How to Drive Your Business Forward: The Power and Opportunity of Leveraging Corporate Venture Capital
7:56PM Jul 8, +0000
Speakers:
Connie Loizos
Keywords:
companies
startups
work
investments
city
invest
banks
people
investing
corporate
partner
financial services
question
investors
ventures
founders
connie
wondering
leading
citi
Hello, everyone. Thank you for joining us this morning, Arvin. So great to see you. Thank you for making time for this. We really appreciate it.
Thank you for having me and good to see you as well funny.
So some of you will know and others are meeting Arvind today, but he is a longtime VC who actually started his career at Intel as a circuit designer, which is interesting. before spending nearly a decade with Menlo ventures, then Arvin in 2011, you helped found corporates, I'm sorry, city's corporate venture group. And Arvin remains the Global Head of venture investing and sets the group's overall strategy. You've partnered with all kinds of companies since creating this unit, square DocuSign honey Plaid betterment jet comm data robot tanium digit good work Arvin, I guess maybe you can start by telling us a little bit about how the operation works. And of course, how you persuaded these companies to work with you.
Yeah, absolutely. Pleasure to be here. And thanks to TC for, for having me, welcome to all the attendees. As you, as you mentioned, Connie, I think, have been doing this for about 10 years. And what's been very interesting to see is the change in attitudes about taking capital from corporates, from from the startup standpoint, but also the traditional VC investor standpoint. But also more importantly, how startup corporates have changed their view and change their mindset about working with startups. I think, in the in the decade that I've been doing it the doing, the corporate venture capital ecosystem has mature tremendously. And by in general, not I'm just not talking about city, but I'm talking about corporates in general are much more open to partnering with startups, they're, you know, if more flexible in how they they operate with startups, you know, there's a certain way in which big companies operate and a certain way in which startups operate the speed, there is a big speed mismatch. And, and we sort of jokingly think about it as sort of this impedance mismatch, which we which we bridge right, which we, you know, bridge that gap. And so, I think all of those, you know, all of those things have have substantially improved over the decade that I've been, I've been doing this. I mean, I think this session is about how, you know, founders, and especially especially early stage companies move their business forward. And I think, you know, we're making the case here that, that having a corporate VC around the table, is actually a really good idea. You know, it's the, the corporate VCs bring a different set of skills, a different value proposition to the the startup cap table to the board to the, you know, the set of people that are working with a startup and, and I think it could be very helpful to actually have a corporate as a part of your syndicate.
Can I can I interrupt you real quickly? You know, I am wondering, in this market, you mentioned speed. I mean, I've never seen things move this fast in my career. I'm just wondering, how have you had to kind of I mean, how have you, how have you adapted and I guess how city reacted to you're asked to write checks a lot faster, perhaps you have in the past?
It's a great question. Connie, when I first came to city ventures, one of the first things that I worked on is really what does the process look like? Right, and I had to work with sort of internal risk teams, compliance teams, etc, since we're a regulated entity, you know, a big financial institution. And so, having been in the venture world, for a decade, before I came to city, I was able to design a process, and we were able to design a process really, that that met the needs of the program. First of all, we had very supportive senior management within city and supportive control functions, you know, people within risk people within compliance that are very supportive individuals. So we were able to design something that had sort of a fairly predictable timeframes to it could work reasonably fast. And, you know, if I think about the investments we have made over the last 10 years, in a lot of those cases, we have, we have closed those investments along with sort of the main investors and the financial investors. We have not had to wait for a second close or we've not had to request the company to do a second close. We've been able to close along with the rest of the the syndicate. Occasionally we'll have to ask for additional time. But I think it comes down to designing this process that actually takes into account how fast these things move and how you know, startups and VCs operate and then matching that to whatever needs to happen. From a process standpoint, internally. To give you an example, this year, has been our busiest year yet, you know, we've closed 25 investments, and the first half of 14 of them are new investments. 11 of them are follow on, but each one of them we have to follow a process. And, you know, so the team, you know, suffice to say, has been extremely busy. But it's worked, because we've set up that process, and we've had very supportive control functions.
