image

ENTREPRENEURSHIP 2, 1.10 (V) (Optional) The Pitch Process - A VC's perspective (2)

And so we have amazing LP's that are investors on our front, and it's something that's interesting but when we're fundraising, we're basically just like the founders. We go, we have a pitch to add, we've got a financial model, we've got here's our team, here's all the stuff we've done, our attraction and so it seems very much like we are in fact the founder pitching to ourselves. It's a little bit of a strange dynamic. » Meaning they don't return your phone calls either. » Exactly. » [LAUGH] » When they have time, you change your entire schedule to go meet them wherever they want to meet, and kind of have that humility as well. So we know how you feel, the founder perspective. So anyways, so we're investigating on behalf of all of the capital that's been invested into our fund. And we track metrics, whether it's revenue to plan or new customers, or new users. We'll figure out with each company as they're onboarded what are the key metrics that actually start to build up to some semblance of what success could look like. In the early days there was not much going on, so anything is positive. Assuming it's moving forward. But over time we start to realize okay well, if this is a business that requires marketplace dynamics. Well then who's a buyer, who's a seller? Are the buyers becoming sellers? Okay, then how much are they buying? So you start thinking about what numbers really help support a view. And I think what's fun for us is, in a world where people are talking a lot about heightened valuations and mark downs and all this stuff. We look at our portfolio and we say, we avoided the crazy mark up situation, and we feel really confident that the valuation that our companies have are warranted. But one statistic we actually pulled for our own pitch stack was that our portfolio has $900 million, almost $1 billion of revenue. » Wow. » Just companies in our portfolio. » That's actual revenue. » Actual revenue. And I think that's really notable. So we work really hard to to invest in companies that have real business models. » Yeah. » And are really sort of offering to the consumer, whoever the consumer is, I think that's a little different than maybe audience faced businesses. Or things that are a little bit more intangible and take a long time to figure out what the monetization would be. » Right. I have a lot of you people tell me they want to be venture confidence, and you probably hear that yourself. But tell us a little bit about how you got into the business and what advice you'd give to someone. » Sure. I think it's such a serendipitous path for a lot of people. There's a handful of folks who can just go the finance route, or banker, or it was in school. You came out and you went to a big firm, and that's great. But more and more I think Venture capitals about what your unique perspective is, what you have to the table that might attract the founder. And honestly founders have so much diversity. So I connect with you as a partner, I'm more likely to come to you for investment capital. If it's somebody that I feel, like doesn't understand where I came from or what I'm even trying to do, then no matter what fancy brand the firm is, it's happening such that doesn't make as much of a difference to the founders. So as a result, my quick background is, I started off at management consulting at bay here in San Francisco. It was the best starting point in a career that I could ever have. You learn how to be a good business person, you learn how to be analytical, you learn how to think about what is important for a business to be sound. And at the time i was able to get into the retail practice pretty quickly, I already had a passion for the consumer perspective and put up my hand and said this is what I want to learn more about ,so managed to do that and I also. » Within Bane? » Within Bane, and we had several. » Were really large retail clients that were great brains in the market. But really thinking, and this was a long time ago, so they were thinking more like okay how do you generally grow? What's the market expansion plan? What's the cost reduction plan? So general stuff. And then private equity was pretty hot back then, and so I got into a private equity group and was learning what investing looked like. But really the consultants that supported those Investments we're thinking about is this a good business? What opportunity is there in the market and what does this business think to look like to make it an attractive investment. So it's a little bit more tactical. But through that, I ended up moving over to a private equity firm that was consumer retail specific. So really tying the gap between investing and retail more closely, and that was at Castanea partners which is a firm in Boston and they really have an active management approach too. So you invest in few companies but you spend a lot of time with the companies. Really helping the founders, ultimately the family that ran the business or the founder that ran the business think about how to scale. So you've got a great. Company, you're 20 million in revenue, you've got a few million in cashflow. What do you want to do with it? You want to grow it to, 50 stores, or do you stay at five stores? And so those are all the foundation of just tactical skills that I learned, but I always had a passion for entrepreneurship. Wanted to start something. Had a bunch of ideas. But, it was always like, I think I need to learn this I