Understanding How Venture Capital Works in 2023 with Scott Heyes

Episode #42

Inflation is rising, interest rates are up across the globe and cash is king again. How will this impact the flow of venture investments in start-ups and emerging technologies?

While traditional investments may suffer during a recession, the venture capital industry has historically been able to weather the storm and even thrive. One reason for this is that venture capital firms typically invest in early-stage companies that are not yet generating significant revenue.

In fact, some of the most successful companies in recent history, such as Uber, Airbnb and Snapchat, were founded during economic downturns. The downturns created opportunities for entrepreneurs to innovate and create new solutions to problems caused by the economic conditions.

Mendoza Ventures is one such investor, but with a unique approach. Mendoza’s investment strategy is focused on the verticals of AI, fintech and cybersecurity and 80% of their investments go to founders from diverse and minority groups.

I recently caught up with Scott Heyes, CFO at Mendoza Ventures to understand how a venture capital firm works in practice and how he and his colleagues think about investing in the current economic climate and beyond.

In this episode of Leaders of Analytics, we discuss:

  • How Scott became the CFO at Mendoza Ventures and what a week in venture investing looks like
  • How the firm decides which companies to invest in
  • Why Mendoza Ventures specifically back founders from diverse and minority backgrounds.
  • Which segments within AI, fintech and cybersecurity will win or lose during a period of uncertainty, inflation, reduced access to funding and higher borrowing costs.
  • The trends in AI, cybersecurity and fintech worth watching in the next 2-5 years, and much more.

Scott on LinkedIn: https://www.linkedin.com/in/scottheyes/

Mendoza Ventures: https://mendoza-ventures.com

Learn more about Annual Recurring Revenue in this episode.