That's, that's great. I mean, that's a lot 14 new investments, and then some are still in June. Do you lead investments? You know, you mentioned being able to write checks at the same time as as your co leads? do you have? You know, I don't doubt your judgment, but I just wonder, as a corporation, do they want to see, you know, somebody else sort of saying, you know, giving a deal. Its blessing.
Yeah. No, sort of make the general comment and also make the specific comment about city ventures. Connie. I think one of the things I've seen happen in the last decade and corporate ventures, many corporates stepping up and being leads, right. So they've said we are, many of them have said, We are no different from financial VCs, we want to lead rounds, we want to take board seats and be very involved with, with the development of a company and and that's phenomenal to see, our particular approach has been very flexible. So we have the ability to lead rounds, we have the ability to take board seats, but we care about working with great syndicate partners. And we truly believe that, you know, each syndicate partner around the table brings a unique value proposition that can all be very additive, and it works well. Right. So early stage investors are extremely good at sort of company buildings, strategic advice, team building, you know, and those kinds of things, opening doors, and then corporates bring a different value proposition which I think we should, you know, talk a little bit more about, but I view the roles as being quite complimentary. And so in that sense, while we have led a few deals in our, in our history, in most of our deals, we've been participants in syndicates led by others, and we still work very closely with all of our company's
got it. Thank you. Yes, please tell me a little bit more about what you offer, so that the founders watching have a better idea.
Yeah, absolutely, you know, maybe sort of just to level set people, I'll give sort of a quick intro to city ventures, how we think about the world and the kinds of investments we make, we we sort of our mandate is to invest in companies that are disruptive and strategic to city and, you know, and to financial services in general. And so we we look for category, category, leading startups and then invest in them and drive partnerships with them. There, when we talk about sectors that are two broad categories of companies that we think about, one is in FinTech. And so within FinTech, if you can imagine this, you know, fairly broad. For us, we think about sort of next generation financial services. We think about, you know, companies and commerce and payments, city is, as you know, has large credit card business, we have other, you know, institutional payment trails, we run loyalty, large loyalty programs, so any anything in those categories in anything in those spaces, is fair game. And then we also started to make investments in what we call prospect for the industry generally calls property, which is in and around real estate mortgages, and, and so on. Just because it's such a large part of the economy, it's such a large part of people's lives. The other category of companies that we invest in are enterprise companies. So within enterprise, we have chosen some areas where there are massive shifts happening in the outside ecosystem that we feel city should be learning from and adopting when appropriate. So for example, it's hard to overstate the importance of cybersecurity. And in cybersecurity, in many of the more advanced technologies, and people who are sort of looking around the corners are betting of the startup entrepreneurs. And so we have a very active program that we've got, you know, have had going literally for the whole time that I've been here 10 years plus investing in cybersecurity companies. Second is the massive shifts that have happened in the last decade in data and analytics with machine learning. So, here, we have partnered with some great companies, including companies like data robot, and others that that, you know, have been have done a great job of sort of bringing machine learning to the masses, but stepping back, you know, cities sits on a mountains of data. So how do we, how do we manage it? In fact, how do we govern it? How do we, you know, then get value out of the data to benefit our customers and clients is something that we think about, quite actively. And then finally, you know, customer experiences and other important aspect of of what we do in the enterprise space. So you know, how people interact with banks, how corporations interact with their banks has changed dramatically over the last several years and You want to be on top of providing great experiences for our customers and clients as well. So these are the areas that we invest in. And given the sort of our content is to partner with these startups and to invest in strategic startups, we tend to be stage agnostic. Sometimes we're investing in some early stage companies all the way to pre IPO rounds, with the view that if it is strategic, we want to invest in we want to partner with these companies. And so, so one of the things that we kicked off on is something that we call commercialization. And we've had that going for 10 years, and we have a team and infrastructure and processes set up to do what we call commercialization. What we mean by commercialization is to make sure that all of the companies that we invest in, have a great shot at partnering with city. And so we maintain a pipeline, we measure ourselves by, you know, how you know how effective we are in that, by seeing how many of these companies actually closed commercial deals with Citi, how many of them, get to pilots and emails, and just, as you can imagine, it takes a long project takes a long while to get through the process of getting selected and get you know, and actually closing a commercial deal with Citi. And, and we've actually been very effective in getting many of our companies to to work with Citi and, and the reason that that's important is, of course, it's very beneficial to the startup if city becomes a customer or a partner. But that that's in fact, one of the ways in which city derives a benefit from this new technology or new capability. And so we believe that that's actually an important aspect of what we do. And we've probably have sort of industry leading track record and being able to drive that. And so that's something that we were very proud of, as well. When we initially started, we first started, you know, just in the United States, and now we're, we invest in Europe, we invest in Israel, we invest in, in Southeast Asia as as well as Latin America. So we've definitely grown geographically. And, and then the last thing I would say is, you know, about introducing ourselves and Citi ventures really is, we do think of ourselves as value added investors. In other words, we keep asking ourselves, how do we add value to portfolio companies over and above, bringing city to the table. And so those that's, you know, a, sort of a value creation platform, if you will, that, that we think about, we have people dedicated to it. And, and, and in that way, you know, we we hope to bring additional value to the companies that we work with.
