Podcasts are becoming big business — in part because of how well they can attract and keep audiences at a time when so many other media formats are finding it hard to pin down that elusive metric of engagement. Now a podcast host who has built out a popular series around the world of startup investing is leveraging that growth to build out an investment vehicle of his own. Harry Stebbings, the 24-year-old London-based creator and host of The Twenty Minute VC, is launching a micro VC fund of $8.3 million. Called 20VC, the plan is to invest in U.S. startups across various stages alongside “tier 1” co-investors.
Stebbings spends a lot of his time talking to investors and about investments, and this is his second foray into actually putting money where his mouth is. He’s also a partner at Stride.vc, a firm he co-founded with Fred Destin in 2018 (joined later by a third partner, Pia d’Iribarne). He says that 20VC is scratching a different itch. The older fund focuses on investing in the U.K. and France, and has an inclination (but not exclusivity) toward e-commerce disruptors and earlier stages of investment.
Stebbings’ newer effort, on the other hand, focuses on the U.S., and is positioned within what seems to be shaping up to be a typical micro fund profile. Micro funds, as the name implies, are usually not huge, but they aim to pack a punch by offering other skills in the mix with their smaller investments. The concept has been growing in popularity over the last several years. (“I don’t know anyone who isn’t involved in at least one $5 million micro fund,” one former VC said to me.)
In the case of 20VC, it hopes to get its foot in the door on deals of other VCs by offering Stebbings’ own set of skills in building and scaling companies as the selling point in exchange.
Typical deal sizes will range from $100,000 to $300,000 ($250,000 is the typical check size), and although Stebbings is announcing the fund today, some 12 investments have already been made out of it (Nex Health and Spiketrap are the only two that are public so far), investing alongside Sequoia, Index, Founders Fund and a16z.
20VC’s tie to the name of the podcast is intentional. The podcast has developed a brand of its own in the world of tech, with some 200,000 subscribers and 80 million downloads to date of the twice-weekly program. And 20VC isn’t just trading on Stebbings’ own experience as an entrepreneur: it has tapped the network of people that have been on the show, or know him because of the show, to assemble LPs.
There are some 64 of them in all, including founders and current and former execs from Atlassian, Yammer (David Sacks), Plaid (William Hockney), Superhuman, Airtable, Calm, Cazoo, Zenly, Alan, Spotify (Shakil Khan) and Tray.io; GPs from Kleiner (Mamoon Hamid), Social Capital (Chamath) Thrive (Josh Kushner & Miles Grimshaw), Atomic, Founders Fund (Brian Singerman), Coatue, Index (Danny Rimer), True Ventures (Phil Black) and Beezer Clarkson, among many others. Having a popular podcast that highlights interesting investors and startups turns out to be a good way of networking to build a fund. Stebbings said that the call out was oversubscribed three times over within four weeks.
Stebbings’ entry into the world of investing in startups is something of a typical startup story of its own.
He came up with the idea for his podcast at a time when he was already intrigued by the world of venture capital, but was actually on the road to something else, with a place as a law scholar at Kings College in London (in the U.K. you start law school as an undergraduate).
He says he started the podcast with the idea of working on something that interested him, but more specifically to make some money. His mother has multiple sclerosis and she was having issues paying for her healthcare. Stebbings decided to start the podcast to use the money it made off advertising to help cover his mother’s medical bills.
He was a nobody in tech, but he had a very specific plan, and a lot of smiley and positive enthusiasm, for how to get from zero to hero.
It started with finding just the right first guest, someone who had a high profile and respect but also appeared to be nice enough that if you got the approach right, you might get an agreement to be interviewed, or as Stebbings described it, “low-hanging fruit.”
For Stebbings, that person, it turned out, was Guy Kawasaki. In addition to getting the interview, Stebbings also asked Kawasaki for three recommendations of people he should have on the show next, and what he should ask them. Stebbings followed that up with asking those three for their recommendations, and so on. Pyramid scheme with purpose, I guess you could say.
“I view distribution quite scientifically,” said Stebbings — who I interviewed sitting in a bedroom, although I think he normally podcasts these days sitting in a studio as pictured, above. “I’m bringing as many people as possible to help in the content creation process.”
The whole format of “20 minutes” also stemmed from a calculation Stebbings made. He told me he used to struggle with his weight and finally managed to lose some pounds using Tim Ferriss’ 4-hour Body. It got him thinking about how timing is important, and on top of that he knew that the typical commute in London was around 30 minutes, and decided that 20 minutes was a reasonable amount of time to expect someone to listen regularly. (Spoiler: Most of the podcasts these days are not 20 minutes, but longer.)
