around since the early 2000s) because it focuses on solutions to climate change issues and empowering corporations, governments, and individuals to make a positive impact on the climate. Such solutions include geoengineering, alternate energy, cleaner water, solar radiation management, afforestation, and more.

The topics covered in the webcast included the impact of COVID-19 on climate tech, the investing landscape of climate tech companies, and what climate tech entrepreneurs need to do to succeed. The three panelists featured on the webcast are long-time venture capitalists with extensive experience and knowledge of the industry: Nancy Pfund, founder of DBL Partners; Andrew Beebe, managing director of Obvious Ventures; and Andrew Chung, founder and managing partner of 1955 Capital.

Chung founded 1955 Capital to find solutions to global challenges in several industries including healthcare, education, agriculture, and sustainable manufacturing. The investment firm has focused on providing sustainable and scalable solutions to solve the pressing challenges of developing nations. A graduate of Harvard and Wharton, Chung has had 15 years of experience with climate-focused businesses. As a general partner at Khosla Ventures, he managed $500 million worth of assets and was instrumental in launching several climate tech companies.

During the webcast, Nancy Pfund shared how the climate tech industry has evolved over the years. During the early 2000s, the majority of investors in climate tech were “tourists” without a long-term commitment to make a positive impact on the climate. That has changed with an increasing awareness of global warming and understanding of the inevitable need for more sustainable energy sources. DBL Partners was one of the first investors for several climate tech companies such as PowerLight Corporation and SolarCity.

Andrew Beebe explained how he specializes in solutions related to sustainable systems. His experience in the climate tech industry began with investing in solar energy companies with a focus on cost reduction, making solar energy more practical to use throughout the world. Beebe noted the emergence of a second generation of entrepreneurs in the climate tech industry. These entrepreneurs were part of larger corporations such as Tesla before they started their ventures, and they’re bringing a higher level of expertise, experience, and acumen to the climate tech industry. Beebe said he believes there’s been a “societal shift” with an “urgency not seen before” in entrepreneurs and investors. People are looking to do something that has a “real impact, and that is measurable, tangible, and predictable.”

Andrew Chung talked about how the climate tech industry has always had a lot of potential, and entrepreneurs have many areas in which they can explore disruption. The global markets for sustainable food, agriculture, and energy are massive, and technologies like solar, batteries, and LED’s have consistently improved over decades with costs and performance improving by an order of magnitude or more. He pointed out that what has changed over the years has been a rise in confidence among corporations, investors, and entrepreneurs, with success stories like Impossible Foods, Quantumscape and Lanzatech, which Khosla backed while Chung was a GP there. Companies are more assured that they can succeed, and investors now have precedents for solid returns on their climate tech investment.

Chung said he believes that the COVID-19 pandemic has been a reminder of the critical importance of investing in disruptive technologies to find more sustainable solutions that can mitigate global environmental risks. According to Chung, a “perfect storm of different elements” has made it “an incredible time to be an investor, entrepreneur, or executive looking at some of these technological solutions.” Chung is especially optimistic about investing in sustainable food supply chains, mentioning 1955 portfolio company Nature’s Fynd, which has already created advanced solutions to the climate crisis and recently received $80 million in funding from investment firms led by Al Gore, Bill Gates, and others.

Pfund said she believes a strong history has demonstrated that global economic downturns provide opportunities for innovation and finding solutions that otherwise weren’t considered important. She observed that some “blockbuster companies” have been formed during difficult times. Beebe agreed with his fellow panel members and added that the COVID-19 situation has shown how the world can collaborate to find a solution to the pandemic — and a larger collaboration will happen to find solutions for the climate crisis.

While discussing corporate investment in climate tech, the panel agreed that corporations have much more interest in it now than a decade ago. Corporate involvement is critical for startups, as it provides a strategic partnership that gives access to greater assets, resources, and markets. According to Beebe, certain sectors such as oil and gas are finding it harder to transition to climate-friendly technologies, whereas the automotive industry has already started to pivot towards greener innovations.

Chung pointed out that it’s up to the entrepreneurs to show corporations and investors what they can do for them. Investors can get overwhelmed by the sheer volume of pitches — so an opportunity must demonstrate a clear differentiation with a unique value, whether the entrepreneur is offering a widget or a service. Investors also look at the scalability and affordability of the technologies. Pfund notes that DBL Partners has established metrics to gauge a technology’s environmental impact. Beebe’s method is not as specific, especially for early-stage startups; he believes in looking at the founders’ values and assessing whether they’re making a long-term commitment to climate goals.

The panelists also discussed stimulus packages for the recovery of the green economy. Pfund asserted that “policy plays a pivotal role”; if the government puts in policies and regulations that encourage companies to find environmentally friendly solutions and alternatives to their operations, this will act as a catalyst for the climate tech industry. Chung encouraged “entrepreneurs and executives to look at the global picture of these types of stimulus packages” to have a broad mindset and evaluate if their solutions are better suited for specific regions of the world. This could help them partner with certain governments that may be supportive of the particular sort of solution being offered by the entrepreneur.

