August 27, 2025 • 55 mins
In this episode, Joel Palathinkal chats with Sarah Leners about her venture capital journey at Bull City Venture Partners. They explore Bull City's investment strategy, deal sourcing, and managing differing opinions in deal flow. Sarah offers advice for first-time fundraisers, discusses tools for sourcing deals, and shares insights on venture capital recruiting. They also talk about empowering female investors and translating banking skills to VC. The episode wraps up with reflections on regional valuation differences, building connections, and optimizing collaboration time, along with audience questions on startup cash flow structuring.
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We don't, you know, have any mandates withboard seats, or control or anything like that.
(00:06):
And we like to work really hard for ourcompanies, whether that means, introducing them
to customers, introducing them to capital,later stage capital
Mhmm.
If there's a round coming up that is too bigfor us to leave.
And also helping make introductions to talentas they grow and scale.
(00:31):
We also like to invest in repeat founders orfounders who have a deep industry knowledge or
expertise.
Welcome to The Investor, a podcast where I,Joel Palafinkel, your host, dives deep into the
minds of the world's most influentialinstitutional investors.
In each episode, we sit down with an investorto hear about their journeys and how global
(00:54):
markets are driving capital allocation.
So join us on this journey as we explore theseinsights.
(01:18):
All right.
Looks like we're live here on the SuttonCapital web show.
So we've got Sarah Lenners from Bull CityVenture Capital.
Really excited to have you here.
It's Bull City Venture Partners to be correct,right?
That's right.
Yep.
Yeah.
So excited to have you here.
And, you know, just thanks for giving us yourtime.
(01:40):
You know, excited to learn a little more aboutyour background.
And where where are you calling from?
Where where are you guys located?
We're based in Durham, North Carolina.
Oh, nice.
That's not too far away.
I'm in New York.
So, you you have to have you have you guysgotten out of North Carolina recently?
Are you guys just
not recently, but excited to.
(02:01):
Yeah, we we've done like a couple small trips,like a couple hours away, but haven't done
anything too crazy.
But anyways, hey, thanks for joining again.
And we'd love to learn a little more about yourbackground, how you got started.
The audience here is a bunch of emergingmanagers.
We've got people who are trying to break intoVC.
(02:22):
Have some entrepreneurs.
So pretty diverse group of people.
But all just interested in both private equityand VC and learning a little more about your
journey.
So maybe you can just kick it off with whereyou grew up if it was in North Carolina.
What was your story?
How did you navigate into Yeah,
sure.
Actually, I grew up in Iowa.
(02:43):
I went to Dartmouth where I ran track and wasan econ major.
Fast forward a few years, went to businessschool at the University of Chicago Booth, went
into investment banking, first in New York,working in the real estate, gaming, lodging and
leisure group at Deutsche Bank.
(03:03):
And then I switched to Lazard Middle Market inChicago, where I did sell side m and a for
consumer food and retail companies.
And then a year ago switched into venturecapital.
What, where in Iowa did you grow up?
DeWitt.
DeWitt.
(03:24):
Okay, so I, my first job out of college was inCedar Rapids.
I don't know
if that's Oh your yeah.
Yeah, I have family there.
So where, how far away is that from like IowaCity and Cedar Rapids?
Probably like an hour, hour and a half.
Okay, that's not bad.
Yeah, so my first job out of college was atRockwell Collins.
(03:44):
So was like an aviation company.
So I lived in Iowa City and then I commuted toCedar Rapids.
We had a good time there.
Oh, wow.
And then, so then you went to, and then youwanted to kind of get out of Iowa and see the
rest of the world pretty much, right?
Yeah.
You know, had the opportunity, to run track atDartmouth.
(04:05):
That was a big dream of mine.
So, yeah, headed headed out east.
That's great.
Yeah.
So I've I actually spoke with, we got Kevin onthe line here.
Kevin, you know, is also thinking aboutpursuing that same track, you know, with
banking and, you know, he wants to kind ofstart with investment banking and then maybe
try to get some experience there and thentransition into venture.
(04:27):
Do you see that model and that path changingnow?
Or do you think that's still a good path?
And do you think that's still about the samewhere people are trying to maybe start as an
investment banker?
Or do you see venture, that career evolvingmore where people are coming from a tech
background or a product background and nowjumping in?
(04:48):
Yeah.
Hi, Kevin.
I would say if your dream is to get intoventure capital, try to go right in if you can.
I loved investment banking and I learned a ton.
Those finance skills are helpful, but, youknow, valuation and stuff, you know, finance in
general and the venture end of the spectrum isvery different Mhmm.
(05:11):
Than what I was doing in banking.
So I would say and and, you know, you see alldifferent paths, you know, former former
founders, former operators, there are manypaths that can lead here.
And if it's what you wanna do and you can getin directly, I would go for it.
Yeah.
(05:31):
Know that's good advice because there's somepeople that take their career as stepping
stones.
So like, Hey, eventually want to get intoventure.
That's what I really want to do, but I thinkI'm going to go to business school first and
then do banking.
So your advice is, if that's really what youwant to do, don't burn two to three years, just
go into what you want to do.
(05:52):
Morgan Yeah.
Yep.
Brad Was that your case?
Did you always want to be a venture capitalistand you thought about banking as the pathway
into it?
Or did you just kind of stumble upon banking?
I mean, stumble upon venture when you weregetting into banking?
Guess, what was your pivoting?
What were your career aspirations and then whattriggered that pivot?
(06:12):
I actually always wanted to get into banking.
Okay, got it.
That's a little unusual, but I more exposed toventure capital when I was in business school
after I'd already started going down thebanking path.
And I didn't really know anyone in theindustry.
I didn't really know how to get in.
You know, there isn't a very formal, you know,recruiting path in like there is for banking.
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So I didn't know much about it, but I wasreally interested in it.
And I took classes in entrepreneurship.
But, yeah, I didn't I didn't know as much aboutit, learn more later.
And then, you know, feel really lucky that Iwas able to get in.
Yeah, I was in college, when I grew up in, Igrew up in Florida, right?
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So I didn't even know about venture.
I knew nothing about When I thought aboutbanking, thought about like Bank of America,
like down the street, like a teller.
And I don't know if you ever watched TheOffice.
Have you seen that episode?
So there's an episode where Michael Scott goesto New York City from Philly.
(07:22):
And one of his buddies is like, Hey, whenyou're at the bar, just tell people that you're
a banker.
So he goes around and then I guess somebodyasked him at the bar, like what he does.
And he's like, Oh yeah, I'm a teller.
And that was me.
Like when I was in high school, I thoughtreally banking was going and making a deposit
at the bank.
But I went to New York one time and met a bunchof friends and they told me about investment
(07:46):
banking and that's how I discovered it.
So I guess like your banking was like myengineering, because I just thought that's all
it was.
But how did you discover Venture?
Did you start going to tech events?
Did you just meet people that were VCs?
Well, when I was working on a sell side deal inbanking, we were selling a company for a
(08:09):
founder.
And that was the first time I'd ever done asale where the founder was still involved with
a company.
And that really opened my eyes to it.
It's so much different when the founders, youknow, was still involved and, you know, the
business was her baby and she knew it insideand out.
And there's a different feel and, you know,energy about it.
(08:30):
And I wanted to be more involved in that, youknow, spectrum of finance.
No, that's really interesting.
And then tell me about, Bull City VenturePartners.
Was that the first fund that you joined?
Or is this, is this an emerging fund?
Maybe you can tell us about, you know, thejourney into Bull City and, and, maybe, you
know, how your career has transitioned?
(08:51):
So I actually found out about this positionthrough a recruiter.
Okay.
Yep.
And I think over the course of a month or so ofsix interviews, I was able to get get a get a
job here.
Sure.
So Bull City Venture Partners is a seed andseries a investor.
(09:13):
We're generally investing post revenue, postproduct, investing in software, Internet,
mobile tech tech companies.
We tend to focus on the Southeast and MidAtlantic just because that's in our backyard,
but we can invest anywhere in The US.
We are investing out of our fourth fund.
We've made two investments out of there.
(09:34):
We can lead, we don't have to lead, we can bethe first institutional capital in.
We don't have any mandates with board seats orcontrol or anything like that.
And we like to work really hard for ourcompanies, whether that means introducing them
to customers, introducing them to capital,later stage capital.
(09:58):
If there's a round coming up that is too bigfor us to leave.
And also helping make introductions to talentas they grow and scale.
We also like to invest in repeat founders orfounders who have a deep industry knowledge or
expertise.
You know, some of our founders we invested inin Fund two, they had a very successful exit
(10:23):
and now we're investing in them again.
And, know, so we're we're kind of backing thejockey versus the horse.
And because of that, that can kind of pull usfrom our core thesis a little bit.
And our portfolio is a little more concentratedthan we see on the West Coast.
(10:43):
So we're not making a bunch of tiny investmentshoping that one, know, becomes a unicorn and
subsidizes the rest of the portfolio.
It's more more concentrated and we're investingat a slower pace.
So, you know, two to four investments a yearversus deploying it all upfront.
(11:04):
And then our check sizes can range from,depending on the stage, 300,000 to 500,000 up
to 3,000,000.
And then when we make that first investment, weintend to have two to three times that saved up
in reserves for our winners.
That's really interesting.
And is there a certain sector that you'reinterested in or maybe excited about more than
(11:29):
the others?
I do consider myself a generalist.
I'm same actually really interested in FinTech.
I never saw that coming, but I like to see alittle bit of everything.
Yeah, I think we chat about this.
I have a fintech background as an operator.
So, do have a passion on fintech.
And fintech, if you just say fintech, it's somassive.
(11:53):
There's so many different sub sectors offintech.
Is there a sub sector that you think needsinnovation?
Oh, I think there's innovation and disruptioneverywhere.
Yeah.
And I think because we're kind of close toCharlotte, there's a lot of great companies
that are emerging there.
But I don't have like a specific sub sectorthat I'm like, in particular looking at, it's
(12:18):
not like a macro thesis and I'm trying to findsomething that fits that.
Sure.
Yeah.
And any advice that you have for the audienceon just sourcing because you guys make around
four investments.
So it seems like you guys probably look at alot of volume and I'm assuming there's high
selection criteria because there's only fourdeals that end up making it.
(12:39):
General, are there any best practices to finddeals inbound and outbound?
And then what are some best practices to screenthem and eliminate them to leave the best
quality companies?
Mhmm.
So I've only been investing in a COVID worldwhere it's all virtual.
So I don't know what it's like in normal time.
Sure.
(13:02):
So, yes, you're right.
Just we see a ton of deals, and they come from,you know, I will I'll attend virtual demo days,
pitch contests, and and see a lot of deal flowthat way.
Mhmm.
Networking with your entrepreneurs, networkingwith other VCs.
