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In March, I published analysis of the fundraising market in 2008. It showed that the later rounds, the series B and series C were the most impacted. The early data from March 2020 shows a different pattern. Seed and Series A rounds are first to bear the compression in the market. Later rounds are unblemished.

Round volumes in seed have been declining since summer 2018. The same is true for Series A and Series B. Meanwhile, Series Cs are flat to up.

Much has changed in the world since we announced our last early stage fund in 2018, especially in the last several months, as so much of our day-to-day lives have been reshaped by the coronavirus pandemic. We believe it’s more important than ever to back visionary founders, like the many we’ve had the privilege of working with as a firm so far.

We’re both excited and grateful to have the opportunity to continue to partner with early stage entrepreneurs. To that end, we wanted to share that we’ve raised a new $500M early stage fund.

How do you benchmark a sales organization in a time like this? This is one of the questions that Jim Benton, CEO of Chorus.ai, answers every day in his Daily Briefings. Using data across 10m telephone calls, Jim highlights how the coronavirus is changing sales team performance. Here are some of the highlights from my reading.

Cold calls are down 67%, while connect rates have fallen by about 10% since January. Discovery calls are down 24%. It’s curious that volumes have fallen, given the connect rates have seen such a modest decline.

A few weeks ago, I wrote What I Expect in the Next Few Months in Startupland, in which I mentioned two fundamental forces: Bullwhip Effect and Startup Growth Rates. We are seeing the impact on both in full force today.

A quick refresher on the Bullwhip Effect: “The idea is that small changes in retail demand amplify into big swings up the supply chain.” A few readers asked for examples. Today, it’s hard to dodge them. A barrel of oil cost -$7 last week. Electricity in France was better than free, hitting -€20 per megawatt hour. And coincidentally, beer brewers are suffering the effects of overproduction. These are examples of adverse demand shocks: demand disappearing for energy and liquid courage overnight.

If I start a salacious tweetstorm that our local bank is running out of money, that rumor will circulate quickly. Eventually, the rumor will trigger a bank run. By tomorrow, the bank will face insolvency, even though it was business as usual at the bank this morning.

This is the idea behind Narrative Economics. Robert Shiller wrote Narrative Economics, in which he explores how stories impact the economy. In particular, narratives stoked three depressions and recessions in the US in 1920, 1929, and 2008. Shiller, a respected and lauded professor at Yale, models the spread of narratives in these periods using epidemiology.

Among the most useful frameworks I’ve found to manage a company in this era is the 2×2 matrix above. This matrix answers the question: what should the company’s stance be. It also raises the question: when should it change?

One could argue times like these all good opportunities to adopt a defensive posture: focus on product, limit GTM hiring, and modulate burn. A million saved is a million raised.

On the other hand, one could argue, now is a great time to press competitive advantage, win share, and emerge from this epoch stronger for it. Fortune favors the bold.

Sam Jacobs created the Revenue Collective, a group of more than 1700 sales professionals at some of the fastest-growing companies. With chapters across the US, Revenue Collective has broad reach within the sales community. I’ve known Sam a long time and he’s done remarkable work with this community. Recently, Revenue Collective surveyed its members about the impact of coronavirus on businesses.

The data is insightful both as a tool for benchmarking your own company and also to understand the mentality of sales leaders in this challenging time. You can download the survey here.

Over the last decade, growth has been the winning card for startups to play. The faster the business grew, the higher its valuation. Margins didn’t matter much. Neither gross margin, nor net income margin weighed heavily on a company’s valuation unless they deviated grossly from norms. Today, runway ranks as the first consideration in evaluating a company’s strategy. Suddenly, margins matter.

Richer margins lengthen runway. Let’s illustrate the point with a hypothetical startup at $1M in monthly revenue. Assume the company grows 5% per month. The company generates a gross profit of 60%. The gross profit is the revenue minus the COGs (cost of goods sold).

When will a start up’s management team feel comfortable telling employees there safe to return to work? Is it when the government declares it safe? Or schools re-open? Or customer prospects agree to meet in person? Or when we each record a positive antibody test?

How will we conduct meetings? With masks and gloves? What will be the social norms to say hello? Handshakes, hugs, high-fives, waves, hand over your heart, a bow? Will it be impolite to shake hands and immediately use alcohol to disinfect your hands? Will it be impolite to ask if someone has been tested for coronavirus? Will we carry immunity passports?

Which startup sectors are most affected by coronavirus? Roger Lee is maintaining Layoffs.fyi, which is a table of all the startups who have unfortunately cut staff. On the brighter side, it is a resource for startups looking to hire as they grow.

Over the weekend, I analyzed Roger’s data to answer this question. First, let’s look at layoffs by day.

Before March 23, there wasn’t a meaningful volume. But starting that week, startups began reducing headcount by about 700 per day. On March 23, many states and countries started implementing lockdowns. Friday spike to more than 1800. The following week saw similar patterns with the most volume on Thursday and Friday. However, there doesn’t yet seem to be a daily or weekly increase in the data.