Filed Under: News

How Startups Should Adapt to COVID-19

June 30, 2020 by Charlie

Lessons from 1955 Capital CEO Roundtable

Recently, the 1955 Capital team organized a virtual portfolio company roundtable with 11 CEO’s discussing the current challenges in the COVID-19 environment, the need for strong leadership in this unprecedented crisis, and response strategies that they have undertaken.

Here are some of the many thoughtful perspectives that were shared in the course of the discussion:

1. Investor sentiment in the current environment will be severely restrained, so it will be critical to rethink approaches to fundraising.

Fundraising will be challenging during this time, especially when targeting investors with large portfolios, who will be spending much more time focusing on existing companies instead of pursuing new deals. For firms with large partnerships, GPs may be fighting to get continued support for his/her companies and be distracted by an increased number of distressed situations.

New opportunities may be harder to get voted through partnerships, especially given increased constraints on completing due diligence. Investors may not be able to visit your site, meet your team, and engage with your products. You will need introductions that are well qualified and vetted, leverage your current investors’ and colleagues’ relationships and political capital to flag senior-level attention, so that it leads to a real conversation. A good place to start may be the list of investors you’ve spoken with. As many may be more constrained in their ability to do new deals, they may be more open to revisit past conversations and leverage prior diligence.

Looking at past downturns, many funds will go into hibernation mode. Many firms raising funds in 1999–2000 slowed their pace dramatically in the 2000–04 timeframe and did fewer deals despite, in some cases, raising large funds. The GFC in 2008 also saw several years of hibernation for many firms before a rebound. With COVID-19, there is an additional layer of uncertainty around the manner by which the market will come back, with wide variance in when deal making may return to a more “normal” pace; for example, the latest research from Harvard suggests that some form of social distancing could last well into 2022.

Entrepreneurs will need to get more creative and prioritize pockets of capital that remain active and interested during this period:

  • A number of funds recently raised capital, want to deploy, but can’t source and diligence as before. They may rely on funds and GPs they know and trust to take a closer look at pre-vetted deals. Your board and investors can help you identify and qualify these sources.
  • Family offices are less bound to institutional frameworks for capital deployment, and may not have broad exposure to early- to mid-stage venture opportunities. For groups that are well capitalized, with core businesses less affected by COVID-19, they could see this as a buying opportunity or good time to enter longer-duration assets.
  • While corporate VC firms (CVCs) may be difficult to access in the near-term as their parent companies deal with the COVID-19 impact on their core business, including layoffs, distress on their balance sheets, and downward pressure on stock price, etc., the tide for some may turn when the market reopens. Their parent companies will eventually need to refocus on driving revenues and growth and may be more willing to partner with technology companies that can increase their chances at doing so — especially if prior customers and profit streams are no longer there after COVID-19.
  • There are also other potential sources of non-dilutive funding, including government grants and R&D programs, particularly for technologies that are beneficial in areas that can help countries address key infrastructure or supply issues and recover more quickly from COVID-19.
  • When investors are adhering to social distancing and limited on ability to travel, it levels the playing field for startups pursuing investors from other parts of the country or globe. Investors from the other coast, in Asia or in the Middle East are a few clicks away on Zoom. Find ways to turn this into an advantage assuming you have properly qualified true investor interest in your company.

2. Runway planning is essential during this environment and can mean whether startups will survive or fail.

Runway extension becomes critical for all businesses with the uncertainty of COVID-19’s impact horizon and lack of consensus of longer-term impact.

  • Timing and duration will be difficult to predict, and the “experts” have never dealt with a crisis like this. On 2/26, President Trump proclaimed that the U.S. only had 15 cases; the U.S. is expected to cross 2,500,000 by mid-July. Was anyone predicting that we would have 22 million Americans filing for unemployment in the 4 weeks after the start of shutdowns? The inherent unpredictability of “black swans” like these underscore the importance of having sufficient dry powder to weather through a variety of outcomes.
  • Engagement with strategic partners who have suffered severe declines in their businesses and significant downward pressure on their market caps may slow to a crawl. They may not be active for several quarters, reassessing their own businesses and dealing with furloughs and budget cuts. Startups depending on strategic partners “returning phone calls” may need to decouple their burn rate from the unpredictable timing of a return to normal partnership activity.
  • Runway extension is more than just holding monthly burn rate constant — presumably following a reduction relative to budget) to make cash last until the market turns. You have to plan for (1) time to raise your next round and (2) ability to meet milestones in advance of raising the next round. In the illustrative exercise below planning monthly cash burn over time (original budgeted case depicted by blue line), cash out is assumed to be December 2021, which may require fundraising to begin June 2021 at the latest. The company had planned for an increase in spend to begin April 2020 and just over a year of time for go-to-market activities and production developments to support milestones.

