Billy Libby co-founder and CEO of Upper90, a hybrid investment firm that provides tailored debt and equity to technology startups with predictable revenue or collateral.
As the company’s tagline goes, “It’s not how much you raise. It’s how much you own.”
It’s the latest in the Random Walk quasi-series of “new and indifferent in capital markets a.k.a Private Capital 4.0.”
We cover a lot of ground, from when and why debt makes sense for venture-backed companies (and why it’s underutilized), to new classes of assets to lend against (and how to underwrite them all), and what to make of the current dislocation in private capital markets.
Personally, I think it came out well, and thanks to Billy for sitting with me. As per always, I recommend watching at 1.25x speed.
The highlights:
00:01:00 What does Upper90 do?
00:02:45 genesis of the idea--bringing sophisticated finance to solve complicated capital problems. Venture equity is a brute force instrument. There are other ways.
00:05:57 Octane Lending, a case study
00:07:34 Big shake up in venture coming
00:09:29 Using debt to be opportunistic during a period of dislocation, and underwriting the full gamut of assets
00:12:50 Building an LP base as a deal sourcing engine, and creating connectivity in the venture ecosystem
00:15:18 Where does debt make sense in venture (and where does it not)--the opportunities are huge
00:19:50 What does a debt and equity strategy look like for LPs? Is there creditor-on-creditor violence now?
00:23:40 Rescuing companies that aren't "hyper-growth" and what happens to the funds that bought too high and the founders that raised too much?
00:31:45 What's the path forward for VC? Does the strategy evolve? The premium to a hands-on approach.
00:38:03 Is Private Credit the new banking? It's the hot new asset class, but is it too much money chasing too little good risk? What makes Upper90 Different?
00:45:30 What are LPs thinking right now?
00:50:53 Magic wand fix, biggest mistake, and most contrarian belief.
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New school lending, to old school venture: A conversation with Billy Libby of Upper 90