(13:25):
You know, I frequently have calls with otherVCs in other geographies that may see something
great, but it's not a fit for their portfolio,and then they'll pass it to me and vice versa.
And then just being involved in a bunch of VCgroups.
You know, there's a a group that I'm in, womenin VC.
I think there's about 3,000 members.
(13:46):
Oh, wow.
Yeah.
And they and you know, members are frequentlyposting, you know, seed stage opportunities,
series a opportunities, and and beyond.
So I think just trying to get out there andnetwork as much as you can is how I've been
sourcing on the outbound side.
Yeah, I totally agree.
(14:06):
I think some of the best deals that have been afit for us, I mean, for me, I've been through
text message.
So just texting, a friend of mine that's a VCand learning about it.
And it's literally like a doc send that you cantext to somebody.
So that's really true.
I feel like definitely the network and justconnections have really helped.
(14:26):
And I use Crunchbase sometimes, but I feel thatagain, the best ones have been through just
hearing some of the context through friends andreading their memos too.
That's really helpful.
What are some things that you think areimportant in a founder?
When you look at the founder, you mentionedthat there are past, it's obviously great if
(14:50):
they're a serial founder and they've had anexit or something in the past, but what are
some characteristics that you've seen that havebeen a common characteristic in a lot of the
deals that you've been excited about?
Yeah, I think having some cycles under theirbelt definitely helps, especially when COVID
hit and there was a lot of uncertainty.
(15:11):
And just having that muscle memory, I think wasvery beneficial.
And then just you know, having passion fortheir business, know, hiring the right talent,
having a great idea that is in a market, youknow, that's large enough for the opportunity
(15:33):
to be enormously successful.
But that's hard.
It's a lot of intangible, hard to pinpoint.
Yeah.
And I've heard feedback on being a gut basedinvestor.
So it's kind of tough.
Because half of I met a VC before that waslike, Look, I never do gut based investing.
And it's kind of tough to say that when you'rein VC because there's not really much data,
(15:56):
right?
Mean, there's barely the income statement andyou're not even sure they put it together
themselves or they have an outsourced CFO.
So it's as good as the numbers that theyprovide.
So, I mean, I hate to say that it's based offof gut, but I I'd say maybe some conviction and
just really believing in the sector.
(16:17):
But would you agree that you only know ifyou're right, probably like seven years from
now, right?
Yeah.
I mean, be honest, I mean, you're really onlygonna know when you do your reconciliation of
your performance.
Yeah, and you also don't know if you're wronguntil many years later too.
If you missed one.
Yeah, and I think, that's why I think it's goodthat there's these communities.
(16:40):
Even with my platform, there's been deals thatI've been excited about.
And then there's been some of the people inthis room that have really just pointed out a
lot of risks.
And I think just maybe not being swayed, maybeyou can tell me about this.
So how do you navigate just different opinionsand then still stick to your own, right?
(17:00):
Because you might really have conviction in adeal, but then a lot of people pass on the
deal.
So how do you synthesize that?
Do you let that manipulate your decision or doyou still just try to look at it objectively
and not get really swayed in one direction?
That's a really tough question.
(17:22):
I think, you know, because we're a team ofthree, everyone has different opinions and But
voices if there is a consensus, that's greatright off the bat.
Yeah.
But I think that there is something to be saidabout being swayed because, you know, we'll
hear, you know, XYZ company just got a termsheet from someone else and then that kind of
(17:43):
Yeah, that's true.
It's the FOMO pretty much, right?
You hear that they didn't seem attractive untilsomebody else that's bigger courted them and
now they're immediately like your hottest deal,right?
Exactly.
I think part of it too, what I try to do is,obviously, I have my opinion, but I try to
embrace being called out and being told thatI'm wrong because this is kind of like agree
(18:10):
with it or not, but Bridgewater has a lot ofdifferent attributes and they have a lot and
they're known for different attributes, but oneof them is just being able to radically be
transparent on like what they believe.
So I think that would be interesting in ventureif you could look at a deal and maybe you have
an ego and you really believe in the company,but there's tons of flaws in that company and a
(18:35):
lot of people are pointing that out.
I think uncovering that might help you changeyour opinion.
But I think a lot of times like you have somuch conviction, because you just believe in
the founder, you're emotionally invested, whereyou still wanna I feel like there's examples
like with Airbnb, where everybody thoughtAirbnb was just a stupid idea.
(18:55):
But there were some people that still no matterwhat, they still have conviction and those
people are right.
I think like synthesize for me, it's likesynthesizing all the data, right?
So I've got a bunch of people that don't agreewith investing and then there's a bunch of
people that do and maybe looking at like whythey don't agree with you and synthesizing that
could maybe sway me a little bit, I think.
(19:16):
So, yeah, totally agree.
And then what are some artifacts that you thinkare helpful when you're analyzing deals?
So probably deck, the term sheet, thefinancials.
I mean, I'm assuming in the beginning, it'sreally just some high level notes on the sector
and the deal.
I guess maybe you can walk me through the bestpractices just for the audience on just deal
(19:40):
flow management and you know, the the thesourcing all the way down to the actual
execution of of like writing the check.
Yeah.
It it is it can be challenging juggle thing.
And especially, you know, we were raising afund, we also had, you know, fundraising Yeah.
(20:01):
Thrown
Yeah.
So you're so you're involved in you're involvedin some of the fundraising of Fund four as
well.
Okay.
Mhmm.
Yeah.
That was launched, shortly after
I joined.
That's great.
Yeah, we can talk about that too because Ithink one of the things that I'm doing too is
an emerging manager program.
So there's a lot of people that are just goingthrough raising the fund.
(20:24):
I wanna touch on the previous one that you'retalking about which is really juggling.
Because one thing I wanna say is, one day I'mat
the
bank making three wires.
And then right after I have a first call with afounder.
And then right after that, there's aninvestment committee.
So, I feel like there's the full stack of likeall the stages and you're like managing all of
(20:47):
those at the same time but I feel like ifyou're doing that with fundraising, I mean,
that's just I feel like fundraising just needsto be a dedicated like full time job.
You know, don't know if you want, you know, ifyou read like Elizabeth Yen's blog on how she
raised 11,000,000 but it was, I think she tooklike almost like 700 meetings in a couple
months and it was really like being a salesrep.
(21:09):
You're like you're like a sales rep prettymuch.
You know, you're building a pipeline and whatwhat I thought was really interesting.
So I I listened to her podcast on VentureUnlocked with Samir Kaji.
And,
she was just saying there's no correlation withthere's no, like, pattern at all with the with
the LPs that converted.
Like, was just saying, it was just more of, anumbers game where she met tons of LPs and some
(21:31):
LPs committed for no specific reason.
So it really is kind of, like, maybe like asales strategy because if you're prospecting
leads as a sales rep, let's say you work for anenterprise company, right?
You're targeting like a certain type of sectorindustry.
She was just saying like it's the same thing.
So Wow.
And
when you did the fundraising, I guess, youinvolved in it or were you you just kinda
(21:55):
coming in at the tail end?
I was involved and and even with, you know, thethe formation docs and stuff like that.
Oh, wow.
Okay.
Yeah.
But I will say there's a track record.
So that helps.
That helps a lot.
And just leveraging your prior investors.
(22:18):
So especially I think for a first time fund,first time funds, think it was challenging to
raise in COVID.
That's what I've heard.
Yeah.
But yeah, we were fortunate to have priorrelationships.
Yeah, and I think it's great to show thosereally great wins on your deck when you got the
track record.
So it's good, especially when you're raisingmore institutional rounds.
(22:41):
Do you have any buddies that are on their firsttime fund?
And if so, any words of wisdom that they haveas far as like raising their fund?
I don't know anyone firsthand who's doing that.
Do see in some of the groups that I'm involvedwith.
I think there's a lot of resources out therefor people who are raising their first round.
(23:06):
But I think that's really neat when people aredoing that on their own.
Yeah.
I think it's great when you have thecommunities that you're in.
I think a lot of those people are sharingknowledge, they're sharing resources.
I think I saw on Twitter, was thinking aboutputting this together myself.
So if you're doing an SPV, normally there'slike a typical email that you send out.
(23:27):
The email has like, hey, this is when thedeadline is to do your commitment, this is your
wire.
So I thought about just taking that and turningthat into like a resource or something because
I thought that would be helpful.
Oh, yeah.
Do you think there's any resources that youthink, could be helpful for you that that maybe
(23:48):
you've been looking for on the Internet?
As it relates to sourcing deals?
Yeah, maybe sourcing deals or just anything inventure.
Was just curious.
We're always looking for new deals for sure.
Yeah.
So more on the sourcing.
That's one.
Yeah.
(24:08):
Yeah.
As far as sourcing, are there any tools thatyou recommend for sourcing besides like
Crunchbase and PitchBook or connecting withother friends?
So I haven't used any of the databases.
Yeah.
But I know a lot of people do.
(24:30):
I think basically everyone else I know doesgenerally use those.
Yeah.
And And also just, you know, the acceleratorsand incubators.
Yeah.
Just, you know, seeing what's there.
You know, because we also like to invest afterwe've met somebody a few times, you know, not
after the the first meeting.
So it's good to develop the relationship, youknow, early on.
(24:58):
Yeah.
I guess any sourcing tips?
Always great.
Great to have those.
Yeah, no, I think you hit it on the head.
I mean, really just connecting with thenetworks and collecting just thoughts across
the community.
I think all of that is really helpful.
I guess maybe I'll open it up to the group ifanybody has any questions and feel free to
(25:19):
chime in.
If any of you guys have questions, if not, I'mjust going to call on you guys.
No, I'm just kidding.
Miss Sarah, how are you?
Good.
How are you?
Hi, Kevin.
I'm great.
I'm great.
Thank you so much for asking about me.
I'm a first year MBA scholar studying atFlorida A and M University.
Thank you for speaking to us this afternoon.
I wanted to ask specifically, you're a seniorassociate for Bull City Venture Partners.
(25:45):
I was curious to know how that firm got on yourradar in terms of your selection of venture
firms and kind of how you selected them?
Did they find you?
Kind of if you could tell that and share thatstory with us.
Sure.
So I actually found out about it through arecruiter who was helping them find candidates.
(26:10):
So it was actually through a third party.
And I don't think that is as common, but I knowthere's blogs out there that will aggregate or
aggregate postings like again in the blog.
So there are ways.
(26:30):
It was a recruiter for the fund?
Mhmm.
Okay.
Okay.
Yep.
Yeah.
It's a good point.
That's, you
know, I was getting too much into the weeds oflike process and sourcing and I think a good
topic is really recruiting.
That's a good point because I think recruitersnormally you don't really work with recruiters
or placement agents for funds.
(26:50):
I would say also it's just most of the fundsare not, those positions that are available.