    To both extend runway (here, depicted in red and green lines) and keep the company on a trajectory to increase value for a future round, the company needs to think creatively to achieve some combination of:

Maintain same area under the curve:

1.) reduce non-essential expenses and prioritize spend on value-creation activities important to future funding round

2.) Reallocating fixed capital to monthly burn, e.g., reducing your original capital expenditure plan or other fixed costs

3.) reducing go-to-market spend — i.e., a change in the pitch of the spend ramp — without sacrificing too much on value-creation milestones

Increasing area under the curve:

4.) raising additional debt capital or other non-dilutive funding

  • From a CFO partner who works with 7–8 startup companies: We are working with 7–8 clients and March to June 2021 is the bare minimum to where you want to extend the runway. Many clients don’t think business will ever return to normal. For example, in real estate, folks are breaking leases because they don’t believe employees will go back to the office even after things lift.
  • From another advisor who is working with multiple startup companies: Companies should aim for 12–18 months to get through mid-2021. A very well-respected VC that has worked with Andrew and me advises companies to aim for even longer, 18–20 months, potentially into 2022.

Budget planning and revisions will require some tough decisions by most companies.

  • It will be important to consider short- vs. long-term impacts. You cannot simply take the axe on your budget to target a particular cost-cutting threshold. At the same time, it will be difficult to invest heavily to build the business in the way you originally had in mind. Balancing what expenses to cut while (1) still targeting milestones that build a strong investment case for future investors & partners and (2) investing for the future will be delicate but essential. Many companies need to build strategies to maintain basic operations while sustaining relationships and progress with strategic partners, advancing R&D and product development efforts, and continuing commercialization and scale-up activities.
  • Even companies that have recently raised significant capital have taken a hard look at their expenses and reduced their budget down to the most essential activities that achieve the right milestones and deliver shareholder value. One analogy used here by one of the CEO’s: it’s like we are flying an aircraft under very low visibility conditions, and need to use IFR (instrument flight rules) — operating without visual references and relying on your instruments only. You need very precise instruments (i.e., a highly-accurate budget with many contingency levers) and need to react real-time.
  • A well-reasoned budget will create room for optionality. Many CEO’s have extended their runway to get to a reevaluation point later in the year, at which time they may present an updated budget proposal to their investors and board based on an updated picture of the COVID-19 impact. It will be risky to maintain monthly spend levels or capital purchase plans if such plans are predicated on too many external factors outside of the company’s control:
  • Are there signs of life with customer demand returning for your product/service?
  • Are partners answering calls and able to commence with collaboration or joint distribution deals?
  • Are regulators back in the office and able to give visibility on timelines for required approvals?
  • Have restrictions on social distancing for production eased? Is it safe to bring workers back to the workplace or factory?
  • Is travel reopening to be able to meet customers and partners to consummate deals?

Levers of cash management are many, but CEO’s will have to think creatively while making tough decisions.

  • Payroll/salaries tend to be the largest cost category for many startups and an obvious place to start. CEO’s have considered a range of different approaches, including shifting to a more variable cost/labor model, deferral of salary, compensating with equity in lieu of cash, providing bonuses on the back-end, etc. Teams have also reduced costs through renegotiation of other obligations (leases), deferring payments, shifting to in-kind payments, etc. Cash on-hand is king.
  • One CEO who has lived through multiple downturns structured his workforce with 30–40% as contract employees to provide maximal flexibility, and it has helped him weather this period more smoothly.
  • Consider revisiting terms of strategic collaborations, as partners may be more willing to compromise during this time. Find ways to get more upfront cash payments, cost-sharing, and other in-kind support. Some collaborators (including government pilots) may be willing to modify the scope of projects to better align with your company’s core R&D spend.

3. Business development could be much more difficult during the COVID-19 crisis, with partners and customers dealing with a new set of problems and limitations on on-site meetings, so finding ways to “level the playing field” will be crucial.

Be nimbler than the competition. Downturns can present business development opportunities to startups that otherwise don’t exist in peacetime. More established companies may be less nimble and are tied down to existing business models and distribution modes. Startups have an opportunity to catch up or overtake giants in a way they don’t have in peacetime.

Build trust.It is more important than ever to continue building trust with strategic partners. Given decisions may need to be made on partnerships with limited to no face-to-face meetings, everything that contributes to building trust by proxy — your ability to deliver, what other partners and investors say about you or your product — becomes even more relevant and critical.

Break geographical barriers. Is there an opportunity to look at the global picture sooner? China and other parts of Asia have reopened their economies and will be doing everything they can to reverse the slowdown in the coming quarters. Being early to reorient business development activities to that part of the world could provide another important avenue to market.

Double down on key innovation and differentiation. Large companies have to slow down at this time and manage through a much larger scale of transformation to their businesses, giving startups a window of time to accelerate and out-innovate.

Proactively align interest with key stakeholders. With strategic partners all working from home, it may be easier to reach top-level decision makers who otherwise are too busy to meet with you. The reduction in travel logistics and internal meeting coordination may afford more time in the day for busy executives. For these executives who survive the initial culling at large companies, their career may depend on driving growth, and they may be more willing to take chances and partner with new technology companies that can help achieve that. More executives will be thinking about how to be relevant and ready in a post-COVID world, so finding ways to communicate your ability to help partners achieve that will be important. It’s crucial to be persistent so that when partners come back online, you are in a good position to continue making progress.

Rethink your distribution strategy. Given social distancing and sectors like physical retail, travel, hospitality, and restaurants slowing down dramatically, exploring distribution channels — in and out of the U.S. — that are more robust than in peacetime is important. Are there online, direct-to-consumer opportunities? Are there segments that you can attract online that would typically be difficult to target during peacetime? Are there global partners that you can work with sooner than you expected?

