Episode 92 – Why Companies Built by Women of Color Are The New Unicorns – Victoria Kennedy and Isabelle Seale (Seed to Harvest Ventures)

[00:00:00] Katie: Welcome to Building While Flying, a Sasha Group podcast where we interview business leaders about how they tackle challenges, stay resilient, and navigate ever-changing skies. Welcome to Building While Flying. My guests today are Victoria Kennedy and Isabelle’s. Seal co-founders of Seed to Harvest Ventures.

Seed to Harvest Ventures is a pre-seed and seed stage found investing in software companies built by women identified founders of color. Victoria and Isabel. Welcome to Building. While. Flying. So you are both former product design leaders you were in from the world of early stage startups and you’ve taken that knowledge to.

Really launching what is now a VC fund, but can you give us a little bit more about who you both are, a little bit of a part history of how you met one another and decided to go ahead and begin the world of venture capital and begin a fund of your own. 

[00:00:55] Victoria: Yeah. I think a good overview is, so Isabelle has a really great product design background and she’s mostly been at like B2B companies, really from that product market fit to scale phase.

. My background’s in product management and I love the beginning. So I’ve been mostly in idea at a product market, fit across a different, a couple different industries. And we actually met six years ago at a company called Hustle. Which was the first peer-to-peer texting application.

We’re sorry that you get all those textile, but at the time it was amazing .

[00:01:22] Katie: And it’s you that we have to blame for opening a whole new marketing channel. 

[00:01:27] Victoria: Yeah, we, millions of messages. Some of it was amazing. Like we’re. Like working with Stacy. Abram was a a client and when things were happening in Georgia with the voter boxes, like we were people texting people here’s your location, here’s the fact that you can actually still vote.

It got extended for three hours in a way that you can’t do via email or anything else. So it was cool, right? And then it got abused. But, we try but like we’ve been out the enterprise product together and we’ve been out a New York office together and just really worked super well together.

Had really. Like similarly weird backgrounds in terms of how we grew up, but also just like how we thought about tech and like how we think about building teams and building product. And so it was really a great team for us to do, is like design our product leaders. And yeah. Elizabeth more about her life.

[00:02:12] Isabelle: Yeah. Background. I think I started in engineering and design engineering was more of a forcing function. Cause when I started. In the industry, a lot of startups couldn’t justify a full-time designer, so it was a learning code or get fired situation . But that really deeply informed. I’m more of a systems designer and systems architect, and having that technical background is really informed how I approach design and tying that in with business value and working with product.

Like Victoria said, I’ve been on that cleanup crew where a lot of early stage companies have to cut corners to get going quickly. But it can come back to haunt you a little bit when you do have an opportunity to grow. And yeah, since working with Victoria six years ago, we’ve always kept in touch, pushed each other personally, professionally.

And so when she started. Exploring venture. I was along for the ride. As a sounding board, taking notes and I’ve always wanted to work with Victoria. Again, it’s, you say that a lot when you find someone that you love working with oh, I hope we can work together again. And just didn’t wanna pass up the opportunity to do that when seed harvest 

[00:03:18] Katie: came up.

That’s super exciting. I love the idea of like professional kismet and so often, like it’s the story of two great founders, so it’s great that you found one another. You kicked off seed to harvest and it’s pretty early, early stage still, right? As a fund. I know you are planning on probably making your first investments into like in 2023.

Yeah. But before we dive into just some of the detail on that, on your site you have that organizing statement if you will, of we believe that companies built by and for women of color are the new unicorns. Can you speak a bit about that kinda thesis and. and what sits behind where and where you’ve decided to focus on for this fund?

[00:03:58] Victoria: Yeah, so what’s been really interesting is as a product manager you’re always looking for problem statements and opportunity. Like where can I align what I’m seeing with the type of customers and problems we’re looking to solve? Like where can I find something that’s like a valuable business with a big enough market?

And so when we have been thinking a lot about like the issues we’ve seen in tech, it was really around Everyone’s focused on one type of founder and like the problem statements that they choose to care about, and that usually tends to be literally just like men, usually white men from Stanford and MIT and Harvard, if you’re feeling frisky, right?

And I went to Stanford. I love Stanford. It’s great. But not everyone needs to come from Stanford. Like you need variety in order. to build interesting, innovative things that’ll be long lasting. And something that we felt and then later got a lot more research on was like just the lack of innovation in tech.

 Was due to the fact everyone’s pattern matching to the same type of founders. And like the same type of check writers are writing those checks, those. To those founders. And so when we thought about like kind of root causes, we were like, how do you change, like who gets to be a founder who writes the check, to really capitalize on the innovation that tech can actually create?

So the research I started this was really around who are the emerging founders and where’s the market going? So when you think about the state of founders now, women of color are the largest group of entrepreneurs that are happening. Which is great. And there’s a lot of proof that women, like women in general tend to deliver 35% higher roi on investment dollars, 78 cents on the dollar versus 31 cents on the dollar for men. And All male teams are basically a overutilized and overvalued asset that, and everyone’s focused on them and we’re like, okay, there’s opportunity in women, specifically women of color right now.