They usually don't always publicly advertisethem.
Found some weird off the radar roles justthrough my LinkedIn feed because I've
disconnected with so many VCs.
So sometimes they'll just post on theirLinkedIn feed that we're hiring.
But people have told me they would have neverknown about it on LinkedIn or in Indeed.
(27:16):
So, I think you were a fortunate case.
But any advice maybe through the communitiesthat you're in with the other VCs, what have
they been saying as far as how they broke in?
Any tips that they've given you or that you'veheard through the community?
Let's see.
Generally, they're generally, I think it'sthrough networking.
(27:38):
Yeah.
I just posted a link, which which does have abunch of openings where you can find positions.
And I think that's updated pretty regularly.
But I think it does generally take a while.
And I think if a fund if you know that a fundis raising a new fund, then there's a chance
(27:59):
that they're bringing more people on board.
But I think it is, you know, just trying tonetwork.
And, you know, unfortunately, I wish I had abetter answer.
Yeah, I think, you know, I think maybe re likeyou said, reaching out, what do you think you
should say to a VC?
Like, what would you what would you recommendnot to say?
(28:19):
And then what what should you say?
So let's say that Kevin cold messages, maybemaybe a VC, you know, what what should he not
say and, you know, maybe what are some goodthings to maybe call out?
Yeah.
I think the way I I usually get inbounds isthrough LinkedIn.
Uh-huh.
And, you know, some usually a student willreach out to me.
(28:42):
Yeah.
And
they'll say, you know, hi, Sarah.
You know, I'm interested in a career in venturecapital.
Do you have ten or fifteen minutes to talk tome your path in?
And then leave your email address and maybesome availability.
That's generally how I get inbounds.
I do try to respond.
(29:03):
You can take them.
Yeah.
Yeah, I think that's a good attitude to have.
I try to take as many as I can too.
And I think what I thought is a pretty slicktrick too is sometimes if you, I'm a power user
of Calendly.
So I'll like, I'll send somebody and a thenI'll give them the Calendly and I'll be like,
hey, if you're interested in chatting, click onit.
(29:25):
And I usually just try to do like a fifteenminute meeting.
But I think to add to that, maybe one thingthat I would say is maybe a little bit too.
It's like, hey, Sarah, know that you're focusedon, I know that you love FinTech.
Here's, I think they maybe take it one stepfurther.
Here's like a really cool FinTech deal.
Did you hear about it?
Oh, yeah.
Would love to chat about it if you got fifteenminutes.
(29:47):
And by the way, I got a memo that I wrote so Ican go through it with you.
I feel like that would be tempting for you toclick on the Calendly and book time because
that would probably help you do your job well,right?
Mean, if you found a really good FinTech dealand then that person attributed to it, maybe
that's someone that you would maybe recommend,I assume.
That's a great idea.
I haven't seen that.
It would definitely stand out.
(30:09):
Yeah, I think that one's good.
Sometimes you can do like a deck.
So like a high level presentation on aninvestment sector.
So, I think even if it wasn't a specific deal,because I think sometimes the challenge is if
you're not a VC, founders won't take a callfrom you to pitch you because you're just some
random student.
(30:29):
No offense to the students in here.
But the founders may just not think that you'regonna write a check, right?
So they may not wanna take a call.
So I think one thing that tell me if this wouldbe helpful, Sarah, like if they wrote some high
level thesis on FinTech, it's like, hey, we'vegot FinTech.
And then this is how I decompose FinTech.
We've got like the future of payments.
We've got the banking two point zero.
(30:54):
We've got decentralized finance.
And then we've got NFTs and all that stuff.
So I feel like, do you think that would behelpful to some type of like high level macro
report on a certain sector?
Yeah, that's interesting.
It would definitely stand out.
But I wouldn't try to fake it.
And that might be hard to do if you'retargeting a lot of VCs.
(31:20):
Interesting.
And as far as faking it, mean just make surethat you do a good job doing some really
detailed analysis on the sector.
And I think either way, even if it doesn't workout, even if you don't convert on the meeting,
I think just going through that exercise is areally good one because you're just learning so
much about the sector.
(31:40):
And I think I would highly recommend anybody tojust do multiple different sectors like maybe
one on whatever you're excited about.
It could be the future of food.
It could be B2B SaaS, it could be quantum.
I think if you could, the more you can tailorit, I think it would be a better probably
higher conversion rate with the person thatyou're trying to engage with.
(32:03):
So cool.
Good question.
Any other questions guys?
I have another question, no one else.
I don't want to hog all the time.
Yeah, go ahead.
Sarah, in your interview process with the fundthat you're currently a senior associate with,
(32:26):
are they expecting you to come with your ownideas or maybe specialization of a specific
sector or industry?
I think it depends on the fund.
If they are very sector focused, I would sayhave a viewpoint.
But so my interview process, was six interviewsover, you know, I think a month and a half or
(32:53):
so.
Mhmm.
And it very wide ranging, less technical thanwhat you'd see in like a banking interview.
But just, you know, I I think universally justhave have an answer to why do you wanna work
here?
Why do you wanna work in venture capital?
(33:13):
And yes, having some type of, thesis,investment thesis is great.
Awesome.
Thank you so much, Sarah.
I'm actually based in The UK, and I've got aI've banking experience.
(33:35):
I'm just about to pop up to pick up mydaughter, but I've got this question.
I was excited about what you said, with regardsto joining this group of women in venture.
And as you said it, I got on telegram and I waslooking for groups of that nature, right?
And I found it's, I think it's in Arabic, butit's a very interesting way to just plug in,
(34:01):
I'm going to start adopting that.
But what I've got is a question from thefinancial space right, so we've identified that
female managers actually produce a lot morestable returns than most of the men or the male
managers, and I just wondered which especiallywhen you mentioned oh yeah this group about
(34:23):
women in venture, just wondered do you see atendency for female entrepreneurs to have
certain attributes that their male counterpartsmay not have?
Is that always that but is there somethingpotentially there that hasn't been discovered
yet?
Just to throw that out there.
Okay, just to make sure I heard the questionright.
(34:45):
The question is, are female investors seeingsomething different in the companies that
they're looking at?
One, and two, is that the same for the femaleentrepreneurs and business owners?
Okay.
(35:05):
So this is also tougher for me, because we'regenerally investing in software companies.
Mhmm.
So I think that the mix is a little more skewedtowards male founders anyway.
But I think if you're in a different sector,you're probably seeing a lot more female
founders.
I don't see a ton.
(35:27):
Sure.
This is a tough one.
I'm not sure, I do feel like when femalefounders are reaching out to my firm, feel like
I'm getting a lot of those inbounds.
So that's my best answer.
(35:47):
I'm not sure how to quantify that.
I think it's interesting because there was apoint where I was exploring managers that were
creating fund of funds purely with women fundmanagers, and they apparently their returns
were actually a lot better than fund of fundswith male fund managers, And obviously, this is
(36:10):
public, the public markets.
And they said about just the temperament of thefemale managers selections.
And during the volatile markets, they actuallymaintain better alpha.
Mhmm.
So I do wanna there's something there, youknow, something to be explored.
So thank you.
Thank you for trying at least.
(36:31):
Yeah.
Yeah.
Mean, I think there's a huge initiative.
I was just gonna say, I was thinking aboutHarlem Capital.
They just went on this week in startups acouple, I think last week and their mandate is
focusing on diversity, but they also focus onwomen.
But the women that they invest in don't have tobe under a diversity.
It's just women of any race, but then they'rereally focusing mainly on African American and
(36:55):
Latinx.
So I just thought that was really interestingand it's great that they have a lot of these
initiatives and just having networks like womenin BC, think just kinda getting different
groups together, whether it's based on genderor sexual orientation, there's Gainjoles as
well.
So I don't know if you guys been hearing aboutGainjoles.
Gainjoles is an LGBTQ angel group and they havea massive track record of deals.
(37:22):
They've been just writing a lot of checks veryfrequently, but that community has been really
coming together to generate alpha.
So I think no matter what group you come from,as long as you're part of a community and
you're collecting thoughts together, I thinkyou can really generate alpha because you're
building that platform together and supportingeach other.
So I think the more that they have thesethings, like Sarah said, she doesn't even have
(37:45):
to use the database because her database islike the collection of minds of the people that
she's working with.
I think that's great.
I love that concept of alpha inventor.
Just quantifying that it's something thatreally fascinates me.
I got another question.
So I know that you really wanted to get intobanking in the beginning.
(38:09):
What are some of the skill sets and tricks thatyou developed as a banker uniquely?
Because as we can probably both agree,everybody has a superpower, right?
So me, I was a product person.
So whenever I support founders, I like test theapp and give like UI feedback.
What are some of the superpowers that you thinka banker can bring into being a venture
(38:30):
capitalist?
Yeah.
I I think I really see it when it comes tomergers
Mhmm.
And and sell side processes.
Just, you know, being on the other side ofthat, and bringing that knowledge, has been
really, really helpful and helps me provideinsight when we're about to transact.
Yeah.
(38:50):
Because that's a big thing too.
Mean, in the early stage, you don't really knowwhat the next valuation is gonna be.
And if somebody was asking me the other day,oh, you know, how do you think about valuation?
And it's like, really, it's the lead investorthat sets the term.
So you're really just agreeing with thevaluation and then we normally co invest.
So we're pre seed to series A but we don'tnormally lead deals.
(39:10):
So we're really just kinda looking at the termsand then we co invest.
I think what you're saying is as a bankerlooking at the later stage, the M and A deals,
you're probably also doing some type of returnanalysis.
So thinking through like, hey, you know what,we're investing, the company is worth
10,000,000 now, it'll probably maybe two orthree X in valuation in a couple of years.
(39:34):
And you probably model that out kind of likeyou would have done in banking, right?
Yeah, yeah.
There is so much harder to pinpoint valuationsin the beginning.
Yeah, because there's no data, right?
So you're kind of making up all the data.
You're assuming that they'll be making five xin revenue in two years, right?
Yeah, the best way that I can describe it isthat it's just like a supply and demand kind of
(39:59):
inaction and a number gets assigned based onthat versus based on, you know, a quantitative
evaluation.
So yeah.
You probably rely on comps as well too, right?
So I mean, when you're looking at like sometype of investment that you invested in now,
I'm assuming you're probably looking at somecompany that exited.
(40:21):
There was a similar type of business for sometype of multiple.
Is that a good framework?
Are there any other best practices when you'retrying to evaluate how the exit would happen?
Yeah if it's near an exit yes definitelylooking at comps.
But I'll say valuations just these days are itis a lot higher than the normal at all stages.
(40:49):
Yeah, no, that's great.
And you know, got another one.
Do you see differences with valuation withdifferent states and how do you guys handle
that?
Because you guys are mainly focused you know,the the Northeast and the and the Southeast.