At the same time, many industries that are getting hit hard will need to aggressively spend marketing dollars and innovate on their products to get customers back, so you may need to parallel process. Startups that time this dynamic well may be able to manage through this crisis better than large companies whose channel strategy is already fixed. The ability to adapt is key.

Rethink target markets. Many startups have products with multiple market applications. Pre-launch companies have the ability to reprioritize their development efforts to target sectors that will be less affected by COVID-19. One of the CEO’s discussed the method by which is team reviewed their product matrix to shift focus on sectors like aviation and automotive in favor of customers in the luxury sector who were much more eager to deal in the near term.

Rethink operational strategy. Startups have had to get creative on how to manage their operations. One company brought up the example of their fulfillment center being in danger of getting shut down. In order to stay open, they ended up partnering with a food service fulfillment facility — a completely unrelated business — to leverage the unused factory space that was still in operation being an essential service. It was important in this uncertain environment to line up alternatives.

4. Team morale and culture becomes difficult to manage in a remote work environment, but more critical given the personal impact COVID-19 disruption can have on all employees and senior leadership.

There was general consensus that managing through a crisis together can be an opportunity to strengthen team dynamics. Several CEO’s have found that their team has bonded much closer together since the onset of the crisis.

Some CEO’s found it doubly important to take a more proactive approach with their teams, including having regular check-ins individually, creating virtual opportunities to replicate interactions that would have taken place in an in-person environment (like “walking the factory floor”), and finding creative ways for social gatherings online.

Some CEO’s have found it a useful exercise to get everyone to review their priorities frequently and on an individual basis. It helps anticipate frustrations and misunderstandings, which can be hard to catch and mitigate over Zoom. It helps align priorities and create clarity, which are essential during this time.

It is important to think of “team” in a broader sense, including partners and suppliers, and check-in on them. During a crisis, people remember those who took the time to nurture the network and relationship and share optimistic and positive news to build collective resilience.

5. A global perspective is even more critical during this time of uncertainty, and CEO’s cannot be too U.S.-centric and forget the rest of the world, which may be recovering faster or reopening markets on an accelerated pace.

It is clear that the recovery in Asia has begun, and governments are aggressively focusing on repairing their economies and restoring growth. Assuming distribution channels can be harnessed, these markets can be a key source of revenue growth. One participant has seen steady growth in Asia during this period, with 30% of their business now coming from this region — much faster than they previously expected. Companies like Impossible Foods and Beyond Meat are dramatically accelerating their efforts in this region given the growth potential, ability to access wider channels, and local demand that has increased.

Find on-the-ground resources or contacts that can inform you how customers and partners are acting in other geographies. Asia, due to its prior experience with SARS and other pandemics, appears to have been much stricter on COVID-19 procedures and have had a much lower viral penetration (notwithstanding lack of clarity on reporting from places like China). Based on the input of several of the participants, here are some of the current perspectives:

  • Taiwan recovered quickly and is most operational out of the Asian countries; one of the participants has accelerated their launch here.
  • Hong Kong is returning to normal operations, with retail stores, restaurants, and most businesses opening with clear social distancing policies in place.
  • China (BJ/SH) is operational, but people are still avoiding retail stores / restaurants / large gatherings.
  • Japan, Korea, and Singapore are in the middle, seeing increasing shifts to online consumption, but there continue to be challenges with a potential second wave.

Filed Under: News

Andrew Chung Shares His Views on Climate Tech During GreenBiz Webcast

June 29, 2020 by Charlie

A massive shift has been happening in the world of investment regarding CleanTech, with several investors realizing the importance and potential of such companies. This has particularly been the case with“climate tech”— a term used for companies that specialize in technologies designed to address climate change. This includes those working on renewable energy, infrastructure innovations, carbon reduction, and other climate-focused technology.

On May 28, 2020, entrepreneur and venture capitalist Andrew Chung had the opportunity to share his views on climate tech during a webcast, “This Is Climate Tech,”hosted by Greenbiz. While at investment firm Khosla Ventures, Chung launched several CleanTech companiesaimed at combating climate change and developing and implementing technologies that promote cleaner fuel, sustainable food products, and greener agriculture. He went on to found his investment firm 1955 Capital to help cultivate technologies that can be implemented in developing countries to solve their most critical challenges. The firm focuses on a diverse set of industries that include sustainable energy, emerging tech, education, health, manufacturing, and food. Itempowers innovators and entrepreneurs to gain access to markets in developing countries to accelerate technology solutions that create jobs and nurture partnerships for long-term growth and development of the region.

Chung was joined by two other experienced venture capitalists on the Greenbiz webcast, including Andrew Beebe, managing director of Obvious Ventures, and Nancy Pfund, founder of DBL Partners. The webcast was moderated by Heather Clancy, editorial director of GreenBiz Group. The panel discussed how climate tech has evolved over the years, why it is generating so much investor interest, what characteristics they seek in climate-focused entrepreneurs, and how the current economic downturn will shape the future of climate tech investing.