But what we’re really focused on is in the future when you think about the types of companies that people want to work at and the types of companies that we think will succeed. One they usually building for like the big consumer, like there’s a big notion around. think Samsung’s really big on the next billion consumers, which looks to be woman of color, both globally in the US over the next decade. And Right now the tech is C ecosystem really is focused on founders and types of problems that don’t really address the next bill of consumers, which not just influences consumer products, but where how people work, what businesses look for, how B2B companies relate to each other.

And all of that right now is being missed. And so we see a huge opportunity in the future to really be the go-to fund for that and really be like kind of part of that changing e. . 

[00:06:21] Katie: That’s awesome. And it, it’s, I feel like we see these, some of these stats popping right? Or really discouraging stats popping up in the headlines.

I feel like the beginning of this year, like that, that 2% number’s been chasing female founders around for like way too many years at this point. And I think, yes. I think at the beginning of the year was that female founders just raised only two. And not even beginning to talk about fe women of color founders.

Yeah. Female founders , of all colors. Raised just 2% of venture capital in 2021, which was less than the year prior. What do you think it is that’s stopping the rest of the industry? From tapping into this it, and do you think as well, I mean I’m coming off the back of the very highly publicized, bromance with SBF and how much money was thrown into crypto and the kind of like shiny object of the eccentric young white founder

Do you think some of these things are a signal that maybe you guys are at the beginning of a wave and there’s more to come in the. . 

[00:07:24] Isabelle: Yeah, there’s definitely more to come. When you think about venture in and of itself, it’s, isn’t it fairly recent since the four, like one of the primary models and how this system is created and how people think about investing in companies is still fairly recent in history.

It’s no wonder that like the system, especially in the United States, is the way that it is. What we’ve found is challenging that playbook and trying to expect a different outcome. You can’t use the same. But you still need to find the principles that allow you to break in and advance. So that’s definitely one facet to the problem.

And by problem, like we really think about it more of an opportunity, like it gives us an edge and it’s really just looking where others haven’t. Whether it’s they already have their pipelines in place, or their systems in place, or their sourcing. my approach or our, I don’t wanna speak for Victoria, but my approach isn’t to change everyone else’s mind.

It’s where can we find success where no one else is and where do we deeply believe the opportunity 

[00:08:31] Victoria: is? Yeah, and I think something we talked about that’s actually been a change in, even like how we talk about the fund and how we approached any like materials, like our pitch deck when we originally started talking about this we initially had this step where we had the, like the 2%, all the stats that people know that were really like the lacking metrics and didn’t really reflect what we thought was a real opportunity.

So we changed the metrics. We started talking about it’s not that women of color are getting a small. Of VC funding is that women of color deliver heart, like greater investment return. Yeah. Companies that, like diverse companies, both gender and ethnicity wise tend to perform better when you think about like the diversity makeup of the executive team, and it does even more so for ethnicity than for gender.

And so we’re getting like kind of the intersection of two really positive. Signals for success for founders and so our companies long term that most people are ignoring. Yeah. What’s interesting and so that was a really big change for us because it’s we don’t want to talk to women of color.

A about women of color is if they’re like, Not capable. Like this is something we really care about a lot of times. Intent intentionally or unintentionally. I think people, because they, there’s all these like negative associations, not just with women of color, but women in general in terms of what’s lacking.

When you say oh, like we’re focused on women of color. They’re like, oh, they must need so much help, or, that’s really nice, and it’s no, this is an opportunity, like this is a, like a unprecedented financial opportunity that we’re talking about. And like that we’re going after. And a lot of people don’t see it that way, which I think prevents them from truly investing in women of color.

and that narrative actually thinking is like more damaging cuz the data’s there, like the data’s there to see. This is a great opportunity, but the narratives that people are used to hearing and just like the beliefs and the stories that we tell about women of color are always like usually so sad that it’s like, So it’s it’s hard for people to be like, oh, this step people talk about all the time, like those people we should invest in.

And it’s infuriating, but a great opportunity for us. And we talk about it like that. 

[00:10:30] Katie: It’s funny cuz it’s almost like meta. It’s turning the entire principles of all of the decisions that one would take when talking to a prospective company. Like evaluating whether they’re a good investment and applying it to the state of venture capital, like here is a giant under, under-recognized opportunity, and we’re gonna go over there instead of playing this overcrowded pond over here.

[00:10:54] Isabelle: We, we joke though, because it feels so obvious to us and again, we have the advantage because we’ve started a fund with that purpose in mind. . So if you were to have an existing. To change that, you’re changing the people who’ve invested in you, right? The way that you go about sourcing how you interact with people, it’s, I don’t think it’s a flip of a switch, but when we talk about it, a lot of folks.

Still, I mean, even when we bring in our product expertise is it’s, oh, do women of color need more help? No. Just like some funds are focused on marketing or PR or later stage funds have m and a experts, like we have that product expertise, right? And we use that as an edge, as investors and to ensure the success of early stage companies.

So it, it’s just interesting to. really how it’s perceived given, like Victoria said, just the social narrative that we have. Media, really everywhere around us. Yeah. 