So the commercialization aspect seems really interesting. I'm wondering, are you making introductions to founders outside of city?
Yep. It's a great question. You know, one of the benefits of working with a large corporate is you can imagine a corporate is at the is the hub of a network of its own. Right. And so if you think about city, you know, we're a large financial and we actually are connected to a very large network, and so is every large enterprise that potentially has its own corporate VC firm. And so the thing that we have done, is tried to make introductions for our startups with clients of ours, you know, the clients of ours, maybe other investor clients, like, you know, a few mutual fund managers or hedge funds or, or people like that. Or it could be corporates that we bank in corporates that we work with, and what we have found over the years, Connie is, really a lot of the corporates are thinking about the same things that we're thinking about their interest rates being the same things that that we've been thinking about. And so we ended up, you know, making introductions for our startups to many of the corporates in our network. Additionally, it's something that we kicked off a couple of years ago, and it's still sort of in an early stage, but but growing is what we think of as a tech Council. So we said, you know, we already have connectivity within city, we work with cities, senior leadership on the the tech and ops side, but how do we broaden that network to other people to, you know, understand sort of industry trends in a more, you know, in a broader fashion, and be able to drive those introductions for enterprise companies that we that we work with, and we've been able to do that as well and, and make introductions over and above sort of the city angle.
And then Irvin, for the founders watching, can you just walk us a little bit through the mechanics of your group? So for one, for example, I'm wondering if you raise discrete pools of capital every year. And by the way, if you could sort of give us a sense of how much you're managing at any one time?
Yeah, no, we invest from from city's balance sheet. And we don't graze discrete pools of capital. And so the process for us is, I mean, we've had sort of investments, you know, through the 10 years, almost continuously, right? Every quarter, we've probably closed investments, our processes, you know, very similar to the with the the the process systemic experience at another venture firm we, you know, one of the the investors on my team starts to work with the startup understand the business, we have an internal equivalent of a partner stating, we have a team meeting that we meet every Monday, we bounce ideas off of each other, we ask questions on, how about this? How about that when it comes to individual investments, we request the startup founder to come and present to the whole team before we make a decision on whether to move forward or not. So we are very conscious about the the demands on founders and entrepreneurs times. So we are very sensitive to you know, how much time we ask off them through this process. And in many cases, you know, given given that we've been doing this for a while, we're very comfortable doing some independent due diligence or sharing due diligence with other investors around the around the syndicate as well.
You know, I also wonder, since around that you're investing off the balance sheet, and I'm assuming the liquidity events that you have the money goes back onto the company's balance sheet. How are your partners compensated? Because I think founders want to sort of know that there's the people that they're partnering with have sort of, you know, skin in the game, so to speak.
Yeah. So I think the, the way we think about that, and we sort of work with as the rest of city does, right, so we actually don't have a dedicated fund with a carrot infrastructure or anything like that. I think we do get, you know, the the bonuses that our team guess is based on the performance, and that performance is a combination of not just how the portfolio does financially, but also how we do from a strategic standpoint, are we delivering the strategic impact, so it's a mix of those things that determines compensation. But, you know, over and above that, Connie, the way we think about it is to deliver the strategic impact that we're looking for, we need to find those industry leading startups. Right. And, and those industries, leading startups are the same ones that, you know, deliver the good financial returns, in other words, you know, investing in sort of market leading startups, and delivering strategic impact, those two things are extremely aligned, as far as we're concerned. And so you can think about some of the companies in our portfolio, whether it's, you know, whether it's a Plaid or a square, or DocuSign, or companies like that, and they've created different categories, and they turned out to be very successful investments. For us, of course, Plaid is still a private company, but they also ended up being very strategic to financial services and the city, itself. And so I was, so we think about the strategic aspect of the financial aspect of what we do to be extremely aligned.