So, is there a certain type of valuation thatyou're that you're comfortable with?
Because obviously, it can be they can be muchmore expensive in, you know, San Francisco and
(41:12):
New York.
I mean, see differences between New York andJersey.
Right?
Yep.
So, are you guys pretty sensitive to that?
And, you know, when you're looking at thesedeals, is there kind of, you know, certain
threshold that you're looking for as far asvaluation?
We definitely were thinking about, you know,what kind of a multiple can we get over the
(41:34):
life of our investment.
We're definitely thinking about that at thebeginning.
Yeah.
But we don't have any certain ranges that we'retargeting for each stage.
But I do feel like valuations are high at anystage right now.
Yeah, and you don't have the data so you don'tknow how big the multiple is gonna be when they
(41:56):
get to their series A or B versus banking, likeyou could probably take some of the current
revenue and model that out,
Which is probably the
biggest difference.
Yeah and you know they're profitable companiesgenerally.
So know even at multiples, comps, DCF, allthat.
(42:16):
What are some other superpowers that you'veseen from other VCs, maybe from other
backgrounds that you thought were interesting?
So, you know, have you seen like somebody comefrom like a writing background that was a VC or
any of your friends in your women's VC group?
Have you seen anybody that just came from justa background from left field or are they mainly
all just the traditional banking route and thenVC?
(42:40):
You'll you know, you'll see some consultantstoo, prior consultants.
I think it can be it it really can be anything.
And if you're passionate about the industry,you know, your skill from whatever career you
had before will translate in some way at somepoint.
So there isn't one path.
(43:07):
I networking and hustling, I think that helpsby far.
Yeah, I think I truly believe anybody can be aventure capitalist.
It's such a relationship based business.
(43:27):
So as long as you're able to, I would say thekey skill sets are building a network.
I feel a lot of it is community and content.
So I'm trying to build some content here incommunity, but there's people that have been
doing it for a long time and half of the alphais really building that community and network.
And then I think Shayla here had a question.
(43:49):
I think this is a good one too.
So you get the deck, what are the maybe thefirst two or three things that you look at or
think about with the deck?
I think the my very first screens are that it,you know, is located in The US.
Mhmm.
Looking for, you know, post product revenue.
(44:12):
Those are my very, very first screens.
And then you wanna make sure, you know, thatthe market that it's going after is big enough.
Mhmm.
You know, looking at competitors, any moat thatthey have.
Yeah.
I think those are the team.
Yep.
Those are kind of the first screens.
Is there an ideal monthly revenue that you'relooking for or like ARR that you're looking for
(44:37):
or just general just at least showing that theyhave revenue?
Yeah, I would say just general.
Okay.
Is good.
So it could vary.
It doesn't have to be as specific.
And I mean, what I like to see is, from yearone to year two, just some step up in revenue
or some increase in value of the revenue aswell.
That way you can kinda Yep.
(44:58):
You can probably make some assumptions of thepotential valuation that would coincide with
the revenue step ups as well.
Right?
Mhmm.
Yeah.
Yeah.
And any KPIs, any user metrics, any data likethat is great.
Is it mostly B2B or do you guys also look atconsumer as well?
Mostly B2B.
(45:18):
Got it.
Yeah.
So the KPIs are pretty consistent because it'skind of a basic framework for and you guys may
for b to b, are there any specific KPIs thatwould be helpful for people to look at as
they're evaluating b to b startups that hasworked for you?
I think it's generally how the founder sees itand tracks it.
(45:43):
Because they're gonna know the best way to lookat it and analyze it.
So definitely relying on them when it's anindustry that I don't have, you know, a
specialty in.
Yeah.
It's a good point because different even thoughit's just b to b, you know, ARR is just a very
general metric, but they may be tracking thingsdifferently in their dashboard as far as like
(46:08):
maybe what's important to them.
I think what you're saying is like for somebusinesses, like average time spent in a B2B
SaaS platform, more important than somebodyelse that's that's just like paying for a
transaction or something or like using data.
Because I think there's really interesting.
So there's an interesting FinTech company thatI met in Singapore.
(46:28):
I mean, Singapore, in Israel.
And what they do is they can take So they buildcustom models for people.
And then if you wanna build more models, itjust automatically bills you.
But it's kinda more on demand versus thetypical financial terminal where you have to
like pay for like a Bloomberg and then likejust just pay for the terminal and you get
(46:50):
kinda limited sets.
But this company is a little more bespoke.
But like their metrics are really like how manycustom models were built and then the billing
gets scalable based on like how much processingthey're doing.
So I feel like those KPIs would be differentthan just like an annual subscription, right?
If you just pay for Salesforce and then you buya couple, like it's a Salesforce like CRM and
(47:15):
you buy the base system, which is like 15 andthen you just upgrade to a couple apps.
I feel like that's much more similar, but Ithink you're right.
Like thinking about how they analyze theirplatform and success of the platform, think is
really interesting.
Yeah, definitely.
Yeah, cool.
So we got about ten minutes, maybe we'll take acouple more questions.
(47:39):
Anything else guys?
I had one question.
Sure.
Hi, Sarah.
I'm also from The UK.
I did a similar sort of pre career path, soalso an economics graduate at Warwick and now
in banking.
And I found that when studying economics, get alot of the investment banks come to you and
they just sell this massive dream.
(47:59):
And then it pushes you towards sort of IB andalso your whole cohort is wanting to go in that
direction.
Yeah.
So that sort of fuelled my interest in IBpredominantly and I wasn't really, you don't
see a lot of VCs coming to pitch to sort ofeconomics grads.
And I know you mentioned in the beginningsomething about trying to go right into VC.
(48:24):
So how would you sort of say economics grads orpeople in that sort of space can get into it
when there's such an inflow of IBs?
And then the second point was around sort ofhow does your experience in banking compare to
now being in VC?
Obviously banking is a very differentenvironment to VC.
There's sort of crossover paths and you talkedabout how you're starting to build your network
(48:47):
but what I've seen in banking is that you kindof have to build your own internal network to
get recognised in banking itself.
So I'm guessing that helped you when it's cometo VC as well.
Yeah, great questions.
It's very different than banking.
The hours in banking can be pretty brutal.
Just never having a weekend off, working till03:30 per month and a half.
(49:13):
It definitely wears on you.
But I will say, you know, the skills that youlearn in banking, whether it's the finance and
the strategy, you know, you're you're creatingpitch decks for companies with potential, you
know, acquisitions targets, and you'redeveloping a sector expertise.
So that will always come in handy.
(49:35):
And then then, you know, your friends who wentinto banking, eventually, a lot of them will go
into corporate jobs.
So I have a lot of friends who are at companieswho could potentially help our portfolio of
companies, you know, by eventually becoming acustomer someday.
(49:57):
So being able to connect them is hugelybeneficial.
The cohort that I did banking with, I don'tthink anyone else went into VC.
Some went into private equity, corporate someor some the rest are still there.
Those are kind of the three three tracks.
(50:19):
But the skills that you develop and the networkthat you develop there, it still translates
into VC, you know, and and I think it'll bevery beneficial that you have had that.
Do you miss do you miss banking at all?
Besides the hours?
(50:39):
Do you miss the work?
Because
there's a lot of modeling, right?
A lot of quantitative stuff.
So sometimes you miss that stuff.
Yeah and then just the pace of it.
Yeah.
And I think it was also everything was inperson too.
Yeah.
So And I think the biggest dynamic with bankingtoo is you can kind of see results pretty
quickly, right?
You either do the transaction or you don't,right?
(51:02):
And you can see the waterfall once it happens.
So, that's interesting.
Yeah.
And I really appreciate your insights of someof those key skills and how they translated
into VC.
And I'll wrap up in a few minutes, I think onequestion that I always like to ask at the end
is any piece of advice that you've gotten froma mentor, looking back on your career or just
(51:24):
someone that you have shadowed, anythingprofound that they share with you that you
wanna share with us?
I think just building your network and alwaystrying to help when people reach out, pay it
forward because I think that always does comeback to benefit you.
(51:46):
So that would be my piece of advice, try tomeet as many people as you can,
network,
that will come in handy.
That's really a good point.
I mean, there's there's a friend of mine is mycousin's friend.
He works at Blackstone and you can imagine,right?
Everyone's trying to get a meeting with him.
And I asked him the same question and he waslike, look, just take meetings because you
(52:10):
never know where they'll lead.
Even if you don't get anything out of it.
Just take meetings because you never know thatperson may know a pastor that's like an LP.
Maybe that person knows a pastor that's relatedto an LP.
I think if you just kind of take meetings toget to know people and build connections
without expecting anything, think somehow theuniverse works out.
(52:32):
So good advice.
Appreciate it.
I love it though.
Yeah, I agree.
And I try to do the same thing as much as Ican.
And I think you can probably try to optimizeyour time with time boxes.
So Calendly is a good thing to do.
You could even block off what I thought wasreally good.
I think they said this in Radical Habits,blocking off a time in your calendar or your
(52:55):
week for collaboration time.
And that's the set day and time box whereyou're saying, Hey, you know what?
This is the time where I can meet new people.
And when it fills up, they can just kind ofgrab the next week, but at least you have that
time allocated.
So that was something I picked up.
But this is great.
So anybody else have any final questions?
If not, we'll wrap up let Sarah get back towhat she's working on.
(53:20):
Yes, guess last question, Sarah.
Being that I'm an amateur novice in the venturespace.
I wanted to know in terms of venture capitalwith an early stage startup and early fund, is
there a way to if the business is producingrevenue, is there a way to contractually
(53:43):
structure or is this commonplace tocontractually structure cash flow until you
make the official exit, let's say seven yearsout to reduce the basis that you originally
invested in the company and to ultimatelyincrease your overall rate of return.
(54:04):
Is that actually done?
So you mean like, are you saying like That'shold the you're company talking about.
Yeah, are you saying like hold the companyWell, are you saying that holding the company
accountable to generate revenue?
No, not hold the company accountable togenerate revenue.
Meaning that if the company is free cash flow,is in the free cash flow space, free cash flow
(54:26):
positive.
Where based upon whatever your stake is or yourshare size as a means of reducing your basis
until you actually exit your position.
Or is it just or is the return strictly basedon exiting your stake or your equity within the
company?
(54:47):
Yeah, it would be on the exit.
You're not going to but I think you're talkingabout are you going to take if they're free
cash flow positive, are you gonna takedividends?
You would want that cash to stay in thebusiness so the business can get that cash to
grow versus paying it out to investors.
I think that would be harmful to the company.
(55:08):
At the early stage, you do see that in privateequity.
They'll do a dividend recap.
But but yeah, not not in an early stagecompany.
Okay, that makes sense.
Thank you.
Cool.
Well, hey, Kevin, good question.
