Welcome to this week’s episode of Equity, the podcast about the business of startups. We’re excited to share with you an in-depth conversation with Anu Hariharan, a seasoned investor and expert in the startup ecosystem.
A Conversation with Anu Hariharan
Anu Hariharan is a well-known figure in the startup world. She has previously worked with top venture capital firms like a16z, sits on the board of Brex, and has been investing in later-stage companies at Y Combinator. Recently, she made some interesting comments about "great" founders and their ability to guide their companies towards cash flow positivity.
As it turns out, her words were prophetic. Just after our conversation, both Instacart (a former Y Combinator company) and Klaviyo filed to go public, and both have impressive cash flows. This conversation could not have come at a better time, as we dug into the strategies that early- and late-stage startups should employ for growth and cash conservation.
Cash flow is often cited as one of the most critical aspects of running a successful startup. However, it’s not just about generating revenue; it’s also about conserving cash to ensure sustainability. Anu emphasized that great founders understand this delicate balance and make informed decisions to guide their companies towards profitability.
In her view, early-stage startups should focus on building a strong foundation, experimenting with different business models, and iterating quickly based on user feedback. This approach allows them to conserve resources while maximizing growth potential.
On the other hand, late-stage startups need to prioritize cash flow management more aggressively. Anu stressed that great founders in this stage understand the importance of maintaining a healthy cash reserve to navigate unexpected challenges or opportunities.
The Future of Venture as an Asset Class
Anu’s thoughts on venture capital as an asset class were also enlightening. She noted that while the unicorn herd has grown significantly over the years, there is still uncertainty surrounding the long-term viability of many startups. As a result, investors are becoming more discerning and focusing on companies with strong cash flows, sustainable business models, and a clear path to profitability.
This shift in investor behavior has far-reaching implications for the startup ecosystem. Anu believes that great founders will adapt quickly to this new landscape by prioritizing cash flow management, experimenting with innovative business models, and building robust growth strategies.
The State of the Unicorn Herd
One of the most pressing questions in the venture capital space is: what’s happening to the unicorn herd? While some companies are thriving, others are struggling to maintain their valuations. Anu offered some insightful commentary on this topic, emphasizing that great founders recognize the importance of maintaining a strong cash position and making strategic decisions to drive growth.
In her view, the current state of the unicorn herd is a result of various factors, including changes in investor behavior, increased scrutiny from regulators, and shifting market conditions. Great founders will respond by prioritizing adaptability, focusing on sustainable growth, and building robust business models that can withstand uncertainty.
Our conversation with Anu Hariharan was both enlightening and timely. As the startup landscape continues to evolve, it’s essential for entrepreneurs and investors alike to understand the importance of cash flow management, experimentation, and adaptability. Great founders recognize these principles and make informed decisions to drive growth while maintaining a strong cash position.
If you’re interested in learning more about Anu Hariharan’s views on venture capital, startups, and innovation, we encourage you to explore her previous work and current projects. You can also listen to our full conversation on the Equity podcast, available on all major platforms.
Links and Resources
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About Anu Hariharan
Anu Hariharan is a seasoned investor and expert in the startup ecosystem. She has previously worked with top venture capital firms like a16z and sits on the board of Brex. Most recently, she’s been investing in later-stage companies at Y Combinator.
About Alex Wilhelm
Alex Wilhelm is a senior reporter for TechCrunch, covering markets, venture capital, and startups. He was also the founding host of TechCrunch’s Webby Award-winning podcast Equity.
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