Right, right. Great. Um, you know, I also wonder, when you're investing with a syndicate, do you care if you know, Wells Fargo or Bank of America? Are there other financial services groups, they're also investing in a company?
It's a great question. And, and sometimes startup entrepreneurs asked us this question. You know, we have been, we have been very open to working with the other banks. And in fact, we have some great examples where we are co investors in many of these companies, with other banks. Even going back before the FinTech, you know, era, if you will, many of the banks participated in consortia, right, they set up utilities, they set up infrastructure to trade with each other, and so on, and so forth. So, it's not as if banks don't cooperate with each other, so that it benefits the whole industry. And so we certainly bring that attitude of, of being collaborative, and we're co investors with, you know, with with other banks in many of our companies. And I think the entrepreneurs, you know, sometimes over interpret that and say, Hey, if you're sitting here, Wells Fargo can't be involved, and vice versa. And most often, that is not, you know, if that is not true, is it possible that it becomes true, sometimes? It's possible, but but it's very rare.
You know, another thing that I think founders think it's probably very top of mind when talking with a corporate is, if I sell if I partner with Citi, does this mean, I can never sell my product to Wells Fargo? You know, I guess, how should they be thinking about this relationship? I mean, you're a strategic investor. You know, they worry about, you know, whether you limit their opportunities down.
This is actually a question that used to come up very often in the earlier days, right. So when we first started and we were trying to convince, you know, startup startups to work with us, they would ask this exact question and the way we handled it Then and Now of course, we have some great examples where we have done it in the time that we've been doing this. We haven't done it Esther's in 110 companies. And we have an active portfolio of 75 companies maybe more at this point. And so we have a lot of, you know, history and track record of how we have worked with startup companies. But the simple way in which we operate there, Connie is when we are starting to a startup we're talking about, we're talking as venture investors, right. So we care a lot about the confidential nature of some of the information they they share with us, we act in their best interests, we act in the you know, we make sure that, you know, there's no information leakage, so that so and so a company is about to do something with JP Morgan, or something like that, you know, we don't, sort of, we were very careful with that type of information. And so we have to build startups trust and confidence in that way. And that's the way we have operated is to make sure that we don't use the information we get from startups in any kind of untoward way that would hurt the startups prospects. Now, there are so sometimes, you know, it's well known, I mean, there's certain times, you know, XYZ startup is working with all these different banks, and many times, it's publicly available information, and then it's okay, but we do sort of draw lines on what we keep in, you know, within our group within the venture team within the team that monitors these portfolio companies and works with these portfolio companies versus what we share with a business. And of course, we're always, you know, with our business, we're sharing our perspective, we're sharing trends, we're sharing sort of, you know, General commentary about these companies, the health of their companies, how they're doing, and so on and so forth. But, but never something that, you know, is confidential that would, you know, hurt the company's prospects. And so that's the way we've tried to do to operate right now. Sorry, just to complete the thought, you know, in our history, we have worked with so many companies, many financial services, companies, enterprise companies, where we have been investors, and we have maybe become customers or partners, but they also work with a number of the other large banks out there.
Susan Su, basically answered my follow up question, which was just about founders worrying, right, that you're going to take that information and insights that you learn from your meetings with them and use them to benefit your selves so that investing in the company, which you're seeing clearly does not happen, you know, I am curious, you said you invest across stages, what is your biggest investment right now? That's not, you know, where you haven't exited? And I guess how big a check was that?
Would you mind repeating the question, Connie?
I'm sorry. So probably too fast. You were saying that you are stage agnostic. And I'm just wondering, which startup has received the most funding from your group.