[00:11:51] Katie: Yeah. That’s another, it’s almost the default where everyone flips into oh, it’s this news story that we’re playing 

[00:11:57] Victoria: into.

Yes. I think what’s interesting though about, at least what we’re seeing the changes of, in the VC ecosystem part at least, is so LPs are people who fund Funds, VC funds. . . And they can be family offices, high net worth individuals. They can be big pensions and foundations.

It all depends along your size and all these different major factors that is, Can be interesting or boring depending on who you are. But what I think is interesting from that standpoint, it used to be where basically people would pitch a VC fund and they would be like, Hey, I have a network. I a k I went to Stanford and I know a bunch of founders there, like employee at Google for a while.

So I know all the Google people who were gonna do a fund. And that’s how you got in is say what kind of exclusive network you have access to and then like put a general idea of what you’re investing together and call it a day. . , but now with the proliferation of so many VC funds, what’s interesting now is like the way people used to differentiate themselves.

Isn’t applicable anymore because there’s so many funds that, like if all of you, are networked at Stanford and Harvard then who cares? Where’s your brand differentiation mate? . Yeah. And I think for us it was a real turning point. We were hid a little bit from like our product and design our operator expertise at the beginning.

Cause like the normal VC background is I have a finance background or I worked at. Big name vc and now I’m like spinning out of that and starting my own fund, right? So people can like pattern match you to what existing works. Like we don’t match that pattern. At first. We’re kinda like, Ooh, I don’t know.

But what we’ve found that not only is it differentiated with founders who are like, I don’t want just money on my cap table. I want VCs to missionally, I want VCUs can be a true value add to me. Yeah. Which is like our tool for getting in, right? It’s if we, even if we vested in just FinTech.

Something else like a product and design skills would be still be the tool we use to get in with founders and to de-risk our investments. What’s interesting now is like we are really leaning into that and seeing really good positive feedback from LPs because it is truly differentiated in the approach.

I think what is still. What’s funny in terms of about that market perspective is being focused on women of color. A lot of times people are like, oh, there’s a lot of diversity funds. And no one says about FinTech or AI funds, right? There’s those, but and sometimes they’re differentiator, but a lot of times they’re just like, I have a background in AI and we’re gonna do this fun.

And people may or may not give them money. But what even we think about it from being a, like a quote unquote diversity fund perspective, even though we’re not like an impact fund, like a lot of funds that focus. women founders tend to focus on white women and a lot of funds that focus on underrepresented tend to focus on men of color and women of color largely still aren’t the majority of their investments are where they’re focused.

But again, that’s where you get that like double kind of plus about gender diversity and ethnic diversity that really propels businesses forward and is like what’s reflective of the future that all founders really need to build for, but women of color on the best seat and opportunity to build for that.

And It’s really fun cuz we’re like, it feels so clear. But in this changing demographics, it’s cool because I think we’re really well positioned to be unique. But then you’re still fighting that uniqueness battle too, where it’s like everyone wants to be unique but not too unique that they have to learn.

It’s like there’s 

[00:14:57] Isabelle: an education component that has to come with our storytelling sometimes. Totally 

[00:15:01] Katie: get that. And the frustration some ways of being on the crest. A wave that will be utterly normalized in a period of time, and you’ll just have been the first movers. Let’s talk a bit about that product and design background that you both bring to this, because I think exactly to your point.

So much of traditional. VC fund members will bring a whole load of that kind of pre experience of what investing is like and how to get your pitch deck in a good place and all the kind of storytelling behind it, but maybe don’t have some of that deeper, like what it is to launch a product that actually works in market time and time again.

Talk about how that’s influenced how you are thinking. Running this fund and also what you sort of bring to the table when you begin these conversations with both funders and founders. 

[00:15:48] Isabelle: Yeah. In terms of how we evaluate, I’m trying to think where to start. . So let’s start 

[00:15:54] Katie: first with Yeah.

Talk about how your project management systems, design systems, architecture, product experience has influenced how you. Are shaping this fund? What sits behind the philosophies of it? 

[00:16:07] Isabelle: Oh man. It really shapes, it shapes everything. 

[00:16:09] Victoria: It shapes from, it’s like how we can do this.

Cause we’re like, how do you make this basically into launching a product is basically what we’ve 

[00:16:15] Isabelle: done. Yeah. So we, I mean it’s really, it’s so ingrained into our approach how we communicate and work together. So from that interpersonal level, how we set our weeks, how we set our targets. We have a con bond board.

Yeah. We really, we really live and breathe the product process because, So ingrained in us it’s how we approach our working style and the fund. When it comes to looking at investments, we really take a look at the problem statement. And it’s interesting because it’s, it sounds so much simpler than it is but we look for founders who have a clear problem statement. For example, a lot of. Sometimes people had this idea in college of a company they wanted to start, but they haven’t done that work. They try and retrofit a problem to a solution versus, I have deep domain expertise on this, not just maybe I’ve experienced it, but you’ve either had a career in the industry and seen an opportunity. We’ve talked to a founder who is a cybersecurity product that she’s launching and she spent 20 years being a consultant in the industry. So she has deep domain expertise that enables her to really like, have an edge in that space. Another thing too is what we call product sense. It’s, and this is all in addition to the normal, checklist of things that you’ll find on Google, but product sense is really that willingness to test, to experiment, to learn. And to iterate. So not being married to the solution, especially at the early stages in preseason and seed.