During the webcast, Nancy Pfund shared insights on the changes she has seen in the climate tech investing landscape. She noted that initially the investors in this space weren’t necessarily interested in being part of the initiative to combat the climate crisis. They were mostly following the money, balancing their portfolios, or dodging the dot-com bubble. Now, she noted, investors have demonstrated much more commitment to and awareness of climate techissues and a future with more green, sustainable, and climate-friendly technologies. According to Pfund, climate tech has a more “tangible quality” for investors due to more “visibility and popular movements” about the climate crisis.

Andrew Beebe shared how he started in the solar energy sector about two decades ago. Climate tech was a very niche market at the time, and not many investors were interested in it. He contrasted this with the entrepreneurs of today, who sense the urgency and want to be part of something new and innovative; they continue to be interested in profit, but are also focused on the company’s purpose.

Andrew Chung has been a part of climate tech investing for over 15 years, and he believes one thing that hasn’t changed is the massive markets in this space,with “a lot of areas in which entrepreneurs and visionaries can explore disruption.” Chung has invested in several startups in the area, including Nature’s Fynd, Lanzatech, and Quantumscape,and has seen a rise in government and institutional interest and funding in the climate tech sector.

As for the current economic downturn caused by the COVID-19 pandemic, Pfund said the crisis could be an opportunity for entrepreneurs to innovate and find solutions that will help fight the virus and better prepare the world to meet such challenges in the future. Beebe noted the COVID-19 pandemic is a “warm-up of global collaboration in terms of tackling systematic challenges together, and climate change is going to be the big show.” He pointed out that the pandemic has shown that supply chains need to evolve into more efficient models,which is going to be a large part of the investment landscape. The COVID-19 stimulus package offered in the United States has demonstrated that, even at the federal level, funding can be released with urgency when needed. Beebe asserted that such funding should also be directed towards climate tech projects.

Chung pointed out that the pandemic has revealed vulnerability in the sustainable food space,noting that “companies need to figure out more sustainable ways for food supply” and that this will be an important and high-potential market for investment. Chung also expects climate tech companies to form strategic partnerships with private corporations and government institutions. All three panelists maintained that the COVID-19 pandemic will act as a catalyst to add more urgency to the climate tech initiatives and product development that have already begun.

The panel was also asked how they evaluate the potential of a climate tech product or service that an entrepreneur pitches to them. Pfund shared that her company has developed specific metrics to evaluate the investment potential and environmental impact of a climate tech company. These metrics include the carbon footprint, diversity of teams, fossil displacements, the potential for job creation, return on investment, and more.

Beebe’s process of evaluation doesn’t include specific metrics, especially for fledgling startups, but he noted that he likes to evaluate the company’s overall impact on the climate. For him, the “value set of the founders” is extremely important because it shows how committed the company will be to the climate goal in the long run. He contended that many climate tech companies fade into more commercial ventures, and their original goal of creating a positive impact on the climate crisis becomes secondary to profit-making.

For Andrew Chung, the “technologies need to be highly differentiated” to attract investors, who get inundated with so many different products and services being pitched to them. Investors need to see something they’re not able to do themselves or that they haven’t already seen other companies do. Chung said he believes that the cost economics and the scalability of the concept are also very important to have a real impact on the climate problem.

Filed Under: News

Andrew Chung and VCs Assess COVID-19’s Impact on the Business Sector

June 15, 2020 by Charlie

The COVID-19 pandemic is affecting many businesses in ways we could not have imagined even just a few weeks ago. Even with most states partially or fully reopened, shelter-in-place laws have slowed our economy, due to the shuttering of retail stores, restaurants, startups, and other businesses.

In some cases, these businesses have already failed or are on thin ice and unsure whether they can survive this extreme downturn. Andrew Chung has been here before.

For more than 20 years, Chung has been an entrepreneur and investor. In 2016 he announced the launch of 1955 Capital for the purpose of, as he puts it, “investing in transformative companies that can solve the most pressing issues in the developing world.” Today 1955 Capital has grown into a global venture capital investment firm, with Chung serving as managing partner.

For the past 10 years, 1955 Capital’s investments have focused on areas related to energy, healthcare, food, agriculture, education, and sustainable marketing. The firm primarily pursues investments that Chung believes will give a “long life to both people and the planet.”

Chung has advised business owners in the past on how to weather a storm similar to COVID-19. Living in Greater China during the SARS epidemic in the early 2000s, he witnessed how dramatically and quickly a pandemic can affect businesses. His astute advice may help those in suffering businesses move from a place of fear to emerge on the other side of the crisis in an advantaged position over their competitors.

Surviving the Pandemic

While business owners stay focused on survival, Chung offers several active steps they can take to preserve their business. Some key advice from Chung:

  • Ensure the safety of the team.

Requiring social distancing and work from home (WFH) policies remains essential as infection rates continue to increase. Also, follow guidance from the Centers for Disease Control and Prevention (CDC) on keeping the workplace safe.

  • Minimize financial risk.

Continue to build deeper partnerships with your funding partners so you have their support if things continue to get worse. Unfortunately, some types of businesses may not survive the long-term effects of this crisis. Working and communicating proactively with your partners may help mitigate this risk.