One of the bigger investments for us, and I won't go into the numbers, but one of the bigger investments for us is graph, which is sort of a mobility company in Southeast Asia. It's an interesting investment, because even two or three years ago, you know, when we made that investment, people were asking us what's the, you know, they're a ride sharing company, and what's the what's the angle? So there were two or three important things that we were thinking about in that investment. One is that in Asia, there's this tendency for these apps to become super apps. And one of the things that they add to it, you know, his financial services. And so we were thinking about sort of that that trend that we've seen in other companies out there about, you know, super apps and sort of the additional financial services. And second is sort of the inside out perspective that we had, which is, here are large platforms, like grab that have millions of customers, you know, in on their network, they are becoming super apps, people rely on them, you know, day in and day out, and in many cases, so how do we provide financial services and financial products to those folks, you know, in a b2b to see kind of a fashion and so so we decided to invest in grab and and we actually have a great partnership with them, we have, I think, at least two products that we have jointly launched with the graph team. And there may be more in the future. And so that's an example where we kind of stretched ourselves to write a sort of a larger track for us at that point in time, and also partner with a fairly late stage company. And as I said, that's actually among the later stage, amongst the latest of the stages we have invested in and then we do some things that are much earlier stage as well.
That's really interesting. A big surprise. You know, another thing that I'm wondering about is you talked about FinTech obviously, being a major area of interest. And I think you mentioned maybe embedded finance. I'm wondering how you think about, you know, city obviously wants to sell banking services as a sort of subscription product. How do you think about, I guess, partnering with a startup versus, you know, I guess backing up potential competitor to see So, if that makes any sense?
Yeah, it does. I mean, so let me talk about sort of both of those aspects of it. Right. So one is, how do we think about a company that's playing in a space that's potentially competitive to city? And then there's also ask the question about embedded finance, which I think is worth, you know, clicking on. On the embedded finance world, one of the things that we are noticing right now is how financial service systems get getting embedded into every industry, right, and it's sort of the big, just becoming the layer. That is it, you know, that is, that is an ever, you know, needed and required in every transaction, it makes the transaction go smoother and just users improves, the user experience reduces friction. And so in that way, you know, there's been sort of all the bnpl companies, which are the buy now pay later type companies that have come up. And, and so we've been thinking about that fairly extensively. And so, you know, one of the areas that city has a strong business in is in trade, finance and global trade. So if you think about large corporations ordering materials, I mean, they go through the process of ordering materials, which still tends to be fairly, fairly kind of antiquated and legacy processes. And those processes are getting digitized. So now, once those processes get digitized, there's an opportunity for, for city and other large banks to participate in that marketplace, or in that, you know, in that ecosystem, by enabling payments, and by enabling trade finance and other sort of credit solutions, right. So, so in that, in that vein, we, you know, recently invested in a company called Porto, which is sort of a freight forwarder, a freight forwarder company based in based in Europe. And we recently made an investment there. And that's sort of the thesis behind there is like, how do you embed financial services wherever corporations or customers are doing business, and that that way, you make that experience extremely easy. And we see this as a major trend. And so we've been taking a fairly, like I said, an expansive view of it. But that leads to the question that you're asking also. Right, which is, how do we think about potentially competing investments? I mean, by, by definition, many of the investments that that we make in and around financial services have the potential to be competitive to us? I think it's a it's not an easy answer, we we need to take a look at the company. And it's a case by case basis. You know, I would say that some of the strategic benefit we get by investing in these companies is some of the learnings. And and so while we are going through the process of figuring out, Hey, is this a competitive company? Should we be investing in them? Should we be? Is there a way to even partner with them? I'm sure the, the entrepreneur, so the startup is also thinking the same thing, you know, what, how do I benefit from from working with city and what we find is, startups sometimes determine that it's, you know, not in their interest, they want to stay independent, they want to stay independent of all the big banks, they don't necessarily want to advertise any, you know, strategic linkage in that way. And there are others that want to partner with us. And, and, you know, our senior management has been extremely supportive of sort of making some of those investments where, you know, maybe we have a similar business or, or we're in the same business. The startup typically is earlier stage, you know, smaller growing, but it's indicative of a trend that's important to us. And so in those cases, we are open to investing and we have
as So, I just wanted to let people watching know, to go ahead and please submit your questions versus in XTC and hop in if you haven't already. We do have a couple of questions are coming in. So I wanted to run these past you, Diana, just run I just finished reading startup by Jerry Kaplan, in which goes corporate investors effectively killed the company, what protections should startups look for in making deals with corporations?