The probability of your solution changing is extremely high. You don’t have product markets. You’re not iterating Exactly. You’re iterating constantly. And so there is a really big difference between what would be more of a fixed mindset and not being able to like, , make those changes, keep pace, stay ahead.

Like all of those are signals for us in terms of the propensity for success that founder and the team will have. As the founder, you’re leading, you’re the leader. So if you’re not embodying that, that trickles down too to, to whoever you have, no matter the talent. That’s where culture comes in.

. And that’s not something that we index a lot on, but we have a, I have tons of experience on behavioral interviews and user research and cognitive psychology, and that is an angle that really comes in to how we’re evaluating. The companies that we look at. Yeah. 

[00:18:47] Victoria: I think also really shapes how we are as GPS and our flexibility.

So some feedback we got recently is like that. We take feedback really well, which is for us, we’re like, okay, doesn’t everyone, but no, because as like people who’ve worked as operators and built over 20 products between us, we’re used to, and I, my first job was in gaming, so I’m very used to negative feedback, and I’m just like, people sometimes have anger issues and like sometimes people emote when it’s actually has nothing to do with you, but we don’t take it personally.

We know that growth is the most important. That’s a big thing that United says is this growth of mindset and , you don’t sit around and wait to try something. You do the best you can. You have places to learn and get feedback, and you get better each and every time. Whether that be conversations with LPs or how we run our like due diligence process with founders, we’re constantly feeling like we’re gonna try this thing, have measurements of success and get better.

, and that’s what we look for. Founders when we talk about product sense, like we had a company that was actually pretty interesting, but when we talked to them, they had a be of a hundred users and they’ve only had a hundred users for a couple months now and they hadn’t grown. Of their user base.

And for us, that was a really big concern because we need founders that like, it’s fine to start like we we only invest. You start somewhere. Yeah. We invest in, we only invest in companies, have some type of traction, which, another interesting conversation we had with a potential lp. They were really, if you’re going after women of color, couldn’t having attraction requirement be a barrier to entry?

And like first of off, Isabelle was like, no, cause we have excellent founders, . But two there the idea of I think people think of it as like more formalized and but what we’re looking for is like maybe you had a hundred users two months ago, but when we talked to you again and like now you should be at 300.

We need to see like growth and your ability to move fast, your ability to take information and make actual changes. That’s what we really look for in founders because that’s all we know, that builds are great products. We know that the skills you’re gonna need in order to make the successful long term.

And that’s like how we operate too. I 

[00:20:35] Isabelle: think too, at the core, it’s transparency and vulnerability. We’re evaluating a founder on a relationship that we’ll have for a month. And that’s something that we look for in LPs too. There’s a lot of parallels between those dynamics. But we had a company, for example, that did a intro call with us, and when they talked about their long-term vision, I had concerns about the direction they wanted to go in because they would then be moving into direct competition with very established market.

, they came onto the call the next time and proactively said, Hey, I thought about. This actually isn’t where we want to go. This would position us better, and this is why we think that. So we expect things to change. But if you can’t come to us and have those conversations and have a low ego about us asking questions and being curious about your thought process around there.

That was incredibly good signal for us that if something is wrong, that founder will talk to us. We do a lot to try and create a very safe space for those types of conversations. But they have to happen, so for us to be able to experience that, because it’s not just, you don’t really just have one shot like Victoria said, talk to you again in three weeks, what’s the change there? And we’re taking note of all of that. And so it’s really the culmination of what that experience has been in getting to know the founders as well. That gives a lot of signal. 

[00:21:52] Victoria: It strikes me 

[00:21:53] Katie: that, and I am speaking about this a little more from the outside, looking in as a non, in, in the sort of insider experience of venture capital.

but in an industry which is famed for kind of investing in founders who just are driven by an intense singular self-belief, or, the kind of culture personality that drags an entire billion dollar investment behind them, or, as long as you, as long as you can stay with confidence, it’s half the battle and you’ve only got the one chance.

I feel like all the things you are saying. Firstly seem eminently intuitive and sensible, but also a kind of counter to that, like over glamorized Silicon Valley investor kind of cliche that has probably been perpetuated for the last couple, like decade or so. And to back to your point, it is about, transparency, vulnerability, it’s about self-awareness and it’s about.

Probably not that singular ego. It’s about the openness to Yeah. Be able to build a story and take input , which seems really sensible as a thing to 

[00:23:04] Isabelle: judge a founder against. 

[00:23:05] Victoria: I think that’s interesting and like having the background that we have, like I did consulting for a number of years at Fortune 50 companies doing new products.

The oils like super small companies doing it, and no one really likes change. So part of it, like the culture that evolved and everyone’s even if they don’t like it, sometimes this is what we do, right? It’s too hard to change. , so have empathy for that. But you like, it’s funny.