And Sarah, thanks so much for your time forpaying it forward, supporting the community and
(55:29):
excited to hopefully get together sometimewhenever you make it out to New York and I'll
give you a ring when I make it out there.
Yeah.
Thank you so much for having me and feel freeto reach out to anyone.
We don't, you know, have any mandates withboard seats, or control or anything like that.
(00:06):
And we like to work really hard for ourcompanies, whether that means, introducing them
to customers, introducing them to capital,later stage capital
Mhmm.
If there's a round coming up that is too bigfor us to leave.
And also helping make introductions to talentas they grow and scale.
(00:31):
We also like to invest in repeat founders orfounders who have a deep industry knowledge or
expertise.
Welcome to The Investor, a podcast where I,Joel Palafinkel, your host, dives deep into the
minds of the world's most influentialinstitutional investors.
In each episode, we sit down with an investorto hear about their journeys and how global
(00:54):
markets are driving capital allocation.
So join us on this journey as we explore theseinsights.
(01:18):
All right.
Looks like we're live here on the SuttonCapital web show.
So we've got Sarah Lenners from Bull CityVenture Capital.
Really excited to have you here.
It's Bull City Venture Partners to be correct,right?
That's right.
Yep.
Yeah.
So excited to have you here.
And, you know, just thanks for giving us yourtime.
(01:40):
You know, excited to learn a little more aboutyour background.
And where where are you calling from?
Where where are you guys located?
We're based in Durham, North Carolina.
Oh, nice.
That's not too far away.
I'm in New York.
So, you you have to have you have you guysgotten out of North Carolina recently?
Are you guys just
not recently, but excited to.
(02:01):
Yeah, we we've done like a couple small trips,like a couple hours away, but haven't done
anything too crazy.
But anyways, hey, thanks for joining again.
And we'd love to learn a little more about yourbackground, how you got started.
The audience here is a bunch of emergingmanagers.
We've got people who are trying to break intoVC.
(02:22):
Have some entrepreneurs.
So pretty diverse group of people.
But all just interested in both private equityand VC and learning a little more about your
journey.
So maybe you can just kick it off with whereyou grew up if it was in North Carolina.
What was your story?
How did you navigate into Yeah,
sure.
Actually, I grew up in Iowa.
(02:43):
I went to Dartmouth where I ran track and wasan econ major.
Fast forward a few years, went to businessschool at the University of Chicago Booth, went
into investment banking, first in New York,working in the real estate, gaming, lodging and
leisure group at Deutsche Bank.
(03:03):
And then I switched to Lazard Middle Market inChicago, where I did sell side m and a for
consumer food and retail companies.
And then a year ago switched into venturecapital.
What, where in Iowa did you grow up?
DeWitt.
DeWitt.
(03:24):
Okay, so I, my first job out of college was inCedar Rapids.
I don't know
if that's Oh your yeah.
Yeah, I have family there.
So where, how far away is that from like IowaCity and Cedar Rapids?
Probably like an hour, hour and a half.
Okay, that's not bad.
Yeah, so my first job out of college was atRockwell Collins.
(03:44):
So was like an aviation company.
So I lived in Iowa City and then I commuted toCedar Rapids.
We had a good time there.
Oh, wow.
And then, so then you went to, and then youwanted to kind of get out of Iowa and see the
rest of the world pretty much, right?
Yeah.
You know, had the opportunity, to run track atDartmouth.
(04:05):
That was a big dream of mine.
So, yeah, headed headed out east.
That's great.
Yeah.
So I've I actually spoke with, we got Kevin onthe line here.
Kevin, you know, is also thinking aboutpursuing that same track, you know, with
banking and, you know, he wants to kind ofstart with investment banking and then maybe
try to get some experience there and thentransition into venture.
(04:27):
Do you see that model and that path changingnow?
Or do you think that's still a good path?
And do you think that's still about the samewhere people are trying to maybe start as an
investment banker?
Or do you see venture, that career evolvingmore where people are coming from a tech
background or a product background and nowjumping in?
(04:48):
Yeah.
Hi, Kevin.
I would say if your dream is to get intoventure capital, try to go right in if you can.
I loved investment banking and I learned a ton.
Those finance skills are helpful, but, youknow, valuation and stuff, you know, finance in
general and the venture end of the spectrum isvery different Mhmm.
(05:11):
Than what I was doing in banking.
So I would say and and, you know, you see alldifferent paths, you know, former former
founders, former operators, there are manypaths that can lead here.
And if it's what you wanna do and you can getin directly, I would go for it.
Yeah.
(05:31):
Know that's good advice because there's somepeople that take their career as stepping
stones.
So like, Hey, eventually want to get intoventure.
That's what I really want to do, but I thinkI'm going to go to business school first and
then do banking.
So your advice is, if that's really what youwant to do, don't burn two to three years, just
go into what you want to do.
(05:52):
Morgan Yeah.
Yep.
Brad Was that your case?
Did you always want to be a venture capitalistand you thought about banking as the pathway
into it?
Or did you just kind of stumble upon banking?
I mean, stumble upon venture when you weregetting into banking?
Guess, what was your pivoting?
What were your career aspirations and then whattriggered that pivot?
(06:12):
I actually always wanted to get into banking.
Okay, got it.
That's a little unusual, but I more exposed toventure capital when I was in business school
after I'd already started going down thebanking path.
And I didn't really know anyone in theindustry.
I didn't really know how to get in.
You know, there isn't a very formal, you know,recruiting path in like there is for banking.
(06:38):
So I didn't know much about it, but I wasreally interested in it.
And I took classes in entrepreneurship.
But, yeah, I didn't I didn't know as much aboutit, learn more later.
And then, you know, feel really lucky that Iwas able to get in.
Yeah, I was in college, when I grew up in, Igrew up in Florida, right?
(07:01):
So I didn't even know about venture.
I knew nothing about When I thought aboutbanking, thought about like Bank of America,
like down the street, like a teller.
And I don't know if you ever watched TheOffice.
Have you seen that episode?
So there's an episode where Michael Scott goesto New York City from Philly.
(07:22):
And one of his buddies is like, Hey, whenyou're at the bar, just tell people that you're
a banker.
So he goes around and then I guess somebodyasked him at the bar, like what he does.
And he's like, Oh yeah, I'm a teller.
And that was me.
Like when I was in high school, I thoughtreally banking was going and making a deposit
at the bank.
But I went to New York one time and met a bunchof friends and they told me about investment
(07:46):
banking and that's how I discovered it.
So I guess like your banking was like myengineering, because I just thought that's all
it was.
But how did you discover Venture?
Did you start going to tech events?
Did you just meet people that were VCs?
Well, when I was working on a sell side deal inbanking, we were selling a company for a
(08:09):
founder.
And that was the first time I'd ever done asale where the founder was still involved with
a company.
And that really opened my eyes to it.
It's so much different when the founders, youknow, was still involved and, you know, the
business was her baby and she knew it insideand out.
And there's a different feel and, you know,energy about it.
(08:30):
And I wanted to be more involved in that, youknow, spectrum of finance.
No, that's really interesting.
And then tell me about, Bull City VenturePartners.
Was that the first fund that you joined?
Or is this, is this an emerging fund?
Maybe you can tell us about, you know, thejourney into Bull City and, and, maybe, you
know, how your career has transitioned?
(08:51):
So I actually found out about this positionthrough a recruiter.
Okay.
Yep.
And I think over the course of a month or so ofsix interviews, I was able to get get a get a
job here.
Sure.
So Bull City Venture Partners is a seed andseries a investor.
(09:13):
We're generally investing post revenue, postproduct, investing in software, Internet,
mobile tech tech companies.
We tend to focus on the Southeast and MidAtlantic just because that's in our backyard,
but we can invest anywhere in The US.
We are investing out of our fourth fund.
We've made two investments out of there.
(09:34):
We can lead, we don't have to lead, we can bethe first institutional capital in.
We don't have any mandates with board seats orcontrol or anything like that.
And we like to work really hard for ourcompanies, whether that means introducing them
to customers, introducing them to capital,later stage capital.
(09:58):
If there's a round coming up that is too bigfor us to leave.
And also helping make introductions to talentas they grow and scale.
We also like to invest in repeat founders orfounders who have a deep industry knowledge or
expertise.
You know, some of our founders we invested inin Fund two, they had a very successful exit
(10:23):
and now we're investing in them again.
And, know, so we're we're kind of backing thejockey versus the horse.
And because of that, that can kind of pull usfrom our core thesis a little bit.
And our portfolio is a little more concentratedthan we see on the West Coast.
(10:43):
So we're not making a bunch of tiny investmentshoping that one, know, becomes a unicorn and
subsidizes the rest of the portfolio.
It's more more concentrated and we're investingat a slower pace.
So, you know, two to four investments a yearversus deploying it all upfront.
(11:04):
And then our check sizes can range from,depending on the stage, 300,000 to 500,000 up
to 3,000,000.
And then when we make that first investment, weintend to have two to three times that saved up
in reserves for our winners.
That's really interesting.
And is there a certain sector that you'reinterested in or maybe excited about more than
(11:29):
the others?
I do consider myself a generalist.
I'm same actually really interested in FinTech.
I never saw that coming, but I like to see alittle bit of everything.
Yeah, I think we chat about this.
I have a fintech background as an operator.
So, do have a passion on fintech.
And fintech, if you just say fintech, it's somassive.
(11:53):
There's so many different sub sectors offintech.
Is there a sub sector that you think needsinnovation?
Oh, I think there's innovation and disruptioneverywhere.
Yeah.
And I think because we're kind of close toCharlotte, there's a lot of great companies
that are emerging there.
But I don't have like a specific sub sectorthat I'm like, in particular looking at, it's
(12:18):
not like a macro thesis and I'm trying to findsomething that fits that.
Sure.
Yeah.
And any advice that you have for the audienceon just sourcing because you guys make around
four investments.
So it seems like you guys probably look at alot of volume and I'm assuming there's high
selection criteria because there's only fourdeals that end up making it.
(12:39):
General, are there any best practices to finddeals inbound and outbound?
And then what are some best practices to screenthem and eliminate them to leave the best
quality companies?
Mhmm.
So I've only been investing in a COVID worldwhere it's all virtual.
So I don't know what it's like in normal time.
Sure.
(13:02):
So, yes, you're right.
Just we see a ton of deals, and they come from,you know, I will I'll attend virtual demo days,
pitch contests, and and see a lot of deal flowthat way.
Mhmm.
Networking with your entrepreneurs, networkingwith other VCs.
(13:25):
You know, I frequently have calls with otherVCs in other geographies that may see something
great, but it's not a fit for their portfolio,and then they'll pass it to me and vice versa.
And then just being involved in a bunch of VCgroups.
You know, there's a a group that I'm in, womenin VC.