It's a great question, I'd say talk about two things, right? Derek Kaplan's book is from about 30 years ago, or 25 plus years ago. And so the first point, I do see the the, you know, environment and how corporate VCs operate, has changed dramatically. I think. You know, I think the corporations are much more open and they sort of understand the role they play and and the role VCs play and the, you know, the institutional basis play as well as the role startups play in the ecosystem. The thing that I would sort of, if I were advising a friend who's starting an early stage company, and he or she is thinking about taking capital from a corporate VC, you know, think about the terms think about the stage of the company and the fit the term and and think about what you're trying to get out of it so far. You mentioned three things, one As in the terms there are, you know, it used to be that corporate investors asked for a right of first refusal or a right or at least the right a first notification on any kind of m&a transaction. Right. And that's something that we have not asked about. And I think most of the corporate VCs that I know, don't ask about, because that actually limits the opportunity for the startup to grow, it introduces a signal in there, that is not helpful at all, as the company grows. And so, you know, one of the things we have done is, we have, you know, strive to be very, very close to the way any institutional VC operates, so that it becomes easy for the startup to work with city ventures. And, and and I would, you know, sort of encourage, you know, early stage founders say, oh, maybe the corporation's needs certain special things, but what is it that they're asking for, and just be very careful about what you signed up for? That's number one. Number two, kind of beware of the bear hug, right? You know, the large company wants you to develop, wants you to develop a product that suits their needs, then you should do it as long as it is aligned with sort of your own strategy and where you want to take the company. Right. So, you know, otherwise, you know, I've had the situation in my own career maybe 15 years ago, where a company has seven customers in seven different seven different code bases, right. So that built a product to you know, per, per customer. And if that's not scalable, I think you want a scalable situation so that, as far as possible, you're building a product. That's, that's common to everyone. That's the second one. And then the third one is just having the right expectations, going into the partnership, and being open, open and openly discussing it, like go in with eyes wide open and talk about Okay, what is it that I can expect? You know, is there going to be a commercial partnership? If so, how long will it take? How difficult is it going to be? How can you help? You know, what, you know, how do you align incentives, you know, with sort of the start of the tour, investigate, have an open discussion with sort of the people that you're working with, at the end of the day, you know, like in any investor entrepreneur relationship, there needs to be trust. And that's the only way this can succeed.
That's great. And it's really great to communicate to you viewers that there's no right of first refusal, but you're you're asking for, um, so we have another question from Steven, how are you thinking about digital banks focused on specific verticals? Is this something that city has invested in before?
So we do broadly speaking, yes. And so what I mean by that is that our vertical focused sort of lending companies that we have, we have invested in so for example, were investors in a company called octane lending, which is a point of sale lender for adventure sports, right? Turns turns out that, you know, that's one of the outdoor activities, were one of the few things you could do, you know, during the pandemic, and the company, you know, saw the sort of benefit of being in that. And so it's a lender, it's not sort of a digital bank, per se, and but we have invested there, I must say, we are also, you know, involved with another effort within Citi ventures, which is, you know, we are partnered with another team within city, and we have launched the city impact fund about, you know, 18 months ago, and there we have done some, some other digital banking, you know, investments that are targeted at certain populations. So, for example, we became investors in a company in a company called Greenwood that's targeted at Black and Latin x communities. And so we have made some of those investments, I guess, is the short answer.
Maryland's wondering how we can pitch your firm if we don't know anyone who can do a warm introduction for us?
It's a great question. You know, LinkedIn is a good way to reach out to us, you know, we try to be responsive, there we are, for a while, we used to sort of have a, an email address, which tends to be very hard, because just because of the volume of stuff that we all see. So coming through LinkedIn is is a good way. But also, you know, one of the things that I sort of advise people is, and people do this, I mean, entrepreneurs that we work with, do this, I mean, talk to references, talk to people that you know, or you may know, that has worked with us, because you also want to make sure that it's a good relationship that you're getting into, just as we do diligence on the company, etc, etc. And so I think it's still trying to get a contact, you know, and using LinkedIn and in a good way is probably the best way to DICOM people do send us cold emails, and sometimes it gets stopped by the spam. So And sometimes we end up seeing it and being responsive to it.