So. No venture for a while has been growth at all costs. Then this year’s recession hit and now a lot of gps are asking companies to really be actually focused on profit and actually really have a good runway and not just burn cash and to grow at all cost. And I was having a conversation with an investor relations person at a crypto company and he was trying to get an understanding of the market from my perspective, and he was like, how are you thinking about.

As a gp and like how are your portfolio companies or founders you’re talking to thinking about this switch from like rapid growth at all costs to like now actually having to be profitable. And I was like, honestly, women of color have never really had the luxury of just assuming they’ll get millions of dollars in burning money.

So they already prepped for this. Like they’re already building profitable companies and they have this mindset, right? But we aren’t all cost investors, so it’s great for us. And he was just like, oh, okay. That’s nice . It’s great. We are in, I think, a position that’s reflecting the changes that are happening in the market and in the culture of like vc, whether it’s push or pull.

. But what I think is like very like kind of the driving force for us is really staying true to the things that we see in the market. Even in finding the data supporter, even though some of that we know is like still like signal rather than a definitive, this is happening. But like I think a big thing for us that we always have to think through is really continue to have the conviction and the confidence to be a little different.

 And be OK with that. And know that just because everyone else is doing it that way. Like we don’t have to do it that way, but like it’s something we struggle with. There’s 

[00:24:57] Isabelle: another element too, where it’s, we’ve spent most of our careers working for CEOs. Thinking that they can pull off the growth at all costs and not really being able to, and so that’s just not.

It’s, you’ve 

[00:25:09] Katie: seen the future of Clay . 

[00:25:11] Isabelle: Yeah. And it, again, it ties back to that culture piece where like you’re building teams that will churn through people that want to burn them out, and those companies don’t succeed 

[00:25:20] Victoria: in the first, they succeed 

[00:25:21] Isabelle: temporarily. Temporarily. Yeah. And the propensity for success though, long term starts to diminish and For us, an ulterior motive is really like investing in companies that we believe will be creating a tech ecosystem that we wanted to work in the last 15 years, and so that’s, that’s very core to how we approach this as well.

And it’s really creating a, hopefully a fundamental change, even if it’s on a small scale for. Sustainability really of a company, of a product, of success, of revenue and profit. So that’s definitely central to how we approach things. 

[00:25:58] Katie: I think that makes so much sense. You mentioned earlier on the concept of building for the next billion customers, and I think the flip side of that is on, is what you’re talking about here, which is like building for the employees and the people that are gonna.

Live and breathe and be your brand. Yeah. Like the writing is on the wall at this point, about what the next generation of like developers or engineers or marketing people even wanna be working on . Exactly. Let alone on the other side what we wanna buy and what digital environments we wanna work, wanna experience, and what apps we wanna have on our devices and all the rest of, it’s super interesting.

[00:26:35] Victoria: Yeah. Something too that’s interesting is, I think what’s cool about being people who are operators, not even just like founders return VCs are great, but like at they, it’s still different than being like an employee at a VC bag company. Even like leadership position. Like it’s still a different relationship.

 Last year I was talking to uh, established VC and I was talking about the shift. It was like early in the whole great resignation conversation that. Largely got misguided. But the key thing was like people are no longer willing to work in environments. Where it’s the CEO’s ego. at all costs and not whether or not this makes sense of their business or whether or not it turns to employees, whether or not they actually fulfill their diversity like ideals or they just say things and don’t do it. Like all those things are no longer applicable. Like the new and even existing integration of tech workers is no longer working that environment.

And I was talking to this guy about it. I was like, I think culture’s really important and we’re missing something. He was like, he’s I don’t know. I’ve seen a lot of assholes make money. And for me it became really clear. Most GP. Sit far away from the pain. It’s like a really big thing, go where the pain is.

Like it’s where you find your customers. Like G like most gps don’t have to have that. If you’ve come from a finance background, if you’ve come from another vc, you haven’t really worked in these companies and you’re just getting filtered reports based off program meetings your founders are saying.

But we’ve been in those companies and we know it’s like, sure, you might be okay today. But in a year, if you’re burning through employees, if this is like your fourth c t o, this is your third head of product in a year, eventually the IT is gonna hit the fan and this company’s going down. We have that perspective, so we know it’s like, sure asshole have previously made money.

But I don’t think that’s true for the future and we’re not willing to take that risk. It’s like your 

[00:28:16] Katie: understanding rather than the very binary oh, this company really fell when they hit scale. They weren’t able to scale. You. You have a little bit more of the operator’s understanding of Yeah.

What the myriad reasons that point of scale. Was the dropoff and was not a success story. Yes. It’s so interesting. So I, you talked a little bit like, I do think for those that you know our listeners on the podcast side of things, we have a lot of, early stage founders startup and scale up.

Enterprises, and I think it was so interesting to hear you talk about, coming in with product sense, understanding like the true lots and bolts of what it is that you’re building. Openness to input, willingness to adapt evidence of traction, even if it’s just small hints of it in the early stages, there’s an ability to show growth and adaptability, and then obviously transparency.

With all that in mind, and knowing that you are not yet, fully yet in investing as a fund, but I know you ladies are already starting to personally explore potential investments. Yeah. Who’s on your radar? Who are good examples of brands that might be, or companies that, that are playing into that or checking boxes on that front?