think I need to learn that. At a certain point I thought, I've learned a lot, I should probably just do it. I don't know if I have the right idea but I could just get out there and do it. At the time actually when I went to Wharton, it was a time where I had an Idea, maybe didn't have quite all the pieces aligned to just go out there myself and have a team. I didn't know anything about the industry I was thinking about disrupting. And so Wharton was a great place where I took all these entrepreneurial management classes. I was able to write my business plan, my financial model, my marketing strategy, my consumer research all in classes at Wharton, which was so fun. Actually thought of a bunch of ideas in your class but they didn't work. [LAUGH] And I spent a lot of time watch Wharton entrepreneurial programs, venture initiation programs. » Mm-hm. » Spent my summer launching the company. So it really took my time at Wharton and threw it into starting a business. And after that, for family reasons, after graduation I had to come back to the bay area. » Yeah. » And so it didn't make sense for me to continue my business in New York. » Yeah. » So I said, okay, well, personal things always happen. » Sure. » And you've got to be flexible, so I said being here, they're an amazing team. I love everything I've done there. Why don't I go back, reinvigorate my network in the bay area. Think about what ecommerce is looking right now, and it was definitely percolating more and more. And so I spent another two years back at bay doing exactly that. And I think that was the best decision for me at the time, because it actually got a sort of top level view of the way traditional companies were thinking about the changes in the industry. And then when I met Kirsten through a business school classmate of mine and my cohort, she was really pulling together the thesis for enough happening in the commerce space and technology being at this critical mass that it was time that a firm could really focus on this space. And so we met and there was nothing there. A foreigner was one investor, Kirsten, 20 companies in her angel portfolio and no office. » Yeah. » And that in itself is like starting a start up company. So I think my experience, because having done all these different things, allowed me to say, I can leave this amazing company right before promotion, leave all this money on the table and just try this thing. And at worse, it'll be interesting. It'll be a ride and I'll learn a lot. So. » Now that was how long ago? » It was in late 2011. » Wow. » We started early, 2012, so almost four years. » Yeah, yeah. » Time flies. » Yeah. So if I go to the website, I click on about us. I'll see five women. Five lovely women by the way. » Thank you. [LAUGH] » [LAUGH] And five lovely women, is that, let's forget the lovely part. But is it accidental that it's five women? » It actually is accidental. So when I met Kirsten, she had met a bunch of different people. She was looking for maybe a partner, maybe not, definitely someone to help get this thing off the ground. And we both happen to be women and happen to have a lot in common, so we really connected. Then when we hired Nicole as our analyst, she was reaching out actually to get a different job. She was trying to get a job at Everlane. [LAUGH] She's like, I kind of want to be in marketing, I don't know, and I'm like okay, that's a great idea. It's a great firm, great brand, tell me about what you like about it, and as we're talking I went, this is somebody who has a lot of analytical skills. Marketing is a great place for that person, but kind of just pitch what you think about being in venture capital, which I can't imagine. I don't even have any finance background. You don't really need it all the time, so I managed to bring her on board. But that was also accidental. And when we were thinking about extending to marketing expertise. [INAUDIBLE] And so I think it was accidental because we were looking for people who are passionate and smart about what we were doing. » Mm-hm. » And thinking about the expertise that we were trying to build into the team. I think what's not accidental about it is when you think about it from a consumer landscape. Then you do find that, hey, women happen to be a lion's share of the consumer dollars. So people who are passionate about our space may be over next to being women. We find that in our portfolios about 60% male founders, 30% female founders, 60 40. But again not by design, just happens to be so. And so, we often think about it, should we hire a male counter part. Just because we're all female and maybe that's discrimination. » Mm-hm. » And I thought, we should just hire the best person. » Yeah. » And we would be so happy if a guy wants to come in and bring his perspective and a new idea and and new sort of role in the team, and that would be awesome. » Mm-hm. » He would obviously need to have got of a lot of sisters because we. » [LAUGH] » Definitely behave like a big family. » Yeah. » But I think that we've also benefitted from having our perspective because it's definitely unique in the market. A voice at the boardroom table that is different. » Mm-hm. » And the way of thinking about deals that's a little bit different. » Yeah. » So we collaborate with a lot of other firms on the market and their teams are primarily male, 100% male. So we aren't going to go out of our way to try to infuse diversity for the sake of it.



Want to learn a language?


Learn from this text and thousands like it on LingQ.

