Sapphire Ventures’ Cathy Gao on how VCs can help early-stage startups weather volatility

When we talk about early-stage startups, we tend to focus on the internals — and understandably so. It’s easiest to home in on the things you can control: developing products, building a team, finding the right investors.

All are important and foundational to developing a startup, of course. But as much as we’d like to believe that the right product developed by the right team is enough to ensure a firm’s success, things in this world are never that simple.

When Cathy Gao closed out our Early Stage event last week, she had one big word on her mind: volatility. The Sapphire Ventures partner (who primarily focuses on later stage) has plenty of experience on both sides of the fence. In addition to working as a VC, she currently sits on a number of startup boards, including SafeGraph,, Gem and Medable.

Prior to her time at Sapphire, Gao focused on finance, strategy and product at Gusto during the fintech’s Series B round. We tend to have a short memory when it comes to things like volatility and instability — especially now that we’re well into year two of a pandemic. But Gao is quick to point out that the world was grappling with both before COVID gained a foothold. When she worked at Gusto 2016, there was already plenty of uncertainty.

“Donald Trump was elected president of the United States,” she noted. “Brexit happened, the price of oil plunged, and the world was battling a Zika virus. All in all, 2016 was a very volatile year for the markets. … Because of all the market volatility that year, and a lot of alarmist news headlines internally in the finance team, we were saying, ‘Winter is coming,’ and we got prepared against market volatility. Ultimately, winter never came.”