[00:29:25] Victoria: So I guess I’ll talk about companies That like maybe a little later in stages. That might be interesting. . So there’s a company that we met we do weekly office hours where we do 15 minutes of pre-product and design advice for any founder.

It’s usually like founders within our thesis, but We get men sometimes, and they’re cool. We help them still. And but this woman came, she just closed her sea route. This company called Brna, and it’s actually a gaming company that allows for people to make their own games, is like an educational process.

And what was really impressive about them, like one, my first job as in gaming. I’ve seen how great the mechanics of gaming can monetize products. And what I’m really interested in, and this is something we’re exploring more about, talking about in terms of we call them investment use cases, is about how gaming can be app like applied.

Two different industries outside of gaming and not just oh my God, 

[00:30:14] Katie: I feel that there’s so much 

[00:30:15] Victoria: connectivity , but but there’s something where it’s like gaming to help with, like education or actually the first company we invested in together is actually a platform called really where they really brought a gaming approach to that early, expect.

Mom to like early childhood where people could guess the gender baby and make bets on it. Which like greatly increased the monetization of people because when you add the idea of I get to win something now, people will spend more money. And so I’m really interested in that kind of approach.

And I think for us, when we think about companies that we’re invested in, we always look for some people who are taking a different type of approach to the same problem set. Cause of the day. There’s a limited amount of problem sets that are venture backable because there’s a lot of problems, but do they scale to being a possible billion dollar company?

Most not. And so there’s a limited set, but like where we think we’ll find like Alpha, especially with our better women of color, is really around a different perspective and applying different ways to solve those same problems in a way that actually works for the majority of customers and not everyone else having to like retrofit into what some white dude in San Francisco.

I love that. I 

[00:31:18] Katie: think it also, it’s so on brand as well to be thinking it through about it through the lens. Different perspectives and I’ve always been fascinated by how much innovation comes from bringing two seemingly wildly disparate ideas into one place. , and you’re speaking to that I feel like a kind of a founding story where you’ve got two people coming from like wildly different backgrounds or mashup of concepts is often such a fascinating place to 

[00:31:47] Victoria: start.

That’s definitely like both of our backgrounds, it’s like we both had upbringings where it was just all about really different perspectives, which like we both have found so valuable in how we approach like the world and our careers. But I also think what really drives like the innovation that we wanna see and real opportunity that like, For actually building like sustainable, but like financially viable returnable for us as a venture fund companies where I think before that narrative wasn’t present.

What’s cool is don’t think we’re the only fund with the narrative like that but we’re still like a unique place because that’s not the majority culture. And so what’s been cool for us is really finding other fund managers, whether they be emerging fund managers or more established who really are.

There are other ways at the bare minimum to do this, but most likely, probably better ways to do it. And it’s like, how can we this, how can we change like the fund model, like there’s people thinking about what’s called like a redeemable warrant so that companies aren’t just giving large equity chunks away forever.

Like it’s like a buyback 

[00:32:49] Isabelle: method. Yeah. They can buy back a lot of alternatives to traditional vc. Fun 

[00:32:53] Victoria: modeling. Yeah. That we find really cool. We’re not doing it because we’re like our expertise on the product lesson finance. We hiring for that , like we have gotten parts maybe fun too. Yeah. Yeah. But like we have like right now to like completely reimagine the funding model.

Yes. Like our 20, he has 20 years of financial expertise that is guiding like what we are great at and like we’re giving like the cultural and like long term context and vision to really make that financial. Amazing. But with his finance background, not us pretending like we’re gonna get that 20 years somehow.

But what? But what I think is like super interesting is like really what are those different approaches? And I think for us, we’re approaching it by really focusing on the type of founders we think are gonna create those unicorn companies. And what are the different company like types, like what are the opportunities in the market?

Not necessarily a specific industry, but like we talked about gaming and we’ve talked about infrastructure as well as a straight up nerd. So am I dunno why I called you out first. It made me feel a little bit better.

Cool. Nowadays 

[00:33:57] Isabelle: my like, I’m such. Deep domain expertise on SMBs and enterprise customers and clients. From my background. And so yeah, I have like this secret hope that we’re the go-to fund for like women of color building B2B companies. Yeah. In the 

[00:34:12] Victoria: industry. , like the cybersecurity company she was talking about is a black woman.

There’s another company that we’re really excited about that’s in. the s the specialty healthcare space and they’re basically platform to centralize payments and payment and like payment plans and quotes in that industry, which is like a very long industry. There’s tons of different, like specialty healthcare, but like this platform will bring them all in a centralized place.

Also a black woman what is cool and like what we’ve talked about a lot is. We’re getting, and something we talked about with the kind of pipeline issue people see is I think sometimes people think women of color are building like ancillary companies. Like it’s only beauty or it’s only like hair care.

It’s only whatever. But it’s like black women are building cybersecurity companies, black people are building financial tech companies like Latinx women are building like. Like community talent, marketplaces, like they’re building all of these same types of they’re all in all of these industries, but their perspectives tend to be a lot more interesting in how they approach that problem.

