This is Bloomberg Business Week with Carol Messer and Jason Kelly on Bloomberg Radio. So do you want to bring in our next guest Um at this hour? Because he is certainly well known um in the venture capital world. He was an early vc UM investor, from Patrick Off and Code to Apax Partners to today he's the founder and managing director of grey Croft. It has about a billion dollars under management, and he has helped build and grow such companies as A O L Office Depot, Apple,
so many different companies. Allen joins us on the phone in New York from Southampton. M Allen, nice to have you here with us. First of all, I hope you are well your family as well. We did actually get to speak with your son Mark last week. Yeah you hear about sport, Yeah, exact streaming, streaming and politics and so many different things. You Patrick Offs, You guys are very intellectucy, curious and dare I say, uh uh, corporately promiscuous in the best way, Alan you get you have
so many interests. I've got three sons and they all are very active. So at you you have been an active investor, and I first want to ask you. Um, let's do big picture. How you see this virus because it has certainly upended our world as we know it on every different or from every different angle. Um, how do you see it? How do you see the stimulus that's being talked about in Washington? And and can you even start to think about the other side of it
when we get through it. Well, listen, it's very obvious. This is the I think, I don't know how you gol anything less and devastating to certainly small growing businesses. Uh. You know, to the companies that are larger, the ibms, the Microsofts of the world, they can withstandard Apple people with great balance sheets and lots of cash on hand,
they'll be you know, they'll whether it's fine. The real challenges to the smaller companies, even small below the venture capital level, the local businesses with small shops and small whether they're industrial type companies or or retail or consumer service, they're all being severely affected. Uh and I you know, and that's going to be here for the next thirty
nine days. I mean, this peak point we keep hearing the first it was April ninth, and it was April fifteenth, and April and now we don't know when the data is where it's been a peak, but I think we're in for a difficult kid time going forward. And so Alan, what does that mean for you? Know? You you mentioned that the big firms are are resilient. Tell us more about smaller companies because you know they have less wiggle room. You know, some of them don't have those fortress balance
sheets that big companies do. What's the mood among you know, the smaller companies that we know you're in touch with. Well, yeah, which is my area focuses, right? Should smaller companies are in a very disadvantageous position unless they have a very strong cash position, uh and not a lot of debt. Uh,
they are going to be under severe pressure. And even if they have cash, if you don't have enough cash on hand for six to twelve months at least, uh, you're gonna have real concerns and an environment where raising money is going to be harder than it's been and it's never easy. I think that you're you have already seen immediately, uh significant layoffs, and I think you're going to continue to see that. I would expect the unemployment
figures are going to increase dramatically even further tomorrow. Uh, and I think we're gonna be seeing that for the next couple of weeks. So we get to a level point in the business world. Forget about leveling off of the flattening off of the of the virus curve. I think the uh problem in the business is lay up. It's just not people are doing gradually. They're not all acting fast. But frankly, the secrets is staying alive. Here is to take quick action and to not to contemplate
and study the problem too long. I think that one has to get a visit in a financial shape very quickly, and which means cutting your expenses and realistically reassessing what your revenue expectations can be in this environment and you know which customers you have are going to survive, who is going to pay you and managing your cash. What does that mean for your portfolio companies? I mean you're
invested in gaming, fintech, healthcare, software, publishing. I mean you're in so many different areas healthcare, Um, what does it mean for your portfolio companies? What are you saying to them? Um, what are your expectations in terms of their survival? Well, Uh, we're across the board. As you just said, I mean clearly if you're in the the areas of healthcare, you're okay. If you have any kind of service that's performed from the home. Uh. You mentioned gaming where a company called
Scope lead another one called Dots. Both of those are games companies that people pay on play online. They're doing very well in this environment. We have a to home delivery grocery companies, one quotes Thrive Markets, which is kind of a uh better less coarsely try Whole Foods. And then we have another company called Box which is doing bulk delivery, which is a even cheaper cotsco. So those companies are doing well and our hiring people and can't
meet meet up with the demand. We have companies that are dealing with special aspects of the public market, building portfolios on online and they're doing very well. So I think it really is uh selective. As you're in a retail store chain, you've got a lot of problems. Fortunately, we don't have too many companies that are in the retail area. Most of our companies are in e commerce that are selling merchandise, and so far those things to
be holding up. But everybody has got a look take a new look at their budget for this year and say, realistically, you know, I can't just expect that what I call a cast stade of miracles, which is everything is gonna be all right, and everything's gonna turn out well, and and I think you've got to prepare for, you know,