  • A vast library of audio lessons, all with matching text
  • Revolutionary learning tools
  • A global, interactive learning community.

Language learning online @ LingQ

And so we have amazing LP's that are investors on our front, and it's something that's interesting but when we're fundraising, we're basically just like the founders. We go, we have a pitch to add, we've got a financial model, we've got here's our team, here's all the stuff we've done, our attraction and so it seems very much like we are in fact the founder pitching to ourselves. It's a little bit of a strange dynamic. » Meaning they don't return your phone calls either. » Exactly. » [LAUGH] » When they have time, you change your entire schedule to go meet them wherever they want to meet, and kind of have that humility as well. So we know how you feel, the founder perspective. So anyways, so we're investigating on behalf of all of the capital that's been invested into our fund. And we track metrics, whether it's revenue to plan or new customers, or new users. We'll figure out with each company as they're onboarded what are the key metrics that actually start to build up to some semblance of what success could look like. In the early days there was not much going on, so anything is positive. Assuming it's moving forward. But over time we start to realize okay well, if this is a business that requires marketplace dynamics. Well then who's a buyer, who's a seller? Are the buyers becoming sellers? Okay, then how much are they buying? So you start thinking about what numbers really help support a view. And I think what's fun for us is, in a world where people are talking a lot about heightened valuations and mark downs and all this stuff. We look at our portfolio and we say, we avoided the crazy mark up situation, and we feel really confident that the valuation that our companies have are warranted. But one statistic we actually pulled for our own pitch stack was that our portfolio has $900 million, almost $1 billion of revenue. » Wow. » Just companies in our portfolio. » That's actual revenue. » Actual revenue. And I think that's really notable. So we work really hard to to invest in companies that have real business models. » Yeah. » And are really sort of offering to the consumer, whoever the consumer is, I think that's a little different than maybe audience faced businesses. Or things that are a little bit more intangible and take a long time to figure out what the monetization would be. » Right. I have a lot of you people tell me they want to be venture confidence, and you probably hear that yourself. But tell us a little bit about how you got into the business and what advice you'd give to someone. » Sure. I think it's such a serendipitous path for a lot of people. There's a handful of folks who can just go the finance route, or banker, or it was in school. You came out and you went to a big firm, and that's great. But more and more I think Venture capitals about what your unique perspective is, what you have to the table that might attract the founder. And honestly founders have so much diversity. So I connect with you as a partner, I'm more likely to come to you for investment capital. If it's somebody that I feel, like doesn't understand where I came from or what I'm even trying to do, then no matter what fancy brand the firm is, it's happening such that doesn't make as much of a difference to the founders. So as a result, my quick background is, I started off at management consulting at bay here in San Francisco. It was the best starting point in a career that I could ever have. You learn how to be a good business person, you learn how to be analytical, you learn how to think about what is important for a business to be sound. And at the time i was able to get into the retail practice pretty quickly, I already had a passion for the consumer perspective and put up my hand and said this is what I want to learn more about ,so managed to do that and I also. » Within Bane? » Within Bane, and we had several. » Were really large retail clients that were great brains in the market. But really thinking, and this was a long time ago, so they were thinking more like okay how do you generally grow? What's the market expansion plan? What's the cost reduction plan? So general stuff. And then private equity was pretty hot back then, and so I got into a private equity group and was learning what investing looked like. But really the consultants that supported those Investments we're thinking about is this a good business? What opportunity is there in the market and what does this business think to look like to make it an attractive investment. So it's a little bit more tactical. But through that, I ended up moving over to a private equity firm that was consumer retail specific. So really tying the gap between investing and retail more closely, and that was at Castanea partners which is a firm in Boston and they really have an active management approach too. So you invest in few companies but you spend a lot of time with the companies. Really helping the founders, ultimately the family that ran the business or the founder that ran the business think about how to scale. So you've got a great. Company, you're 20 million in revenue, you've got a few million in cashflow. What do you want to do with it? You want to grow it to, 50 stores, or do you stay at five stores? And so those are all the foundation of just tactical skills that I learned, but I always had a passion for entrepreneurship. Wanted to start something. Had a bunch of ideas. But, it was always