And they tend to actually have a more like profitability mindset. Unfortunately because like most times they know they’re not gonna get the funding cause they’re in the frugal innovation business. Yeah. But that means they’re solving real problems more and more. And that means that they are really set up for success when they do get to scale.

And we can help de-risk that for us, that we would de-risk in any situation. But like our bed is take our skills and de-risk and focus on the type of founders that we think are gonna create the most profitable companies in the next decade or so. 

[00:35:38] Katie: Exciting time. So much potential to come.

I have two questions for you and I know we’re a little over time, but I’m gonna, I’m gonna do them both. So with all this in mind, we’ve talked a bit about. This huge opportunity area of women of color talked about the idea of b2b, like startups, like the less expected space.

We’ve talked about new funding models and the idea of bringing in really fresh new perspectives to change the face of even how you define problems. If you, if what you are doing succeeds what and hopefully others follow. What is the future of investment and the kind of the startup. And scale up mix look like if you succeed in the next 10 years, where do you hope that we will 

[00:36:22] Isabelle: be?

[00:36:23] Victoria: thinking out loud, a big thing for us both is like fundamental change. I think people talk a lot about Change. People want change but don’t wanna do anything differently. And a big tenant for us is you actually want change.

We have to do things differently. And so for us, it would be not only that things are done differently, but it’s not just like everyone starts doing things like our way, it’s that everyone starts, there’s space. There’s space to explore different options. And so like you still might have traditional Venture in terms of invested a bunch of companies.

Only one or two will make it and like we have an expertise in this industry and that’s what we focus on at different stages, but there to be more like product led companies for their two or product led funds for people to have more options. For funding. Another thing we’ve been thinking about just adding on is like a lot of things are being funded, like they’re tech companies when they’re not.

And so a big instance of that is like rework that people know about, like it is at the core and how it was making money, a real estate play, but it’s being funded like it was a scalable B2B play, which it is not. And you’re seeing that a lot as like tecos 10 multiple industries, like even like community we have a big beef on because if you’re gonna do community really well, it takes four to five years to really build that community and understand what it is.

And scaling 

[00:37:30] Isabelle: community is different. Scaling. 

[00:37:32] Katie: Oh my gosh. This is 

[00:37:34] Isabelle: a lot. 

[00:37:35] Victoria: Yeah. And but you end up having those big. Let’s say mishaps, that have happened because you’re funding something. You’re trying to force this financial model into a business model that doesn’t fit for . And so I think there’s more options.

There’s less like pigeonhole forcing, even if it’s just like funding options and maybe it doesn’t directly fall under vc, but it’s just like making all the funding options more accessible. That would be great. We talk about being really tactical partners with our founders.

And so that means doing things like office hours. That means doing things like we don’t do the product work for them but it’s like helping them think through, okay, you wanna do this mvp? You’re saying it’ll take six months. This happened with our, what one of our invest. , they wanted to do an MVP of like the new like platform that they’re building.

And when we first initially talking, she was talking about, she’s oh, it’ll take three to six months. And we’re people who have built MVPs in a month. And were like, okay, is it gonna take that long? What are you trying to do? And we reorient it back to their problem statements.

Okay, what is it you’re trying to solve in this mvp? What are other solutions and ways you might do it? And as we talked through it, she’s like, oh, actually, if we do the solution, it’ll take us about a month and really solve that problem and we don’t have to do all this other stuff. And I was like, We didn’t touch a thing

All we did was have the conversation of pushing. But she has enough of a background and focus on what her problem statement is and who our customer is to have that productive conversation. Another 

[00:38:50] Isabelle: thing, long term in the industry, I’d love to just see there be more openness for funds to start that are a little different.

We can help create a little more flexibility in the industry with people seeing a lot more variance and approach to vc. I think that would be a very exciting shift. Not that it all changes, but that it opens a little bit. For differences and approach. And then also, something we’ve talked about and what ties back to how people to refer to women of color and pipeline and them not being there is that I don’t think VC is.

Has been an accessible option for women of color a lot, or they just don’t know that they could get venture backed or the people that would back them have a lot of bias. And so also just creating a lot more space. And we talk a lot about building ecosystems, so not only of founders and founders that we can connect together or to other funds, but also an ecosystem of other funds that.

Just creating and building out these connections where there is more of a space for founders to navigate even within our community. 

[00:40:01] Victoria: It’s.

[00:40:06] Katie: Vc more entrepreneurial in and of itself. Yeah. To reflect that which it in which it invests is almost how I see what you’re describing. Oh yeah. 

[00:40:14] Victoria: That’s a really good point cuz it, something else that I was thinking about too is even just getting started, something that’s really frustrated me there’s been a longer history of people trying to focus in diverse founders. And by diverse, like non-white and male founders from very specific schools. , but like, there’s now a push to do that on the fund managers side with the idea that it’ll almost trickle down into the founders.