a really severe thunderstorm and perhaps a hurricane. Still with us, Alan patrick Off, founder managing director of great Croft Ventures Carol did a nice summary of his long four decade career in the world of tech finance, backing well known companies. Still in the business of startups very much, Alan joins is on the phone from the Hampton's where I trust. Uh A lot of people are Alan, what's it like
out there? Well, it's not Times Square, but I think people are following the rules and things secluded, and I think that, uh, you know, we're in my home and very tight and not having visitors and not visiting anyone else, so we're like everyone else is following the rules. There are a limited number of cars on the road, and there are all the only people that are open to the restaurants which are served have take out at night and at a drug store. But other than that, everything
is shut down it. Yeah, it's very interesting. Well, normally, uh, in in a normal part of a normal year, uh, certainly presidential election year, we would certainly be talking to you in a different context about the political world. We'd be looking ahead to the Democratic convention. You obviously backed a lot of Democrats over the years. What do you make of the political landscape in all of this, and what do you think happens from here, especially on the
Democratic side. Well, it's no secret I've been supporting Joe Biden since he announced and before he did last March, last March actually almost a year, and uh, I still a very loyal supporter and very enthusiastic about his prospects for winning. I think he's got a difficult position, uh. Sequestered, uh and comfortable to went to Churchill during World War Two,
sequestion in the war rooms underground. Uh. He's in his own mini TV studio and not able to go out in campaign and do that famous thing in politics in which has touched people on their hands and their shoulders and greet people. And I guess that's even when this starts getting better, that that possibility is going to end also, So it's going to be a different kind of campaigning different fundraising challenges is much greater because you can't have
any live events. Everything's got to be virtual, UH, and it's it's not as easy to stimulate high donors in a virtual environment. I think it's not a problem for most online UH small donors. They they've been doing that regularly since last year, and he's had some very good online months. I'm not familiar with what they did in March, but certainly UH going into that month they would have had record weeks until this thing happened. So I think
it's a it's a challenging environment. I think Joe is still a candidate who's going to prevail UH and the oil and I will stay that way and I will
be act doing everything I can actively. I think in the congressional sense, UH, I think the phones UH bring off the hook UH daily becomes the progressional people are reading for Congress all over the country who have every UH name on a list that they can cold call and UH they have no hesitation, and so I think the so it's a real challenge for everybody on a local as well as the national level level to get
to raise the funds and get their message. Of course, even even more importantly, Allen, how you know, in any normal year with an economy tanking, one would think the incumbent doesn't even stand a chance politically. But this is a year unlike any other. You know, There's been folks, including the President, have talked about it as like we're
in a war, you know, a health war. UM. And I'm wondering how you think the economy, the handling of the virus, the virus itself will ultimately impact the outcome. I mean, you understand the political world better than most, So how do you think all of this will ultimately impact the outcome? I think it's uh. First of all, Donald Trump was running on the basis of having a very very strong economy, and we all know how many times you referred to the stock market UH as a
mind of his success. I think that that UH line, that logo line, that buzz where it is really going away. And I think that he certainly can't point to that. On the other hand, UH, In all fairness, I don't think anyone could ever have anticipated what is happening now, whether it's a month later or not. The decline that's taking place is so dramatic that the economy's success is going to be far less a factor than it might
have been otherwise. I think that so you get back to how the how the healthcare issue is handled is front and center. But I think you've come back to before we get there in September, and even if they ascuse me, in November, even before you get there, there's going to be a chance to see these two candidates had to had in some fashion. Uh, even if they're standing on the stage with no one in the room, and we're going to get a good sense of who
these people are. And I think that Joe will come out on top in terms of his his style and his knowledge of of domestic and foreign affairs, his ability to cross the bipartisan divide. And I think that that's where he will show himself and our president current president will I think, bluster and and and exaggerate and make lots of claims and uh, I think we're gonna have to live with that, and you know, calling people names
that he'll create. Uh, it was just the style where we will you know, gotten used to over the last four years, and hopefully the public will see through that. I I think I think we've all come to realize
who the real Donald Trump is. And I think the real Joe Biden everybody is known for forty years, thirty years, uh, forty years probably, and Uh, I know the kind of man he is and the character he has, the compassion and he has, and I think that will show through when two of them are standing on a stage together. I'm sure Donald Trump will do everything he had not to be on that stage with him, but I don't think in the end he'll have to have a choice
on that. Alan, you think you think we will get to a point that where they're both sharing a stage again. I mean, we're all kind of waiting to see what happens or whether there's a second wave of all of this, but you do foresee that ultimately, by November will be in a situation where we can have two candidates safely on a stage despite the virus. Well they might be.