Things started to shift from interesting side hustle to main hustle after he featured Arielle Zuckerberg, Mark’s sister and a tech persona in her own right (she’s currently a partner at investment firm Coatue). That podcast saw 100,000 downloads, and all signs pointed to The Twenty Minute VC taking off. So he quit university to focus on the podcast full time. It was four weeks into his first term.
“I decided I love VC and all of this,” he said about his choice to drop out of school. “I decided that I’d rather have my shot at this than trying to live the life I didn’t want to live. It was a big decision. I was 18 and very unemployable at the time.”
As for his mother’s medical bills, they are still being paid for by the show, he said.
“There’s advertising at the beginning and end of the show. It’s fine, not lights out, but it pays for my mother’s healthcare and that’s all I need it to do.”
The show, and Stebbings himself, have benefited from a perfect storm of circumstances to grow.
Podcasts have been around for years, but it’s only been in recent times that they have properly taken off in popularity. Leveraging mobile phones and apps for listening, they fit naturally into our multitasking, information-hungry routines; there is a huge variety out there, a podcast for every taste; and they’ve bettered the talk radio format by being there right when you need them. Having a very predictable program in that format — Stebbings’ show has been running twice a week, every week, for five years now — is not to be underestimated.
There is also the subject matter to consider. There has been a huge explosion in the role that technology is playing in our modern society and economy, and that has meant an audience that consists not just of those already working in the world of tech, but those with ambitions to be a part of it (like Stebbings himself), and simply a lot of enthusiasts.
Within that, venture capital has seen a veritable explosion of money, and while some believe that it’s the technical talent that fuels the startup engine, others would make a strong case for the funding that enables them to work holding that role. In any case, money has always held a lot of allure.
“VC is becoming more popular, and cool, and I think that had a lot to do with us getting to this size,” he said.
Stebbings himself is also a part of the formula. He’s not a journalist, and at a time when we seem to be seeing a lot of wariness and tension in the relationship between media and the tech industry, his position as an informal reporter and conduit of information and messaging, who remains friendly and non-combative with his guests, may see him getting a lot warmer of a reception from his target audience of guests and listeners.
Harry doesn’t seem to remember this, but I first met him several years ago, at a tech event in London, where he was working the room very smoothly, smiling and chatting and knowing enough people already that he was able to continue the momentum introducing himself and presuming familiarity with those he was just meeting for the first time. I remember being struck at the time by how young he was, mingling amongst quite a lot of middle-aged types.
When I recalled this and asked Stebbings if he ever felt like he’s found a place in this scene precisely for this reason — being around younger and flattering people sometimes makes older people feel less old, and possibly more important — he said he thought it was more that it’s about himself feeling natural in that environment.
“For me, it’s always about building relationships,” he said. “I was always like the 50-year-old in the room when I was younger and I didn’t have many friends. I’ve made by best friends through the shows.”
Ironically, he says that these days he does get pinged by his older — that is, young and past — acquaintances who are hoping for connections to his powerful network to push whatever tech enterprise they are pursuing these days.
That’s not the only bit of irony in 20VC and Stebbings’ latest venture: the whole of his podcast was built from the ground up, funded by ads and not a penny of outside investment. It means that the lesson from Stebbings is not just how to grow and scale, but how to do so with no VC involvement at all.
That’s not the norm, however, and so this will be about bringing more along that proverbial check.
“Everyone in the valley has money, but very few have been part of an enterprise that has scaled to include contact machines and brands. I’ll have thousands of tips and lessons on scaling and customer acquisition costs. It’s about the cadence and distribution, and how to build a brand.”
Demand for central London office space sinks as thousands of staff work from home
Demand for office space in central London sank in the third quarter as staff at major occupiers such as banks, insurers and asset managers continued to work from home as a result of the coronavirus pandemic.
A survey from the Royal Institution of Chartered Surveyors showed that 77% of surveyors reported a drop in demand for London office space.
The survey comes as banks such as HSBC confirm they are looking at a hybrid model of remote working and office working that could lead to a steep drop in the amount of prime office space needed by financial-services firms.
Availability for London’s office space grew for the eighteenth successive quarter, the survey showed, with availability growing at the strongest pace since 2009.