like, I think I need to learn this I think I need to learn that. At a certain point I thought, I've learned a lot, I should probably just do it. I don't know if I have the right idea but I could just get out there and do it. At the time actually when I went to Wharton, it was a time where I had an Idea, maybe didn't have quite all the pieces aligned to just go out there myself and have a team. I didn't know anything about the industry I was thinking about disrupting. And so Wharton was a great place where I took all these entrepreneurial management classes. I was able to write my business plan, my financial model, my marketing strategy, my consumer research all in classes at Wharton, which was so fun. Actually thought of a bunch of ideas in your class but they didn't work. [LAUGH] And I spent a lot of time watch Wharton entrepreneurial programs, venture initiation programs. » Mm-hm. » Spent my summer launching the company. So it really took my time at Wharton and threw it into starting a business. And after that, for family reasons, after graduation I had to come back to the bay area. » Yeah. » And so it didn't make sense for me to continue my business in New York. » Yeah. » So I said, okay, well, personal things always happen. » Sure. » And you've got to be flexible, so I said being here, they're an amazing team. I love everything I've done there. Why don't I go back, reinvigorate my network in the bay area. Think about what ecommerce is looking right now, and it was definitely percolating more and more. And so I spent another two years back at bay doing exactly that. And I think that was the best decision for me at the time, because it actually got a sort of top level view of the way traditional companies were thinking about the changes in the industry. And then when I met Kirsten through a business school classmate of mine and my cohort, she was really pulling together the thesis for enough happening in the commerce space and technology being at this critical mass that it was time that a firm could really focus on this space. And so we met and there was nothing there. A foreigner was one investor, Kirsten, 20 companies in her angel portfolio and no office. » Yeah. » And that in itself is like starting a start up company. So I think my experience, because having done all these different things, allowed me to say, I can leave this amazing company right before promotion, leave all this money on the table and just try this thing. And at worse, it'll be interesting. It'll be a ride and I'll learn a lot. So. » Now that was how long ago? » It was in late 2011. » Wow. » We started early, 2012, so almost four years. » Yeah, yeah. » Time flies. » Yeah. So if I go to the website, I click on about us. I'll see five women. Five lovely women by the way. » Thank you. [LAUGH] » [LAUGH] And five lovely women, is that, let's forget the lovely part. But is it accidental that it's five women? » It actually is accidental. So when I met Kirsten, she had met a bunch of different people. She was looking for maybe a partner, maybe not, definitely someone to help get this thing off the ground. And we both happen to be women and happen to have a lot in common, so we really connected. Then when we hired Nicole as our analyst, she was reaching out actually to get a different job. She was trying to get a job at Everlane. [LAUGH] She's like, I kind of want to be in marketing, I don't know, and I'm like okay, that's a great idea. It's a great firm, great brand, tell me about what you like about it, and as we're talking I went, this is somebody who has a lot of analytical skills. Marketing is a great place for that person, but kind of just pitch what you think about being in venture capital, which I can't imagine. I don't even have any finance background. You don't really need it all the time, so I managed to bring her on board. But that was also accidental. And when we were thinking about extending to marketing expertise. [INAUDIBLE] And so I think it was accidental because we were looking for people who are passionate and smart about what we were doing. » Mm-hm. » And thinking about the expertise that we were trying to build into the team. I think what's not accidental about it is when you think about it from a consumer landscape. Then you do find that, hey, women happen to be a lion's share of the consumer dollars. So people who are passionate about our space may be over next to being women. We find that in our portfolios about 60% male founders, 30% female founders, 60 40. But again not by design, just happens to be so. And so, we often think about it, should we hire a male counter part. Just because we're all female and maybe that's discrimination. » Mm-hm. » And I thought, we should just hire the best person. » Yeah. » And we would be so happy if a guy wants to come in and bring his perspective and a new idea and and new sort of role in the team, and that would be awesome. » Mm-hm. » He would obviously need to have got of a lot of sisters because we. » [LAUGH] » Definitely behave like a big family. » Yeah. » But I think that we've also benefitted from having our perspective because it's definitely unique in the market. A voice at the boardroom table that is different. » Mm-hm. » And the way of thinking about deals that's a little bit different. » Yeah. » So we collaborate with a lot of other firms on the market and their teams are primarily male, 100% male. So we aren't going to go out of our way to try to infuse diversity for the sake of it.


×

We use cookies to help make LingQ better. By visiting the site, you agree to our cookie policy.