I think there's about 3,000 members.
(13:46):
Oh, wow.
Yeah.
And they and you know, members are frequentlyposting, you know, seed stage opportunities,
series a opportunities, and and beyond.
So I think just trying to get out there andnetwork as much as you can is how I've been
sourcing on the outbound side.
Yeah, I totally agree.
(14:06):
I think some of the best deals that have been afit for us, I mean, for me, I've been through
text message.
So just texting, a friend of mine that's a VCand learning about it.
And it's literally like a doc send that you cantext to somebody.
So that's really true.
I feel like definitely the network and justconnections have really helped.
(14:26):
And I use Crunchbase sometimes, but I feel thatagain, the best ones have been through just
hearing some of the context through friends andreading their memos too.
That's really helpful.
What are some things that you think areimportant in a founder?
When you look at the founder, you mentionedthat there are past, it's obviously great if
(14:50):
they're a serial founder and they've had anexit or something in the past, but what are
some characteristics that you've seen that havebeen a common characteristic in a lot of the
deals that you've been excited about?
Yeah, I think having some cycles under theirbelt definitely helps, especially when COVID
hit and there was a lot of uncertainty.
(15:11):
And just having that muscle memory, I think wasvery beneficial.
And then just you know, having passion fortheir business, know, hiring the right talent,
having a great idea that is in a market, youknow, that's large enough for the opportunity
(15:33):
to be enormously successful.
But that's hard.
It's a lot of intangible, hard to pinpoint.
Yeah.
And I've heard feedback on being a gut basedinvestor.
So it's kind of tough.
Because half of I met a VC before that waslike, Look, I never do gut based investing.
And it's kind of tough to say that when you'rein VC because there's not really much data,
(15:56):
right?
Mean, there's barely the income statement andyou're not even sure they put it together
themselves or they have an outsourced CFO.
So it's as good as the numbers that theyprovide.
So, I mean, I hate to say that it's based offof gut, but I I'd say maybe some conviction and
just really believing in the sector.
(16:17):
But would you agree that you only know ifyou're right, probably like seven years from
now, right?
Yeah.
I mean, be honest, I mean, you're really onlygonna know when you do your reconciliation of
your performance.
Yeah, and you also don't know if you're wronguntil many years later too.
If you missed one.
Yeah, and I think, that's why I think it's goodthat there's these communities.
(16:40):
Even with my platform, there's been deals thatI've been excited about.
And then there's been some of the people inthis room that have really just pointed out a
lot of risks.
And I think just maybe not being swayed, maybeyou can tell me about this.
So how do you navigate just different opinionsand then still stick to your own, right?
(17:00):
Because you might really have conviction in adeal, but then a lot of people pass on the
deal.
So how do you synthesize that?
Do you let that manipulate your decision or doyou still just try to look at it objectively
and not get really swayed in one direction?
That's a really tough question.
(17:22):
I think, you know, because we're a team ofthree, everyone has different opinions and But
voices if there is a consensus, that's greatright off the bat.
Yeah.
But I think that there is something to be saidabout being swayed because, you know, we'll
hear, you know, XYZ company just got a termsheet from someone else and then that kind of
(17:43):
Yeah, that's true.
It's the FOMO pretty much, right?
You hear that they didn't seem attractive untilsomebody else that's bigger courted them and
now they're immediately like your hottest deal,right?
Exactly.
I think part of it too, what I try to do is,obviously, I have my opinion, but I try to
embrace being called out and being told thatI'm wrong because this is kind of like agree
(18:10):
with it or not, but Bridgewater has a lot ofdifferent attributes and they have a lot and
they're known for different attributes, but oneof them is just being able to radically be
transparent on like what they believe.
So I think that would be interesting in ventureif you could look at a deal and maybe you have
an ego and you really believe in the company,but there's tons of flaws in that company and a
(18:35):
lot of people are pointing that out.
I think uncovering that might help you changeyour opinion.
But I think a lot of times like you have somuch conviction, because you just believe in
the founder, you're emotionally invested, whereyou still wanna I feel like there's examples
like with Airbnb, where everybody thoughtAirbnb was just a stupid idea.
(18:55):
But there were some people that still no matterwhat, they still have conviction and those
people are right.
I think like synthesize for me, it's likesynthesizing all the data, right?
So I've got a bunch of people that don't agreewith investing and then there's a bunch of
people that do and maybe looking at like whythey don't agree with you and synthesizing that
could maybe sway me a little bit, I think.
(19:16):
So, yeah, totally agree.
And then what are some artifacts that you thinkare helpful when you're analyzing deals?
So probably deck, the term sheet, thefinancials.
I mean, I'm assuming in the beginning, it'sreally just some high level notes on the sector
and the deal.
I guess maybe you can walk me through the bestpractices just for the audience on just deal
(19:40):
flow management and you know, the the thesourcing all the way down to the actual
execution of of like writing the check.
Yeah.
It it is it can be challenging juggle thing.
And especially, you know, we were raising afund, we also had, you know, fundraising Yeah.
(20:01):
Thrown
Yeah.
So you're so you're involved in you're involvedin some of the fundraising of Fund four as
well.
Okay.
Mhmm.
Yeah.
That was launched, shortly after
I joined.
That's great.
Yeah, we can talk about that too because Ithink one of the things that I'm doing too is
an emerging manager program.
So there's a lot of people that are just goingthrough raising the fund.
(20:24):
I wanna touch on the previous one that you'retalking about which is really juggling.
Because one thing I wanna say is, one day I'mat
the
bank making three wires.
And then right after I have a first call with afounder.
And then right after that, there's aninvestment committee.
So, I feel like there's the full stack of likeall the stages and you're like managing all of
(20:47):
those at the same time but I feel like ifyou're doing that with fundraising, I mean,
that's just I feel like fundraising just needsto be a dedicated like full time job.
You know, don't know if you want, you know, ifyou read like Elizabeth Yen's blog on how she
raised 11,000,000 but it was, I think she tooklike almost like 700 meetings in a couple
months and it was really like being a salesrep.
(21:09):
You're like you're like a sales rep prettymuch.
You know, you're building a pipeline and whatwhat I thought was really interesting.
So I I listened to her podcast on VentureUnlocked with Samir Kaji.
And,
she was just saying there's no correlation withthere's no, like, pattern at all with the with
the LPs that converted.
Like, was just saying, it was just more of, anumbers game where she met tons of LPs and some
(21:31):
LPs committed for no specific reason.
So it really is kind of, like, maybe like asales strategy because if you're prospecting
leads as a sales rep, let's say you work for anenterprise company, right?
You're targeting like a certain type of sectorindustry.
She was just saying like it's the same thing.
So Wow.
And
when you did the fundraising, I guess, youinvolved in it or were you you just kinda
(21:55):
coming in at the tail end?
I was involved and and even with, you know, thethe formation docs and stuff like that.
Oh, wow.
Okay.
Yeah.
But I will say there's a track record.
So that helps.
That helps a lot.
And just leveraging your prior investors.
(22:18):
So especially I think for a first time fund,first time funds, think it was challenging to
raise in COVID.
That's what I've heard.
Yeah.
But yeah, we were fortunate to have priorrelationships.
Yeah, and I think it's great to show thosereally great wins on your deck when you got the
track record.
So it's good, especially when you're raisingmore institutional rounds.
(22:41):
Do you have any buddies that are on their firsttime fund?
And if so, any words of wisdom that they haveas far as like raising their fund?
I don't know anyone firsthand who's doing that.
Do see in some of the groups that I'm involvedwith.
I think there's a lot of resources out therefor people who are raising their first round.
(23:06):
But I think that's really neat when people aredoing that on their own.
Yeah.
I think it's great when you have thecommunities that you're in.
I think a lot of those people are sharingknowledge, they're sharing resources.
I think I saw on Twitter, was thinking aboutputting this together myself.
So if you're doing an SPV, normally there'slike a typical email that you send out.
(23:27):
The email has like, hey, this is when thedeadline is to do your commitment, this is your
wire.
So I thought about just taking that and turningthat into like a resource or something because
I thought that would be helpful.
Oh, yeah.
Do you think there's any resources that youthink, could be helpful for you that that maybe
(23:48):
you've been looking for on the Internet?
As it relates to sourcing deals?
Yeah, maybe sourcing deals or just anything inventure.
Was just curious.
We're always looking for new deals for sure.
Yeah.
So more on the sourcing.
That's one.
Yeah.
(24:08):
Yeah.
As far as sourcing, are there any tools thatyou recommend for sourcing besides like
Crunchbase and PitchBook or connecting withother friends?
So I haven't used any of the databases.
Yeah.
But I know a lot of people do.
(24:30):
I think basically everyone else I know doesgenerally use those.
Yeah.
And And also just, you know, the acceleratorsand incubators.
Yeah.
Just, you know, seeing what's there.
You know, because we also like to invest afterwe've met somebody a few times, you know, not
after the the first meeting.
So it's good to develop the relationship, youknow, early on.
(24:58):
Yeah.
I guess any sourcing tips?
Always great.
Great to have those.
Yeah, no, I think you hit it on the head.
I mean, really just connecting with thenetworks and collecting just thoughts across
the community.
I think all of that is really helpful.
I guess maybe I'll open it up to the group ifanybody has any questions and feel free to
(25:19):
chime in.
If any of you guys have questions, if not, I'mjust going to call on you guys.
No, I'm just kidding.
Miss Sarah, how are you?
Good.
How are you?
Hi, Kevin.
I'm great.
I'm great.
Thank you so much for asking about me.
I'm a first year MBA scholar studying atFlorida A and M University.
Thank you for speaking to us this afternoon.
I wanted to ask specifically, you're a seniorassociate for Bull City Venture Partners.
(25:45):
I was curious to know how that firm got on yourradar in terms of your selection of venture
firms and kind of how you selected them?
Did they find you?
Kind of if you could tell that and share thatstory with us.
Sure.
So I actually found out about it through arecruiter who was helping them find candidates.
(26:10):
So it was actually through a third party.
And I don't think that is as common, but I knowthere's blogs out there that will aggregate or
aggregate postings like again in the blog.
So there are ways.
(26:30):
It was a recruiter for the fund?
Mhmm.
Okay.
Okay.
Yep.
Yeah.
It's a good point.
That's, you
know, I was getting too much into the weeds oflike process and sourcing and I think a good
topic is really recruiting.
That's a good point because I think recruitersnormally you don't really work with recruiters
or placement agents for funds.
(26:50):
I would say also it's just most of the fundsare not, those positions that are available.
They usually don't always publicly advertisethem.
Found some weird off the radar roles justthrough my LinkedIn feed because I've
disconnected with so many VCs.
So sometimes they'll just post on theirLinkedIn feed that we're hiring.
But people have told me they would have neverknown about it on LinkedIn or in Indeed.