Over the next year, prime office rents in the capital are expected to fall by 6.8% as demand shrinks.
Tarrant Parsons, RICS economist, said: “Occupier demand across the office sector remains in decline and may continue to come under pressure going forward as businesses reassess their office-space requirements following the increased prevalence of remote working.”
Deutsche Bank and HSBC are among lenders that have announced that they will embrace the model of workers who opt to spend some days in the office and some days out.
The announcements come as a Morgan Stanley survey found that some 63% of office workers said they believe their employers will allow one or two days working from home in the future.
About one in five, or 18%, in the bank’s survey said they think their bosses will allow even more days than that. More than 90% of London office workers have been working from home during the pandemic — the most of any major European city.
Surveyors who commented on the RICS survey predicted that the coronavirus pandemic could lead to long-lasting changes in the way that companies use offices.
David Apperly of Apperly Estates said: “The biggest impact of coronavirus will probably be long term for office demand; rental growth is likely to be subdued for 10+ years.”
Gregory McGonigal of Ashdown Phillips said: “We are highly unlikely to return to anything like we were all experiencing in 2019 for at least five years and certain sectors will be changed permanently. The pandemic has caused, and will continue to create, a seismic shift in the UK property sector.”
Simon Wood of Downing Intervention simply said: “Winter is coming.”
To contact the author of this story with feedback or news, email James Booth
BlackRock wants global standards for sustainability reporting
Previous demand for firms to follow with existing standards led to a 400% increase in compliance
BlackRock, the world’s largest asset manager, has called for the creation of a single global sustainability standard, claiming existing frameworks are making it difficult to compare companies and leading to confusion for investors.
“BlackRock is calling for convergence of the different private-sector reporting frameworks and standards to establish a globally recognised and adopted approach to sustainability reporting,” the $7.8tn New York-headquartered group said on 29 October.
BlackRock claimed the proliferation of existing disclosure initiatives, many of which are overlapping, has meant companies are reporting the same information more than once and that there is a lack of consistent and comparable data.
“We believe that this could be resolved by aligning and converging to establish a globally recognised sustainability reporting framework and set of standards,” BlackRock said.
“Ideally, these would be developed by those with domain expertise in the private sector and supported by public policymakers as they move to require more comprehensive corporate reporting.”
The call from BlackRock comes after it asked companies in January to publish their climate-related disclosures in line with the Sustainability Accounting Standards Board standards and the Task Force on Climate-related Financial Disclosures framework — two of the world’s major reporting standards.
BlackRock said it would consider voting against company management where sufficient progress had not been made.
Companies appear to have heeded BlackRock’s warning. According to a report by the fund manager’s investment stewardship team, by the end of September, there had been a 400% increase in companies reporting under the SASB standards.
“The uptick is encouraging,” BlackRock said. “However, one of the top challenges to greater adoption we hear from the directors and leadership teams is the confusion caused by the various frameworks or standards.”
Efforts are already under way to develop a common approach for sustainability disclosure.
The IFRS Foundation published a consultation in September to assess demand for global sustainability standards. The IFRS said it would assess to what extent it could help develop such standards if demand proved strong.
Also in September, a group of five sustainability-reporting organisations — the SASB, the Global Reporting Initiative, the International Integrated Reporting Council, the CDP and the Carbon Disclosure Standards Board — said they planned to work together to develop “a comprehensive global corporate reporting system”.
BlackRock has singled out an approach proposed by the IFRS Foundation as the “most practicable and likely to succeed”.
“Progress may take some time,” it said. “BlackRock will continue to advocate for TCFD and SASB-aligned reporting until a global standard is established.”
To contact the author of this story with feedback or news, email David Ricketts
Comment: Don’t overestimate the coronavirus recovery
At this point in the Covid-19 crisis, governments have only one good option: further aggressive fiscal stimulus complemented by coherent virus-containment strategies
The world economy has risen from the depths of the initial Covid-19 plunge. But the recovery has been tepid, uneven and fragile – and is likely to remain so for the foreseeable future.
Start with the good news. World merchandise trade has rebounded strongly, consistent with indications of a revival in household demand for goods in many economies, even as public-health restrictions and consumer concerns continue to hobble demand for services.
Moreover, financial markets have held up surprisingly well, with stock markets in many countries regaining or even exceeding pre-pandemic levels. Despite near-zero interest rates, banking and financial systems seem largely stable. And consumer and industrial demand has buoyed commodity prices, with even oil prices having recovered somewhat.