  • Proactively address failure modes.

Be prepared for all eventualities. Scenario plan extensively. Recovery is unpredictable, and most expect it will be much slower than the SARS crisis in the early 2000s.

  • Make budgetary contingency planning.

Plan for all possible contingencies. Take an “if/then” approach. Reduce all non-essential spending, then plan for additional spending considering what will likely happen 3, 6, and 12 months into the future.

  • Prepare for fundraising to be difficult.

Many venture firms are themselves in crisis mode but there are companies that can help your business. For example, 1955 Capital focuses on providing strategic assistance to companies. Prioritize investors with whom you already have a relationship.

  • Turn everything you possibly can into an advantage.

Brainstorm ways to survive. Creativity may be what gives you an advantage over slower-moving competitors as you learn to thrive in this environment that remains quite uncertain.

  • Project a sense of calm. 

If employees perceive the CEO or other executives are managing things decisively, it helps allay their concerns. It is critical to employee morale to feel that the person at the helm is seeking ways to assist them and keep the business afloat if at all possible.

Pursuing opportunities

If a change turns out to be needed, some business owners may decide to pursue other opportunities. One area of growth is in the food industry — after all, people still need to eat, they need grocery stores and other retail food businesses, and food processing plants have been deemed essential businesses by governments worldwide.

Ahead of this trend, Andrew Chung has been leading the way with investment in AgriFoodTech industries.

AgriFoodTech and 1955 Capital

AgriFoodTech investors at this time have been “comparatively lucky,” according to Adam Anders of Anterra Capital, having seen sales increases for both online products and retail markets. Even so, like all businesses, the AgriFoodTech sector has been disrupted by the pandemic. Growers and agricultural processors have stripped operations to essential functions and products. Supply chains have suffered as workers become ill or choose to stay at home in order to avoid becoming sick.

In the meantime, people still want to know where their food comes from. Smart investing at this point will relate to businesses involved in increasing food production in ways that reduce waste and improve safety. In this domain, Chung remains “optimistic that there will be no slowdown of great ideas and an increasing number of entrepreneurs, both born of necessity in this difficult time.”

1955 Capital’s Investment in Nature’s Fynd

Nature’s Fynd has been a company in the AgriFoodTech industry to fit the profile for 1955 Capital investments. Nature’s Fynd, originally called Sustainable Bioproducts, it was founded in 2012 with the mission of “producing nutritional food products that are kind to the environment without using animals.”

The company discovered a microbe in Yellowstone National Park that can be used to make non-animal sources of complete protein foods, including alternatives to meat and dairy products. The company was recently rebranded as Nature’s Fynd.

In late March 2020, 1955 Capital announced it would make a second substantial investment in Nature’s Fynd. According to the press release, the funds will be used to “scale its operations in order to commercialize its products with minimal environmental impact.”

1955 Capital was the lead investor in the Series A funding for Nature’s Fynd and made a substantial investment in the Series B. This remains 1955’s largest single investment to date.

Chung, who has been on the company’s board since 2018, says that Nature’s Fynd has:

“developed tasty products across multiple food groups faster than any other food tech company that 1955 Capital has seen. Their elegant manufacturing process supports a scalable and cost-effective production method that will be critical for achieving competitive pricing, particularly in developing world markets where this technology is most needed. With the global impact of livestock-related illnesses like coronavirus and swine flu that have disrupted the world economy, it’s more critical than ever to build a clean and sustainable food supply.”

The new funds will be used primarily for Nature’s Fynd to begin production in its new 35,000-square-foot manufacturing facility in Chicago and to increase its workforce from 50 to 100 by the end of 2020.

Filed Under: News

Ideamensch Interview with Andrew Chung

June 15, 2020 by Charlie

Andrew Chung is the founder and managing partner of 1955 Capital, a venture capital firm founded in 2017 to invest in and help promote companies that address the developing world’s most pressing challenges, especially as they relate to energy, healthcare, food, agriculture, education and sustainable manufacturing. Chung has more than 15 years of experience in investing, including stints at Khosla Ventures and Lightspeed. He has served on a White House roundtable on advanced manufacturing and has advised global leaders on energy policy. Chung has served on the board of or advised more than 20 companies.

Andrew Chung is also an accomplished singer and musician. Before pursuing a business career, he was a finalist on the “Hong Kong Idol” competition and turned down a recording contract with the top label in Asia. Chung is a graduate of Harvard University and the University of Pennsylvania’s Wharton School of Business. He lives in northern California with his wife, Coral, a fashion designer and CEO of Senreve, and his daughter.

Where did the idea for 1955 Capital come from?

1955 Capital was started with the mission to invest in and help promote companies that address the developing world’s most pressing challenges related to energy, healthcare, food, agriculture, education and sustainable manufacturing. It was a trend that I became interested in when I was general partner at Khosla Ventures, where we invested early in companies like plant-based burger maker Impossible Foods and carbon capture technology maker LanzaTech. I wanted to double down on that trend at 1955 Capital.