(27:16):
So, I think you were a fortunate case.
But any advice maybe through the communitiesthat you're in with the other VCs, what have
they been saying as far as how they broke in?
Any tips that they've given you or that you'veheard through the community?
Let's see.
Generally, they're generally, I think it'sthrough networking.
(27:38):
Yeah.
I just posted a link, which which does have abunch of openings where you can find positions.
And I think that's updated pretty regularly.
But I think it does generally take a while.
And I think if a fund if you know that a fundis raising a new fund, then there's a chance
(27:59):
that they're bringing more people on board.
But I think it is, you know, just trying tonetwork.
And, you know, unfortunately, I wish I had abetter answer.
Yeah, I think, you know, I think maybe re likeyou said, reaching out, what do you think you
should say to a VC?
Like, what would you what would you recommendnot to say?
(28:19):
And then what what should you say?
So let's say that Kevin cold messages, maybemaybe a VC, you know, what what should he not
say and, you know, maybe what are some goodthings to maybe call out?
Yeah.
I think the way I I usually get inbounds isthrough LinkedIn.
Uh-huh.
And, you know, some usually a student willreach out to me.
(28:42):
Yeah.
And
they'll say, you know, hi, Sarah.
You know, I'm interested in a career in venturecapital.
Do you have ten or fifteen minutes to talk tome your path in?
And then leave your email address and maybesome availability.
That's generally how I get inbounds.
I do try to respond.
(29:03):
You can take them.
Yeah.
Yeah, I think that's a good attitude to have.
I try to take as many as I can too.
And I think what I thought is a pretty slicktrick too is sometimes if you, I'm a power user
of Calendly.
So I'll like, I'll send somebody and a thenI'll give them the Calendly and I'll be like,
hey, if you're interested in chatting, click onit.
(29:25):
And I usually just try to do like a fifteenminute meeting.
But I think to add to that, maybe one thingthat I would say is maybe a little bit too.
It's like, hey, Sarah, know that you're focusedon, I know that you love FinTech.
Here's, I think they maybe take it one stepfurther.
Here's like a really cool FinTech deal.
Did you hear about it?
Oh, yeah.
Would love to chat about it if you got fifteenminutes.
(29:47):
And by the way, I got a memo that I wrote so Ican go through it with you.
I feel like that would be tempting for you toclick on the Calendly and book time because
that would probably help you do your job well,right?
Mean, if you found a really good FinTech dealand then that person attributed to it, maybe
that's someone that you would maybe recommend,I assume.
That's a great idea.
I haven't seen that.
It would definitely stand out.
(30:09):
Yeah, I think that one's good.
Sometimes you can do like a deck.
So like a high level presentation on aninvestment sector.
So, I think even if it wasn't a specific deal,because I think sometimes the challenge is if
you're not a VC, founders won't take a callfrom you to pitch you because you're just some
random student.
(30:29):
No offense to the students in here.
But the founders may just not think that you'regonna write a check, right?
So they may not wanna take a call.
So I think one thing that tell me if this wouldbe helpful, Sarah, like if they wrote some high
level thesis on FinTech, it's like, hey, we'vegot FinTech.
And then this is how I decompose FinTech.
We've got like the future of payments.
We've got the banking two point zero.
(30:54):
We've got decentralized finance.
And then we've got NFTs and all that stuff.
So I feel like, do you think that would behelpful to some type of like high level macro
report on a certain sector?
Yeah, that's interesting.
It would definitely stand out.
But I wouldn't try to fake it.
And that might be hard to do if you'retargeting a lot of VCs.
(31:20):
Interesting.
And as far as faking it, mean just make surethat you do a good job doing some really
detailed analysis on the sector.
And I think either way, even if it doesn't workout, even if you don't convert on the meeting,
I think just going through that exercise is areally good one because you're just learning so
much about the sector.
(31:40):
And I think I would highly recommend anybody tojust do multiple different sectors like maybe
one on whatever you're excited about.
It could be the future of food.
It could be B2B SaaS, it could be quantum.
I think if you could, the more you can tailorit, I think it would be a better probably
higher conversion rate with the person thatyou're trying to engage with.
(32:03):
So cool.
Good question.
Any other questions guys?
I have another question, no one else.
I don't want to hog all the time.
Yeah, go ahead.
Sarah, in your interview process with the fundthat you're currently a senior associate with,
(32:26):
are they expecting you to come with your ownideas or maybe specialization of a specific
sector or industry?
I think it depends on the fund.
If they are very sector focused, I would sayhave a viewpoint.
But so my interview process, was six interviewsover, you know, I think a month and a half or
(32:53):
so.
Mhmm.
And it very wide ranging, less technical thanwhat you'd see in like a banking interview.
But just, you know, I I think universally justhave have an answer to why do you wanna work
here?
Why do you wanna work in venture capital?
(33:13):
And yes, having some type of, thesis,investment thesis is great.
Awesome.
Thank you so much, Sarah.
I'm actually based in The UK, and I've got aI've banking experience.
(33:35):
I'm just about to pop up to pick up mydaughter, but I've got this question.
I was excited about what you said, with regardsto joining this group of women in venture.
And as you said it, I got on telegram and I waslooking for groups of that nature, right?
And I found it's, I think it's in Arabic, butit's a very interesting way to just plug in,
(34:01):
I'm going to start adopting that.
But what I've got is a question from thefinancial space right, so we've identified that
female managers actually produce a lot morestable returns than most of the men or the male
managers, and I just wondered which especiallywhen you mentioned oh yeah this group about
(34:23):
women in venture, just wondered do you see atendency for female entrepreneurs to have
certain attributes that their male counterpartsmay not have?
Is that always that but is there somethingpotentially there that hasn't been discovered
yet?
Just to throw that out there.
Okay, just to make sure I heard the questionright.
(34:45):
The question is, are female investors seeingsomething different in the companies that
they're looking at?
One, and two, is that the same for the femaleentrepreneurs and business owners?
Okay.
(35:05):
So this is also tougher for me, because we'regenerally investing in software companies.
Mhmm.
So I think that the mix is a little more skewedtowards male founders anyway.
But I think if you're in a different sector,you're probably seeing a lot more female
founders.
I don't see a ton.
(35:27):
Sure.
This is a tough one.
I'm not sure, I do feel like when femalefounders are reaching out to my firm, feel like
I'm getting a lot of those inbounds.
So that's my best answer.
(35:47):
I'm not sure how to quantify that.
I think it's interesting because there was apoint where I was exploring managers that were
creating fund of funds purely with women fundmanagers, and they apparently their returns
were actually a lot better than fund of fundswith male fund managers, And obviously, this is
(36:10):
public, the public markets.
And they said about just the temperament of thefemale managers selections.
And during the volatile markets, they actuallymaintain better alpha.
Mhmm.
So I do wanna there's something there, youknow, something to be explored.
So thank you.
Thank you for trying at least.
(36:31):
Yeah.
Yeah.
Mean, I think there's a huge initiative.
I was just gonna say, I was thinking aboutHarlem Capital.
They just went on this week in startups acouple, I think last week and their mandate is
focusing on diversity, but they also focus onwomen.
But the women that they invest in don't have tobe under a diversity.
It's just women of any race, but then they'rereally focusing mainly on African American and
(36:55):
Latinx.
So I just thought that was really interestingand it's great that they have a lot of these
initiatives and just having networks like womenin BC, think just kinda getting different
groups together, whether it's based on genderor sexual orientation, there's Gainjoles as
well.
So I don't know if you guys been hearing aboutGainjoles.
Gainjoles is an LGBTQ angel group and they havea massive track record of deals.
(37:22):
They've been just writing a lot of checks veryfrequently, but that community has been really
coming together to generate alpha.
So I think no matter what group you come from,as long as you're part of a community and
you're collecting thoughts together, I thinkyou can really generate alpha because you're
building that platform together and supportingeach other.
So I think the more that they have thesethings, like Sarah said, she doesn't even have
(37:45):
to use the database because her database islike the collection of minds of the people that
she's working with.
I think that's great.
I love that concept of alpha inventor.
Just quantifying that it's something thatreally fascinates me.
I got another question.
So I know that you really wanted to get intobanking in the beginning.
(38:09):
What are some of the skill sets and tricks thatyou developed as a banker uniquely?
Because as we can probably both agree,everybody has a superpower, right?
So me, I was a product person.
So whenever I support founders, I like test theapp and give like UI feedback.
What are some of the superpowers that you thinka banker can bring into being a venture
(38:30):
capitalist?
Yeah.
I I think I really see it when it comes tomergers
Mhmm.
And and sell side processes.
Just, you know, being on the other side ofthat, and bringing that knowledge, has been
really, really helpful and helps me provideinsight when we're about to transact.
Yeah.
(38:50):
Because that's a big thing too.
Mean, in the early stage, you don't really knowwhat the next valuation is gonna be.
And if somebody was asking me the other day,oh, you know, how do you think about valuation?
And it's like, really, it's the lead investorthat sets the term.
So you're really just agreeing with thevaluation and then we normally co invest.
So we're pre seed to series A but we don'tnormally lead deals.
(39:10):
So we're really just kinda looking at the termsand then we co invest.
I think what you're saying is as a bankerlooking at the later stage, the M and A deals,
you're probably also doing some type of returnanalysis.
So thinking through like, hey, you know what,we're investing, the company is worth
10,000,000 now, it'll probably maybe two orthree X in valuation in a couple of years.
(39:34):
And you probably model that out kind of likeyou would have done in banking, right?
Yeah, yeah.
There is so much harder to pinpoint valuationsin the beginning.
Yeah, because there's no data, right?
So you're kind of making up all the data.
You're assuming that they'll be making five xin revenue in two years, right?
Yeah, the best way that I can describe it isthat it's just like a supply and demand kind of
(39:59):
inaction and a number gets assigned based onthat versus based on, you know, a quantitative
evaluation.
So yeah.
You probably rely on comps as well too, right?
So I mean, when you're looking at like sometype of investment that you invested in now,
I'm assuming you're probably looking at somecompany that exited.
(40:21):
There was a similar type of business for sometype of multiple.
Is that a good framework?
Are there any other best practices when you'retrying to evaluate how the exit would happen?
Yeah if it's near an exit yes definitelylooking at comps.
But I'll say valuations just these days are itis a lot higher than the normal at all stages.
(40:49):
Yeah, no, that's great.
And you know, got another one.
Do you see differences with valuation withdifferent states and how do you guys handle
that?
Because you guys are mainly focused you know,the the Northeast and the and the Southeast.
So, is there a certain type of valuation thatyou're that you're comfortable with?
Because obviously, it can be they can be muchmore expensive in, you know, San Francisco and
(41:12):
New York.
I mean, see differences between New York andJersey.
Right?
Yep.
