Oracle for Startups Vice President Jason Williamson joined Yahoo Finance Live to break down what the future holds for venture capital after the pandemic.
SEANA SMITH: The startup and VC space has been largely affected by the COVID pandemic. Here with a closer look at this and some of the trends as we head into the new year, we want to bring in Jason Williamson. He's a Vice President of Oracle for Startups and Oracle for Research. Jason, great to have you on the program.
It's no surprise 2020 has been an extremely challenging year. Let's just start big picture, and I guess how has the pandemic impacted startups so far this year?
JASON WILLIAMSON: It's been interesting. Actually, I think when it started, I know our activity with the startup community, I thought there would be a big contraction, but it was actually quite the opposite. We saw increased activity in early-stage companies despite maybe some lower funding levels at the earlier stages. There's still a lot of dry powder on the side.
But watching the pandemic unfold kind of slowly, it's been interesting to watch activity increase within the startup community, which I think is largely just in response to finding solutions for this, like, super-unique problem that we have.
ADAM SHAPIRO: When you talk about a lot of dry powder on the side and with interest rates as low as they are, there's going to be a bit more money, is there a chance-- I mean, you're a savvy and wise person. Your dossier, you know, speaks to your already, you know, massive experience at AWS and several other initiatives. But a lot of people could get burned. There's a ton of money out there that's going to be chasing a lot of startups which may not have the value.
JASON WILLIAMSON: Right. So it's interesting too because one of the things I think I was seeing happening going into this year, besides the pandemic, was valuations kind of getting more realistic. So I think we'll continue to see that.
So even though there is more startup activity, early-stage investment is harder to find. I think super early, like the seed stage, is not as much. It just means that I think startups are going to have to work that much harder to provide real value to investors to show that what they're building is useful and desired and wanted.
So in the end, it's actually better for the founder and better for the investment community. But I think that compression of more realistic valuations coming into play with lots of dry powder but more intentionality because of our environment and how that's going to get applied, we'll see-- we'll see that. I think convergence seems to be the word of the day is what we're going to see in that area.
SEANA SMITH: Jason, where are you seeing, I guess, the most interest in this space? And then with the incoming Biden administration, does it change what's attractive at all?
JASON WILLIAMSON: Sure. So I think, you know, when we talk about what's interesting or what's emerging in the space, at least from our perspective at Oracle, has been a lot of startups taking advantage of high-performance computing. So that's where we see a lot of research being done and startups being done with artificial intelligence. You need really fast chips that can run really cheap, and that's something that Oracle has been doing very well.
So we're seeing a lot of investment both from the investment community and from the startups. And because this computing is more ubiquitous, meaning it's cheaper and faster, we're seeing a surgence of startups doing that, and it's really from all places around the world.
So, you know, how does that play in with the upcoming administration? I don't think it's going to change that much. We'll see how things impact-- are impacted. I think Georgia is going to, you know, dictate some of that.
But with the uncertainty that we had with the pandemic and rolling into the Biden administration with the lack of innovation that's been coming out, I don't really see a slowdown with this space. I mean, people with the startup DNA, they're going to build things no matter what, right? So if there's a problem, it's going to be solved. So the upcoming administration I don't think is going to impact innovation in the short term.
ADAM SHAPIRO: When you talk about intentionality, for years and years people have been left on the sidelines in the startup world. Are you actively looking for people of color, for women who might have startups that have not traditionally been funded?
JASON WILLIAMSON: Sure. Funding and equity has been a really big issue in the community as a whole and something that we have been intentional about for a while. So we have a handful of startups that we work very closely with that are people of color and female founders.
So Snap Vision and Transmute and Jobecam and Gapsquare, all fantastic companies that you guys can go look up that are female founders. So thinking about how do you deal with this is something that we're having to really invest in.
You know, I'm a big believer in you reap what you sow, right? And so we're reaping what we sowed in the past several years, which is not that much, right? So for us to be able to continue to look at this space with flattening the inequities, we're going to have to make investments in this community and be patient where it takes to be patient and move quick where it can-- where we need to move quick.
So this is something that's really important to us. It's something that we are actively pursuing, actively measuring, and are excited about what we're seeing.