I believe that the only truly sustainable way to invest is by identifying breakthrough technologies that not only benefit the planet as a whole, but also generate significant financial returns for investors. Issues like climate change and food supply shortages affect billions of people around the globe. By investing in promising companies that are centered around these areas, we can not only help with people’s bottom lines but also help the planet along the way. It’s a powerful way of combining passion for investing with a passion for making the world better in the long-term as well. But you need market-beating returns to incentivize large-scale institutions to keep investing in the category.

What does your typical day look like and how do you make it productive?

Because I’m involved in so many different ventures, it’s hard to pinpoint what exactly a ‘typical’ day is for me. But productivity is all about focus— it’s so easy to get pulled in a thousand different directions and allow your attention to be constantly fragmented. It’s important to decide ahead of time how you’re going to spend, say, the next hour. Be very protective of that blocked time, and consider anything that deviates from your goal for that block to be a distraction. Obviously, emergencies or time-sensitive matters will come up, but it’s all about prioritizing one task at a time. Multitasking, as science has shown us, just isn’t as effective as we would like to convince ourselves.

How do you bring ideas to life?

Work, work, work. I think that too often we have an idea, and we believe that we can continue to let it live in our heads until it magically springs out as this fully formed creation. But the truth is that as soon as you have a concept or beginning of something that inspires you, you’ve got to get down to business on the concrete work of it all. You have to get it out, produce something. The first iteration might be bad, and the second, third, and 100th. But it isn’t until you get down to concrete work that those ideas will start to take shape into something real.

What’s one trend that excites you?

I’d have to say it’s ClimateTech and the increasing number of companies, both in the United States and overseas, that help combat climate change and enable governments, corporations, and individuals to take action. More and more people and governments are starting to wake up to the importance of climate science, and as time goes on, we’re recognizing that only dramatic innovation is going to combat climate change to the degree that we really need. Small, incremental changes, while important, simply aren’t going to be enough anymore. We’re going to need bold, inventive strategies for change, and those are beginning to appear within some truly revolutionary and innovative organizations. We’re not afraid of backing moonshots.

What is one habit of yours that makes you more productive as an entrepreneur?

I think it’s important as an entrepreneur to be bold, be fearless, and be willing to fail. You need to have a large appetite for taking a risk and being told “no” many times. It’s a hard thing to teach, but I’ve been lucky enough to manage that delicate balance between investing capital safely while taking calculated risks that others may fear. It has served me well so far.

Another habit is asking questions. Too many professionals and investors don’t like asking questions, because they worry it will give the impression that they don’t know what they’re doing. But the smartest people in the room got that way by always asking insightful questions about things they don’t fully understand. They stayed curious and humble enough to admit when their expertise fell short. That’s how you start filling in gaps in your understanding.

What advice would you give your younger self?

That there is no one-size-fits-all solution. Each company and each situation is different, and what works the last time with another company might not be the right answer today. Unfortunately, there’s no template— you have to use your judgment for each individual decision, rather than a catch-all approach that would make things a lot simpler.

Tell us something that’s true that almost nobody agrees with you on.

That cleantech and “save the world” companies and the sector as a whole can’t generate sizable returns. I’ve invested in these categories for close to 15 years, and seen investors come and go, firms enter and leave the space – many have failed. I’ve been fortunate to be with firms that have invested successfully in these areas.

At Lightspeed, we invested early in Nest Labs, Solazyme, SolarEdge, Quantumscape, Personalis, Natera – companies in beneficial sectors that had IPO and M&A exits or recent private rounds collectively at over $10 billion. At Khosla, we were early investors in Impossible Foods, Guardant Health, Lanzatech, among many others. With the current pandemic going on, the importance of these “essential” technologies that address critical human needs – like access to healthcare, sustainable food supply, clean energy – is more important than ever, and investors are recognizing that more and more.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Find that emotional connection with your teammates and business partners. The only way you can reach many of the world’s top executives and have them listen to what you have to say is by generating an emotional stake in the technology you’re promoting. It can never be just about money or about data. You have to tell the story in a way that resonates emotionally with your audience.

What is one strategy that has helped you grow your business?

Making every minute of my time count. After the birth of my daughter, I really came to appreciate good time management. Like all parents, I want to spend as much time as possible with my family. That makes me weigh carefully every trip, every meeting and every event I attend to make sure I get the most value from that activity. It’s really helped me to become a better businessman, a highly engaged father, and supportive husband to a successful CEO wife.

What is one failure you had as an entrepreneur, and how did you overcome it?

Letting perfection be the enemy of the good. In the earlier part of my career, I started too late on some ideas that existed in my head for some time (e.g., a video sharing site that ultimately became YouTube) because I wanted the plan to be thoroughly fleshed out before launching anything. I learned early that it’s important to be willing to take some risks as an entrepreneur and constantly be launching and testing ideas.

What is one business idea that you’re willing to give away to our readers?

There are so many! Where to start? With COVID-19 having profound implications on the future of education, I’d like to see more startups creating better experiences for students that are forced into full- or part-time remote learning, increased educational support for retraining a work force that will become much more dynamic in this new world, and platforms that can reinvent the way certification works (what is the value of a degree in the new world?). In the food technology space, Impossible Foods and Nature’s Fynd are just the first in a wave of companies that will reinvent the supply chain. Pick a food group and find new technology to support its sustainable production. Pick a business model and try to find a way to reinvent it. Looking back on how much has changed in just 2-3 months, an upheaval in the food industry is on its way.