So, are you guys pretty sensitive to that?
And, you know, when you're looking at thesedeals, is there kind of, you know, certain
threshold that you're looking for as far asvaluation?
We definitely were thinking about, you know,what kind of a multiple can we get over the
(41:34):
life of our investment.
We're definitely thinking about that at thebeginning.
Yeah.
But we don't have any certain ranges that we'retargeting for each stage.
But I do feel like valuations are high at anystage right now.
Yeah, and you don't have the data so you don'tknow how big the multiple is gonna be when they
(41:56):
get to their series A or B versus banking, likeyou could probably take some of the current
revenue and model that out,
Which is probably the
biggest difference.
Yeah and you know they're profitable companiesgenerally.
So know even at multiples, comps, DCF, allthat.
(42:16):
What are some other superpowers that you'veseen from other VCs, maybe from other
backgrounds that you thought were interesting?
So, you know, have you seen like somebody comefrom like a writing background that was a VC or
any of your friends in your women's VC group?
Have you seen anybody that just came from justa background from left field or are they mainly
all just the traditional banking route and thenVC?
(42:40):
You'll you know, you'll see some consultantstoo, prior consultants.
I think it can be it it really can be anything.
And if you're passionate about the industry,you know, your skill from whatever career you
had before will translate in some way at somepoint.
So there isn't one path.
(43:07):
I networking and hustling, I think that helpsby far.
Yeah, I think I truly believe anybody can be aventure capitalist.
It's such a relationship based business.
(43:27):
So as long as you're able to, I would say thekey skill sets are building a network.
I feel a lot of it is community and content.
So I'm trying to build some content here incommunity, but there's people that have been
doing it for a long time and half of the alphais really building that community and network.
And then I think Shayla here had a question.
(43:49):
I think this is a good one too.
So you get the deck, what are the maybe thefirst two or three things that you look at or
think about with the deck?
I think the my very first screens are that it,you know, is located in The US.
Mhmm.
Looking for, you know, post product revenue.
(44:12):
Those are my very, very first screens.
And then you wanna make sure, you know, thatthe market that it's going after is big enough.
Mhmm.
You know, looking at competitors, any moat thatthey have.
Yeah.
I think those are the team.
Yep.
Those are kind of the first screens.
Is there an ideal monthly revenue that you'relooking for or like ARR that you're looking for
(44:37):
or just general just at least showing that theyhave revenue?
Yeah, I would say just general.
Okay.
Is good.
So it could vary.
It doesn't have to be as specific.
And I mean, what I like to see is, from yearone to year two, just some step up in revenue
or some increase in value of the revenue aswell.
That way you can kinda Yep.
(44:58):
You can probably make some assumptions of thepotential valuation that would coincide with
the revenue step ups as well.
Right?
Mhmm.
Yeah.
Yeah.
And any KPIs, any user metrics, any data likethat is great.
Is it mostly B2B or do you guys also look atconsumer as well?
Mostly B2B.
(45:18):
Got it.
Yeah.
So the KPIs are pretty consistent because it'skind of a basic framework for and you guys may
for b to b, are there any specific KPIs thatwould be helpful for people to look at as
they're evaluating b to b startups that hasworked for you?
I think it's generally how the founder sees itand tracks it.
(45:43):
Because they're gonna know the best way to lookat it and analyze it.
So definitely relying on them when it's anindustry that I don't have, you know, a
specialty in.
Yeah.
It's a good point because different even thoughit's just b to b, you know, ARR is just a very
general metric, but they may be tracking thingsdifferently in their dashboard as far as like
(46:08):
maybe what's important to them.
I think what you're saying is like for somebusinesses, like average time spent in a B2B
SaaS platform, more important than somebodyelse that's that's just like paying for a
transaction or something or like using data.
Because I think there's really interesting.
So there's an interesting FinTech company thatI met in Singapore.
(46:28):
I mean, Singapore, in Israel.
And what they do is they can take So they buildcustom models for people.
And then if you wanna build more models, itjust automatically bills you.
But it's kinda more on demand versus thetypical financial terminal where you have to
like pay for like a Bloomberg and then likejust just pay for the terminal and you get
(46:50):
kinda limited sets.
But this company is a little more bespoke.
But like their metrics are really like how manycustom models were built and then the billing
gets scalable based on like how much processingthey're doing.
So I feel like those KPIs would be differentthan just like an annual subscription, right?
If you just pay for Salesforce and then you buya couple, like it's a Salesforce like CRM and
(47:15):
you buy the base system, which is like 15 andthen you just upgrade to a couple apps.
I feel like that's much more similar, but Ithink you're right.
Like thinking about how they analyze theirplatform and success of the platform, think is
really interesting.
Yeah, definitely.
Yeah, cool.
So we got about ten minutes, maybe we'll take acouple more questions.
(47:39):
Anything else guys?
I had one question.
Sure.
Hi, Sarah.
I'm also from The UK.
I did a similar sort of pre career path, soalso an economics graduate at Warwick and now
in banking.
And I found that when studying economics, get alot of the investment banks come to you and
they just sell this massive dream.
(47:59):
And then it pushes you towards sort of IB andalso your whole cohort is wanting to go in that
direction.
Yeah.
So that sort of fuelled my interest in IBpredominantly and I wasn't really, you don't
see a lot of VCs coming to pitch to sort ofeconomics grads.
And I know you mentioned in the beginningsomething about trying to go right into VC.
(48:24):
So how would you sort of say economics grads orpeople in that sort of space can get into it
when there's such an inflow of IBs?
And then the second point was around sort ofhow does your experience in banking compare to
now being in VC?
Obviously banking is a very differentenvironment to VC.
There's sort of crossover paths and you talkedabout how you're starting to build your network
(48:47):
but what I've seen in banking is that you kindof have to build your own internal network to
get recognised in banking itself.
So I'm guessing that helped you when it's cometo VC as well.
Yeah, great questions.
It's very different than banking.
The hours in banking can be pretty brutal.
Just never having a weekend off, working till03:30 per month and a half.
(49:13):
It definitely wears on you.
But I will say, you know, the skills that youlearn in banking, whether it's the finance and
the strategy, you know, you're you're creatingpitch decks for companies with potential, you
know, acquisitions targets, and you'redeveloping a sector expertise.
So that will always come in handy.
(49:35):
And then then, you know, your friends who wentinto banking, eventually, a lot of them will go
into corporate jobs.
So I have a lot of friends who are at companieswho could potentially help our portfolio of
companies, you know, by eventually becoming acustomer someday.
(49:57):
So being able to connect them is hugelybeneficial.
The cohort that I did banking with, I don'tthink anyone else went into VC.
Some went into private equity, corporate someor some the rest are still there.
Those are kind of the three three tracks.
(50:19):
But the skills that you develop and the networkthat you develop there, it still translates
into VC, you know, and and I think it'll bevery beneficial that you have had that.
Do you miss do you miss banking at all?
Besides the hours?
(50:39):
Do you miss the work?
Because
there's a lot of modeling, right?
A lot of quantitative stuff.
So sometimes you miss that stuff.
Yeah and then just the pace of it.
Yeah.
And I think it was also everything was inperson too.
Yeah.
So And I think the biggest dynamic with bankingtoo is you can kind of see results pretty
quickly, right?
You either do the transaction or you don't,right?
(51:02):
And you can see the waterfall once it happens.
So, that's interesting.
Yeah.
And I really appreciate your insights of someof those key skills and how they translated
into VC.
And I'll wrap up in a few minutes, I think onequestion that I always like to ask at the end
is any piece of advice that you've gotten froma mentor, looking back on your career or just
(51:24):
someone that you have shadowed, anythingprofound that they share with you that you
wanna share with us?
I think just building your network and alwaystrying to help when people reach out, pay it
forward because I think that always does comeback to benefit you.
(51:46):
So that would be my piece of advice, try tomeet as many people as you can,
network,
that will come in handy.
That's really a good point.
I mean, there's there's a friend of mine is mycousin's friend.
He works at Blackstone and you can imagine,right?
Everyone's trying to get a meeting with him.
And I asked him the same question and he waslike, look, just take meetings because you
(52:10):
never know where they'll lead.
Even if you don't get anything out of it.
Just take meetings because you never know thatperson may know a pastor that's like an LP.
Maybe that person knows a pastor that's relatedto an LP.
I think if you just kind of take meetings toget to know people and build connections
without expecting anything, think somehow theuniverse works out.
(52:32):
So good advice.
Appreciate it.
I love it though.
Yeah, I agree.
And I try to do the same thing as much as Ican.
And I think you can probably try to optimizeyour time with time boxes.
So Calendly is a good thing to do.
You could even block off what I thought wasreally good.
I think they said this in Radical Habits,blocking off a time in your calendar or your
(52:55):
week for collaboration time.
And that's the set day and time box whereyou're saying, Hey, you know what?
This is the time where I can meet new people.
And when it fills up, they can just kind ofgrab the next week, but at least you have that
time allocated.
So that was something I picked up.
But this is great.
So anybody else have any final questions?
If not, we'll wrap up let Sarah get back towhat she's working on.
(53:20):
Yes, guess last question, Sarah.
Being that I'm an amateur novice in the venturespace.
I wanted to know in terms of venture capitalwith an early stage startup and early fund, is
there a way to if the business is producingrevenue, is there a way to contractually
(53:43):
structure or is this commonplace tocontractually structure cash flow until you
make the official exit, let's say seven yearsout to reduce the basis that you originally
invested in the company and to ultimatelyincrease your overall rate of return.
(54:04):
Is that actually done?
So you mean like, are you saying like That'shold the you're company talking about.
Yeah, are you saying like hold the companyWell, are you saying that holding the company
accountable to generate revenue?
No, not hold the company accountable togenerate revenue.
Meaning that if the company is free cash flow,is in the free cash flow space, free cash flow
(54:26):
positive.
Where based upon whatever your stake is or yourshare size as a means of reducing your basis
until you actually exit your position.
Or is it just or is the return strictly basedon exiting your stake or your equity within the
company?
(54:47):
Yeah, it would be on the exit.
You're not going to but I think you're talkingabout are you going to take if they're free
cash flow positive, are you gonna takedividends?
You would want that cash to stay in thebusiness so the business can get that cash to
grow versus paying it out to investors.
I think that would be harmful to the company.
(55:08):
At the early stage, you do see that in privateequity.
They'll do a dividend recap.
But but yeah, not not in an early stagecompany.
Okay, that makes sense.
Thank you.
Cool.
Well, hey, Kevin, good question.
And Sarah, thanks so much for your time forpaying it forward, supporting the community and
(55:29):
excited to hopefully get together sometimewhenever you make it out to New York and I'll
give you a ring when I make it out there.
Yeah.
Thank you so much for having me and feel freeto reach out to anyone.
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