Right. But that's good advice. I mean, be resourceful. And finding a connection that can, you know, you can learn from and also can get you to the right people at City Art. And finally, I wanted to ask, you know, there's so much happening in FinTech, obviously. I'm wondering how you compete with some of these sort of like, fuzzier brands, these new brands like stripe, which is, you know, actively investing in startups? How do you differentiate what you're offering? If you're going up against their team? And you really want to deal?
with it? Oh, it's it's a good question. It sort of goes back to what we were talking about before, which is just just as we go invest in Parker with sort of other big banks, we, you know, we'll we'll call invest with with stripe or any of the other younger companies that are also getting into the the corporate, venture, corporate venture area. And we have done that, in the past where we have partnered with sort of younger companies that have that have invested along with us and these startups. I don't, I, you know, I think when you park when, when we're co investing with a JP Morgan Chase, or when we are going investing with Wells Fargo, their business is so broad, I don't think it introduces any new competitive dynamics there. It's just a matter of, you know, what, what a stripe or somebody like that brings to the table versus what a city brings Stable, still quite different, though. Right. And, and, you know, our network and their network, their strengths, and our strengths are quite complimentary. Again, you know, if a startup is choosing to work with, with both stripe, and Citi, I think they're seeing the benefit of, you know, having both companies around the table and partnering with both, and that's certainly the way, you know, we approach things.
And also, I'm just wondering, as a longtime VC, you know, we You and I were talking about the fact that things have never moved faster? How price sensitive or not is today? I mean, what do you think of some evaluations we're seeing? And, and, you know, I mean, are you alarmed by how quickly companies are raising funding right now, what does that say to you?
No, I think, sort of what a night and day difference between sort of 18 months ago to now, right, 18 months ago, we were looking at sort of, you know, march of 2020, April of 2020. And we're thinking about what what that means that I was sort of harkening back to the financial global financial crisis back in 2008 2009 timeframe, and the impact that it had, and, and we were trying to draw lessons from that, that world, that timeframe, to inform, you know, sort of our strategy, you know, back in the April 2020 timeframe, but of course, there was a big bounce back for for all the reasons people people know about.
And and I think the sorry, repeat your question, if you don't mind. No, no, I'm
just wondering, I mean, I guess, you know, I mean, somebody who's been in this industry for a while it can feel the cycle is gonna end it. So capitalism. Right, and companies are raising. I'm just wondering, I don't know what to make of it. I wonder what you think.
Right. And so that what I was just connecting the dots, I mean, it's been a night and day difference, and there's just a huge amount of capitalism available. And so there is no two ways about it. The valuations are healthy, and, and, and sometimes the valuations have grown rapidly, because startups have raised funds, you know, 234 months between, you know, between rounds. And so we certainly see that happening. What do you notice this? First question? You know, that's one of the questions you asked, Connie is how do we think about valuation? And so I would say, we, we do care about valuation, we, you know, on a sort of, we have our own risk versus return profile, right. So we, for a later stage company, what's sort of the level of multiple you're looking for an investment versus for an early stage company? And how do we think about that? So we definitely think about the valuation and we have, you know, certainly passed on some companies, because the valuation has been too high. So there is a lot of capital out there. The, you know, compared to previous times, I do feel like there are so many solid companies, you know, great companies, good business models growing rapidly, and they're able to use the capital, you know, you know, you know, efficient way. I think the last thing you want to do is to raise capital and misuse it and I think that that could be, you know, sort of the make or break the company really on how you use that capital. So far, I feel good about the portfolio. You know, the view I Get from the portfolio, right? And how they're able to raise the capital, and then invest that capital in the right way. For example, you know, if you're an enterprise company, and if you've not hit your product market fit, don't build out your Salesforce, right? I mean, so those kinds of lessons have been learned. And I think I see entrepreneurs, taking that to heart and investing the cash cash in the right way. But they're also making, you know, judgments based on sort of their situation when capital is available, they need to raise it, and I would advise anybody to do that as well.
Great. Well, I think we're out of time. Thank you so much for joining us. Again, really a treat to see you and hopefully we'll stay in touch and see each other again soon.
Thanks for your questions. Great to be on the on the session. Yeah. Thanks, everyone.