What is the best $100 you recently spent? What and why?

Last fall, my wife, Coral and I took our young 6-year-old daughter to see “Hamilton” (the musical). Our friends thought it might be too much for her, but she loved it. It was her first history lesson. She now knows Washington as America’s first CEO with Hamilton and Jefferson as his co-founders, and that they fought a war so that people in America could be free “like the kids at her school.”

What is one piece of software or a web service that helps you be productive?

I’ve come to appreciate the power of Zoom, Google Hangouts, and Facetime in this new post-COVID world. While it can never replace human-to-human interaction, the recent quarantine has reminded how these apps enable anyone in the world to be one click away.

What is the one book that you recommend our community should read and why?

“Reducing the Risk of Black Swans: Using the Science of Investing to Capture Returns with Less Volatility” by Larry Swedroe and Kevin Grogan. This book takes Nassim Nicholas Taleb’s classic theory of how extraordinary events can disrupt the marketplace and adapts it to the 21st century.

What is your favorite quote?

“The most outsized achievements come from those who are contrarian and right.”

Key Learnings:

  • Andrew Chung’s success has come from his following his passions – first in music and later in technology and venture capital – and going against the grain. Taking a contrarian approach and betting the right trends has helped Chung succeed at some of the VC world’s preeminent firms.
  • Chung’s diverse interests and focused work ethic help him find promising early-stage companies, compelling entrepreneurs, and world-changing ideas that match his VC firm’s investment goals.
  • Being exposed to entrepreneurship at a young age helped Chung to launch and advise companies before he was even out of college.

Filed Under: News

Andrew Chung, Founder of 1955 Capital, to be Featured on “This Is ClimateTech” Webcast from GreenBiz Group

May 26, 2020 by Charlie

SAN MATEO, Calif., May 26, 2020 /PRNewswire/ — On May 28, 2020, at 1 PM Eastern, Heather Clancy of GreenBiz Group will host “This is ClimateTech,” a webcast featuring Andrew Chung, the founder and managing partner of 1955 Capital.

In the world of climate technology, there is a broad range of emerging innovations that are of great interest to venture capitalists. Climate change is an ongoing crisis, and amid COVID-19, interest in developing technologies to combat its effects has grown since recent economic disruptions have highlighted the systemic shortcomings of our current economy. Alternative protein sources, industrial decarbonization, alternative fuels, net-zero construction, precision agriculture, carbon capture solutions—all these innovations have proven to be worthwhile investments because they help create a more sustainable and fair global economy.

Andrew Chung of 1955 Capital will take part in the “This is Climate Tech” panel which will also feature Andrew Beebe, managing director of Obvious Ventures, and Nancy Pfund, founder of DBL Partners. Topics for the webcast include areas of climate tech that venture capitalists are actively cultivating and why, the characteristics each seek in a climate-focused entrepreneur, and how the economic downturn brought on by the coronavirus pandemic could change funding in 2020.

Andrew Chung is no stranger to climate technology and other sustainable innovations. His firm, 1955 Capital, was founded on investing in businesses that create transformative solutions to some of the biggest challenges facing the world. This includes investments in food, agriculture, environment, health, education and more.

Before launching 1955 Capital, Andrew Chung was a general partner of Khosla Ventures, a preeminent investment firm with over $5 billion in investments—the world’s largest venture investor in sustainable technology. At Khosla, he personally managed more than $500 million in assets, advising or serving on the board of directors of more than 20 companies — including Lanzatech, Wattpad, Impossible Foods, Quantumscape, BioConsortia, LS9, and Ambri.

Andrew Chung is a thought leader in the sustainable technology world, previously serving on an Obama Administration White House roundtable dealing with advanced manufacturing. He was invited by U.S. Ambassador to China, Max Baucus, as a special advisor to a historic 2015 U.S.-China presidential trade mission led by Secretary of Commerce Penny Pritzker and Deputy Secretary of Energy Elizabeth Sherwood-Randall. He has given numerous talks about future innovations in food, energy, and U.S.-China relations, and also advised numerous global leaders on energy policy.

The live “This is ClimateTech” webcast will be hosted by GreenBiz Group on May 28 at 1 PM eastern time, and will be moderated by Heather Clancy, the editorial director of GreenBiz Group. For registrants who are unable to attend the live webcast, archived footage and resources will be available for viewing after the event has ended. Register here: https://www.greenbiz.com/webcast/climate-tech

About 1955 Capital

1955 Capital was founded by Andrew Chung to invest in companies that can address the developing world’s most pressing challenges related to energy, healthcare, food, agriculture, education and sustainable manufacturing. With over a decade of experience investing in these sectors at leading global firms like Khosla Ventures and Lightspeed Ventures, Chung has experience in identifying technologies with significant impact potential in developing countries and supporting entrepreneurs in developing mutually productive partnerships. The firm is based in San Mateo, California.

Contact:
Robert P. Varian
Orrick Herrington & Sutcliffe LLP 
rvarian@orrick.com

SOURCE 1955 Capital

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