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DealBook: Let’s Talk About Bailouts … | Press "Enter" to skip to content

DealBook: Let’s Talk About Bailouts …

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“Our founders have always believed in scale,” Scott Sandell, its managing general partner, told Michael in an interview. That drove the firm to raise what’s now Silicon Valley’s second-biggest venture fund, after Sequoia’s colossal $8 billion fund, going from start to close in about 12 months.

The fund will be focused on N.E.A.’s traditional areas of interest, including start-ups in the health care technology, fintech and enterprise sectors. It plans to invest largely in early-stage businesses, where it tends to get its biggest returns, though Tony Florence, a general partner, added that it had the firepower to “double down” on promising older portfolio companies that need capital to grow. Neither partner professed worry about finding enough potential investments, a problem that has hamstrung Sequoia.

The firm isn’t too worried about the coronavirus … but is telling start-ups to look after employees and make sure the companies have enough cash to ride out a tough fund-raising environment. “When you don’t know where your money is coming from, you’d better be careful with the money you have,” Mr. Sandell said.

It had already been telling its start-ups to be more parsimonious, avoiding the sort of free-spending that led to WeWork’s meteoric rise and fall. Or, as Mr. Sandell put it, avoid taking $300 million from SoftBank’s Vision Fund, increase market share by a few percentage points and “become profitable when your grandkids grow up.”

Last year, Occidental was riding high after striking a deal to buy the fellow oil producer Anadarko for $38 billion, beating out Chevron and fending off Carl Icahn. This year, that all came crashing down.

Oxy will slash its dividend 86 percent, to 11 cents. (It’s one of the biggest such cuts in years.) The company also plans to cut capital expenditures this year to as little as $3.5 billion, down from a maximum planned spend of $5.4 billion.


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