1Mby1M Virtual Accelerator Investor Forum: With Jon Staenberg, Managing Partner at Staenberg Venture Partners 2021 (Part 1)

Jon Staenberg, Managing Partner at Staenberg Venture Partners, discusses the trends he is seeing and the investment thesis he is following.

Sramana Mitra:  How have you been? How has COVID been? Has everything been okay?

Jon Staenberg: I was just talking about that this morning. I feel very lucky. I traveled a lot during COVID. I got a lot of business done. I have to say that I feel very fortunate. Now, it seems like airports are busy. People are traveling and they are eager to get out. In fact, I hold investor and founder dinners in San Francisco and Seattle. I get a lot of unsolicited reminders that we should get going with those. 

Sramana Mitra:  You said that you have been traveling during COVID for the last year and a half?

Jon Staenberg: I have. I live in both Seattle and San Francisco, so it was natural for me to go back and forth. I actually got back from Puerto Rico. I was interested in seeing that interesting move by a lot of people who are moving there, especially people who have a lot of capital gains. I have several upcoming trips as well. 

Sramana Mitra: Interesting. Talk about business. What are the changes? What has been the evolution of your business, portfolio, and deal flow through this COVID period?

Jon Staenberg: Some people like to say that COVID accelerated what was naturally happening. It was widespread. I remember my doctor friends saying that at the beginning, they had accomplished more changes in 10 weeks than they had the previous 10 years. It’s true across all industries. When we are forced to change our lifestyles and our engagement patterns, many people say that this was not so bad.

I have been astonished at the winners that won so big during COVID, the tech stocks in particular. People are also rethinking work patterns, life patterns, and social patterns. I don’t know a person who said that they weren’t busier during COVID except for those who sought to be slower and take time off. The deal flow and the number of deals getting done and startup numbers are off the charts.

Sramana Mitra: Are there some salient points of how your portfolio has gained through COVID. Double-click down on some use cases of specific companies, their business, and what you have been seeing.

Jon Staenberg: More than three-quarters of the businesses benefited during this time as their businesses ramped up. On a personal note, you know that I am in the wine business. It is an interesting example. My Hand of God brand actually got quite hurt because we were doing 75 dinners a year in 60 restaurants. Those went to zero.

I am also an advisor to a startup online wine business called Underground Cellar. Their business went 8x. They were focused and they didn’t have a need to be in the restaurants. They are all online. We were just amazed to watch the numbers go up and up. The Hand of God, although not high-tech, is considered a startup. It is undergoing some interesting changes. It is forcing everyone to relook at his or her business.

There is also the introduction of new products. That did not slow down. I just helped an adaptogenic mushroom coffee startup that was able to take over a café that had been closed during COVID. They are going to reengineer this café to be a showcase for their product launch. Those are real-world smaller examples.

Another company that I am excited about is a company that is taking analog assets and converting them into digital. This is in the outdoor active sports. Think of runners, bikers, climbers, and skiers. There are lots of interesting assets out there, magazines for example. All these assets now need to be digitized and brought up to the current world around.

This company is doing that. COVID has accelerated its opportunities. Not to be a cliché, but people talk about the haves and have nots. In the startup world, it became an accelerant. If COVID worked to your benefit then it really worked to your benefit. If it didn’t, you either had to go out of business or pivot.