I don't know if they'd be safe even if there were no virus, right, And so, Alan, Um, I do want to ask you something We've been asking all of our um, all of our guests, especially those with a lot of experience like you have, uh in the market, what changes on the other side of this, maybe something that is under appreciated. How does the world change, and especially through the lens that you look at as an investor. I like that question. It's a very good question. It's
it's absolutely where we should all be thinking. How is the world going to be different whenever this ends? And I think it's going to have some profound differences. First of all, I think we've all learned to work virtually. What's the implication going to be for high rise office buildings and clusters enormous clusters of of office workers, particularly doing uh standard functions, uh whatever, whether it's an assurance industry, the banking industry, whatever it else. We don't need, you know,
a hundred thousand squareput possibly will not need that. Maybe the top people people are doing uh decision making need to get together. But I think that will change in how our work. I think we've all gotten used to being We may get used to a four day work we who knows, I think we we will also have a much greater appreciation I hope for the medical profession and what's being done and what is being done, and
that includes nurses, doctors. I would assume deadness included. The E M T group are safety people who are making enormous sacrifice that I think people will have a greater, greater understanding. I think thirdly, I think we're all learning too, you know, as a family, as family groups, we're learning to learning about each other and learning how to that the family meal is a tradition that maybe we'll be restored again. And I think that, uh, there may be
a kinder, better world. And I don't mean to be you know, too over uh schmaltzy in terms of uh, you know, uh motherhood, but I think I think that's a possible, very probable outcome. Another thing I think, which is probably not as good, is I think that we're going to become more and more nationalistic. I think, uh, there's been a strong trend even before this happened, our president being the leader of it. It also bars Johnson
and in England, what's happening in Italy. With's happening a lot of countries who are becoming more isolated, more less globally, and I think that that's going to change the nature of our of our home to international society. And it comes to the time where we need cooperation for the climate, which I think everybody realizes even now, maybe when they're
outdoors more is an important thing that's worth saving. And it's gonna be a lot harder when we have a lot of countries who are all they all they're going to focus on is their own self interests will be less importing. Uh there'll be more of a trend to try to manufacture at home and not depend on other people, whether it's oil or whether it's electronic components. So I think there's going to be a lot of changes, and
that's things we should be thinking about. How how is this world going to look like when we come out of this uh pit that we're in. So this is like the perfect it end, But I have to ask one follow up? Will it impact? It sounds like obviously it will impact maybe you're investing going forward. Yeah, I think sure it is. I mean we'll be looking at different kinds of companies that provide different kinds of services,
and out of all uh upheavals come new opportunities. And I think that's the way you have to look at it. That adversity brings the opportunity, and it's for the the wise, the astute, the the pioneers, the adventuresome who will take chances in new ideas, new technologies, new concepts to deal with the world that we're going to be living in, whether it's in June or September or drive forbid it, you know, even later. But you know we all, we
all like to see that happen sooner rather than later. Well, we wish you so well, Alan, and thank you so much, Um for finding a nice tunk of time to spend with us and really get your insights. So do take care of yourself and your family. I'm delighted to have Alan Patrick off with us, of course um the founder and uh managing director of greg Crop, but really someone who's legendary within the venture capital world, Jason and the political world to political you heard it all. There is
the scope. You can tell why he has such smart boys. He's a good guy. Uh. In any case, Alan PATRICKROF grateful to him.