But what’s interesting is like, the way historically build a fund is really by having access to wealth. And so most people like you get your first check, just like a founder. It’s really hard to get your first check. As a vc, it’s really hard to get your first check without it being just like, Oh, I know a CEO who exited, or like my family office, or like I know people who have a couple hundred thousand dollars to a couple million dollars who I can get together to go, then go to institutions like fund the funds or family offices where I don’t know, and say like, well, somebody’s invested in me.

Now you can just follow on because most LPs, like most gps, are reluctant to be the first check. But the problem is if you’re actually looking to diversify, The industry, you can’t operate that you have to actually make changes to the system, in order to facilitate new people coming in. And so what’s happening now I think is it’s still hard because like even if you’re getting more black and brown fund managers of all genders and getting more like white women fund manager.

They’re still patterning the money. They’re

are still based off like what’s already happened. So you end up getting like the diverse form of the same personality. Like they still probably background, they’re just like look different, which is. Can still push things forward, right? But what really push things forward is not just like they look different, but they also have different backgrounds.

There’s different points of entry. Like you’re not held to this, like especially wealth access, like given what’s, yeah, America, historically it’s really hard if you don’t break that up. Oh is such a 

[00:42:05] Katie: fascinating conversation. I feel like I need a follow up just chat, which isn’t

[00:42:14] Victoria: so somebody.

[00:42:19] Katie: What does 2023 look like? Seriously getting into business what are you most excited about? What’s your hot take on what 23 will be for? For Seed to Harvest Ventures in the spirit of Gary . 

[00:42:33] Isabelle: It’s a poignant question.

We’re doing strategy for 2023 last week. This week. Next week. Yeah. But I think it’s really taking the signal that we’ve gotten this year. We’ve. Piloted founder events. We have established office hours. We’ve been hitting the conference circuit as speakers and really just building out our communities.

And so I think it’s just taking that, what we’ve talked a lot about is keep doing what we’re doing. I feel really the more intentional yes, but more intentional. We learned a lot this year and now we’re able to take like. What was valuable that we did? What do we wanna repeat? What can be deprioritized?

It’s also just nice, like this is, we’re a year in, our first pitch deck was in January of 2022, and so amazing. It’s nice just knowing like we have a year under our belt. And so next year I think it’s just taking in, being more intentional, being reflective, and seeing what we’ve learned, where we do need to grow, and then where can we push on a little more.

I’m excited to shift from fundraising into working with founders more full-time. We’ve started doing a few deals already and. Just love the process. Yeah, so it’s getting to potentially, hopefully like transition once we close the fund, transition into that full-time for a little bit and do what we love to 

[00:43:53] Victoria: do.

Yeah, and I think too, like specifics so we pilot it to founder events this year. Again, we’re focused on like tactical help. So we basically took our 15 minute sessions and turned to like 45 minute sessions and tried that on Oakland LA met some amazing founder. Connected with other amazing gps and we’re looking to do that in more cities next year.

And so we have about six to seven cities. We’re talking to GPS in those cities. Cause we never wanna just like. In places we don’t know and making sure we really build in that ecosystem there, which is really great. We love like the, like honestly the other fund managers that have been with us specifically, what other women fund managers have just been like the backbone.

What I’m like, what’s we’re doing and like. How do you talk to LPs again? And I’m like, I think I fucked up. And like I’m like, sending voice notes and then people are like, you’re fine. I was also crying on the floor yesterday. But everything’s fine now. Like we have these people to like work with.

And so it’s like, how do we cultivate that community more? How do we like, make sure we focus on the community? So we joined a couple different communities. Like I’m in Republic’s VP program, one of this awesome collective dreams of Jewish. We learned about this climate opportunity like. Really where the communities that we’ve found success in and not just like business outcome success, but like growth and personal success.

Cuz we’re basically constantly growing. Now that we’re doing this. And so I think for next year, like I’m really excited to take what we learn and turn into specifics, whether it’s like how we approach our due diligence process and making that like more airtight. Also like really making things our own, like we talked about this idea of doing, like the use case we talked about.

Cause we’re so focused in women of color, we didn’t wanna narrow ourselves with saying we only do FinTech our marketplaces or whatever. And that’s what people are used to. Because it’s like we’re, you’re a FinTech learner. These three or four industries or common things like future of work, but those didn’t feel authentic to us. But now they’re like, okay, we can turn into use cases, which is a very product 

[00:45:37] Isabelle: thing we just articulated a little better. Instead of doing what is like the perceived right thing to do, right as you build this, 

[00:45:46] Victoria: we’re like now starting to figure out how to translate how we think to how people traditionally think and meet in the middle, but context, which is really cool.

Cause I think before we were just like, I don’t know, like

[00:46:03] Katie: It sounds like a, you’ve had a 10 months of like growth and excitement and a really interesting thesis and also a really clear sense of how you are distinct as a fund and also in terms of your focus.

And that next year has a awesome potential as you start to think more. Working with founders, so hopefully we can revisit and talk more about some of the like active founders and companies that you’re working with in maybe a year’s time. Hear what happens going into four. Great.

But it’s wonderful speaking to you both. 

[00:46:34] Isabelle: Thanks. It’s been great.

[00:46:45] Katie: Thanks for joining us for Building While Flying today. I hope you learned as much as we did. We’ll meet you right back here next time for another flight.