Dave Flanagan, vice-president and senior managing director of Intel Capital, the venturing unit of semiconductor manufacturer Intel, interviewed Scott Sandell, managing general partner of VC firm New Enterprise Associates (NEA).
Sandell painted developments over the past decade in broad strokes: “The industry has grown enormously and matured, so there are more resources and infrastructures. The S&P500 has grown three times and the Nasdaq four times. We have seen a tremendous rise of tech along with a shift in private markets which we are all supporting.”
Sandell seconded Kupor’s earlier point and forecast “new forms of liquidity” that were expected to take place in the private markets. When asked about a potential downturn and its impact on the VC realm, he acknowledged humbly: “I am no smarter than anyone in this room about predicting it. Valuations in both private and public markets are high so that is somewhat worrisome. However, a macro shock that is unpredictable would cause me concern.”
Sandell also said that he concurred with Sue Siegel’s appraisal, during her acceptance speech for the GCV Lifetime Achievement Award, that capital in corporate venturing “is here to stay”.
He explained that the he had had positive recent experience partnering payment company Visa and said that “bad experiences” with corporates were now a distant memory. Asked if he saw corporate venturers as competition, Sandell explained he considered it a positive development, taking into account the viewpoint of entrepreneurs: “Capital is needed, as those companies need a lot of capital to get to the finish line, so capital from any source is welcomed.”
On the sustainability of the business models of venture firms, Sandell stressed the importance of appropriate compensation and incentive structures in place: “The key thing is to figure out how to compensate the team well and fairly.” On the whole, he expressed a generally optimistic view on the future of VC and proclaimed that “if you have alignment of interest and individuals who consciously work, good things can happen.”
Sandell also touched upon the issues of diversity and inclusion in the venture industry by noting an increased awareness: “The good news is: everyone thinks it is an important issue and I do not know if that was true five or 10 years ago.” In terms of how NEA addresses these problems, he commented: “Our website now looks like we are the United Nations but that does not mean we are where we want to be,” highlighting the search for diversity in the firm’s interviewing process.
He added: “Inclusion is also challenging because of unconscious biases. Diversity is the best answer to [the problems around] inclusion. When you have diversity, inclusion happens naturally. We have seen this in our organisation.”