But as the latest Brookings-Financial Times Tracking Indexes for the Global Economic Recovery update shows, many economies are experiencing essentially no growth, or are even contracting. With private sector confidence depleted, and the struggle to contain the virus far from over, the risks of substantial and long-lasting economic scarring are on the rise.
This is true even in the economies that have returned to growth, such as the United States. In some ways, the US seems to have turned the corner. Industrial activity and the labour market have regained some lost ground. The unemployment rate is falling, and employment levels are up.
But unemployment remains significantly higher, and employment significantly lower, than before the pandemic. The increase in long-term unemployment, together with ongoing service sector disruptions, portends a difficult path to a more robust and sustained recovery.
It doesn’t help that fiscal stimulus measures have largely lapsed, and negotiations on a new relief package have repeatedly broken down. As household disposable income has declined, private consumption growth has weakened. Similarly, business investment continues to contract – a trend that does not augur well for sustained growth.
Even stock markets, which experienced a sharp rebound earlier in the year, seem to be taking a breather. This may reflect concerns about the virus-containment strategy (or lack of) being pursued by US president Donald Trump’s administration. In any case, as next month’s presidential election approaches, heightened political and policy uncertainty is likely to keep consumer and business confidence muted.
The eurozone is in even worse shape. Not only has the pandemic decimated short-term growth; deflation is now setting in, raising the risk of a deep and prolonged contraction. While manufacturing in Germany and elsewhere has rebounded, the positive effects are more than offset by the enduring services slump, reinforced by ongoing public health restrictions.
The United Kingdom’s services sector, by contrast, has experienced a revival. Yet the combination of erratic lockdown policies and far-reaching uncertainties surrounding Brexit are contributing to a continued economic contraction. Meanwhile, on the other side of the world, Japan is also in serious economic peril, though it has so far avoided sliding back into deflation.
Most emerging market economies have not fared well, either. India is experiencing a sharp slowdown in economic activity, which could be exacerbated by a devastating acceleration in Covid-19 cases, fuelled by the easing of lockdown measures. The government has pushed through some agricultural and labour market reforms, but a banking system hobbled by bad loans remains a powerful constraint on growth.
Brazil and Russia have fared little better. Both have experienced substantial economic contractions, and have few policy levers available to revive growth.
The one country experiencing a strong recovery is China, where, thanks largely to the country’s apparent success in bringing the virus under control, both industrial production and services have rebounded. Retail sales and manufacturing sector investment have also bounced back. By many indicators, the country’s economic performance is now even stronger than it was before the pandemic.
Yet, unlike in the wake of the 2008 global financial crisis, China’s strong performance is not likely to do much to buttress the rest of the world economy, not least because of the growing push towards deglobalisation. China’s recently unveiled “dual-circulation strategy” – whereby the country will increasingly depend on the domestic cycle of production, distribution, and consumption for its long-term development – will reinforce this trend.
Making matters worse, central banks now have far less firepower than they did after the 2008 crisis. To be sure, the major central banks have pulled out all the policy stops since the Covid-19 crisis began, pursuing unprecedented monetary expansion in order to support economic activity and, in some cases, to fend off deflation. Some – most notably, the US Federal Reserve – have even adjusted their policy frameworks to signal tolerance of higher inflation. The central banks of some smaller advanced economies, such as Australia and New Zealand, and emerging economies, such as India, have also resorted to unconventional measures.
But the limits of monetary policy for boosting growth are becoming increasingly apparent. Meanwhile, large-scale purchases of corporate and government bonds, together with the direct financing of firms, are generating serious risks – not least to central-bank independence.
Against this background, governments have only one good option: further aggressive fiscal stimulus, ideally in the form of well-targeted government expenditure that could spur private investment. Whatever risks the increase in public debt may generate, they do not compare – especially in today’s low-interest-rate environment – to the long-term economic pain that countries will face without such stimulus.
To be effective, however, fiscal measures must be complemented by coherent virus containment strategies, which credibly enable safe economic reopening. Without such strategies, demand and confidence will remain subdued, and global growth will continue to falter well into the future.
Eswar Prasad is a professor of trade policy at Cornell University’s Dyson School of Applied Economics and Management and a senior fellow at the Brookings Institution. Darren Chang and Ethan Wu, undergraduate students at Cornell, assisted in the writing of this commentary.
Copyright: Project Syndicate
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