The New Fund Manager Survival Guide

How I Built a VC Firm and Track Record at the Same Time

If you would have told me in 2016 when I made the decision to build Precursor, that by 2022 I would have led 15 Deals and that Precursor would have $100M+ in AUM, I honestly wouldn’t have been surprised. I am like that – I take a goal, cloud everything else out, and run towards that goal until I’ve exceeded it.

There are though, many things that surprised me along the way. It was a long journey, one that cost me a lot of blood, sweat and tears and I’m proud of myself for persevering through it all. *queue Beyonce’s Be Alive*

So much of my work in the early days was about building, learning and operating under extreme uncertainty – constantly. When I made the decision to build Precursor, Charles Hudson (who ran point on LP relationships and who was the only other FT person at Precursor) had raised about $5M, and each dollar raised was a struggle. I was also one of very few (but not the only!) Black women in venture.

If I’m honest, the lack of awareness of all of the things I needed to accomplish to reach my goal was a blessing. I don’t know if I would have taken the role if I knew the steep mountain climb ahead of me. I picked a really difficult path.

Essentially, my task was to:

build a Black-owned VC firm (at a time when there are very few)

that was both Pre-Seed + diversified (at a time when both Pre-Seed and diversification was not accepted as a strategy – highly concentrated Seed funds was and continues to be all the rage)

with very little capital (and no trust fund to back me up if I failed)

do it twice as well as anyone else (in an attempt to pre-empt/mitigate the bias that I knew the firm would receive)

all while also launching my own career in investing (something I knew very little about)

To accomplish all of this, I broke the steps down into measurable, daily goals which then compounded into quarterly goals and then eventually voila – there was a website, investments, mark-ups, mark-downs, fundraises, onboarding processes, LP letters, employees, investment memos… the list goes on.

When I was first thinking of this post, the song that came to mind was Seasons of Love (if you haven’t watched Tic Tic Boom yet, what are you doing?!!). How do you measure a year when building a company? I thought I would break it down into Fund cycles because each Fund has felt like its own distinct journey.

Fund I Learnings: 2016-2018

What Have I Gotten Myself Into?

This is the chapter during which I literally had no idea what I was getting myself into. You might remember this blog post of mine during that time: What Does An Associate Actually Do?

I finally got the “dream job” that my nobody – my MBA School classmates and career counselors included – really believed that I could get. I remember many an advice session with folks who made it clear that given my nonprofit background, this aspiration of mine made little sense and shared opinions like “why don’t I try instead to focus on selling toilet paper or razors and if I’m lucky maybe even get a consulting gig?” I did end up selling toilet paper at Kimberly-Clark in Neena, WI for a while, and it was horrible, but I digress.

But now what? What do I do with this new job? With this new really heavy responsibility? I had never seen a VC firm built before, and didn’t have anyone close to me who had much of an experience in VC. I had no idea where to begin. So I started step by step.

Before I get into the steps though, I’d like to paint more of the picture for you about what venture was like in 2016. There were only a handful of firms who had a chokehold on the market and it very much felt like a white boys club. I remember one of the first events I went to – one for LPs to meet emerging GPs. Throughout the entire day, I only remember seeing two women on panels – both of whom were white – and the overall tone of the event felt very didactic. If you built your firm this specific way, you had a chance to pitch to these specific 5-10 LPs, and only if one of them said yes could you be successful. Anyone outside of that norm was highly critiqued. I took it all in and tried really hard to show that I belonged, but to be honest, I felt like I was drinking from a very large water hose and felt like I was always behind – I didn’t know the latest VC Twitter convo or go to the most recent happy hour w/ Elon Musk or have a background in PE/Banking/Stanford to discuss.

I took a breath and started from the beginning. Which I outlined as follows:

  • How do I find awesome companies? I’ll start by finding them with a podcast. I was hypersensitive to the fact that I was a black woman and a newcomer in VC and I wanted to be sure that if I was asking a founder for their time, that I had something to provide in return. I also wanted to use this podcast to prove people wrong. I got so much negative feedback about my thesis in the early days. I knew awesome companies were building in the thesis I created so I used this podcast to demonstrate that. My cousin helped me produce the podcast and I buit it out on free software in the early days of podcasts. It was a challenge, but it’s been awesome to follow-along these companies’ journies because I now have a track record through the podcast as well.

  • How do I find investors I trust? I’ll start by building a network of Women of Color in VC. The idea was sparked by a random lunch discussion with another woman of color in VC. We wanted to create a space for women of color to feel connected to each other. These relationships could result in job offers, deal flow, advice sharing. We planned, scheduled and got sponsors for quarterly dinners for about 2 years.

  • How do I build OS for a VC firm? I’ll start by finding the right tools we need and then, once I’ve figured them out, I’ll publish my findings. It was really hard to find the right tooling in 2016. So much of VC was manual because in a lot of firms, each partner was doing 1-2 deals a year. So they didn’t need software to see a complete collection of holdings year over year. The only real software we were using was Sevanta – which was very old school. Precursor was different. We needed software to account for high volume dealflow and deals. It should also sustain our really large and growing network since we relied so much on coinvestor information as well. So much was trial and error (this continues to be the case honestly) but I was proud to build out our foundational stack which became – Affinity + Airtable.

  • How do I build a deck for LPs? This was pre-Canva and I have no consulting experience which is where all of my MBA friends got their powerpoint skills. I didn’t have the patience to learn powerpoint from scratch and luckily we consulted with Moxie Method who created a powerpoint deck structure with our specific branding, so some of the foundational work was done. Now what do we include? At the beginning, it was such a whiteboard session. Would LPs be interested in founder diversity? Maybe co-investor metrics? How about follow-on timing? In the early days, I workshopped the AGM and LPAC meetings for weeks. I don’t think I can say now for sure that there is a recipe for success here, but we found a template that worked for us and continued to iterate over time.

  • How do I fundraise from LPs? I’ll start by leveraging my previous fundraising experience in the nonprofit space. I realized once I started there, that so many of the same funders I approached at the Fund for Public Schools were also investing in VC as an asset class. As I zoom out, it makes sense – philanthropy was part of the hedge fund/family office/ foundation investment strategy. VC is also a part of their investment strategy. I don’t know for sure, but I wouldn’t be surprised if the same overall percentage of capital is given to philanthropy as well as VC. Because VC is such a high risk strategy, the investment dollars might return $0, which is the same return as philanthropy.

  • How do I value companies? I had only taken the online version of Venture Deals before – which talks about how to value companies in a theoretical manner, but this did not prepare me for how to value real life companies with real life founders building our real life future. I had so many questions – and continue to have these questions – because I don’t think that valuing companies is a science, it is more of an art and it is an art that holds a lot of bias. The below tweet is from very recently, but the underlying premise holds true throughout the ages.
  • How do I build cap tables? I’ll start with google. While I had taken one financial modeling class in business school, it really only gave me the basic tools to build out an excel spreadsheet. The free tools I found on google were worth their weight in gold as I learned how to read and design cap tables. Some of my favorites were Captable.io (now LTSE), Funders Club and Corporate Finance Institute.

  • How do I build a website? I had never built a website from scratch before. But I had built out some templatized pieces of a website before (thank you, Fund for Public Schools for that opportunity!) I learned via trial and error how to upload photos on our website which was particularly challenging – we were attempting to showcase the faces of our founders to demonstrate that we backed different people compared to others. To help out with the pieces of the website that I simply couldn’t figure out, we employed a contractor – Kenneth Lim – who was immensely helpful.

  • How do I build a scalable support network for founders? So much of the support we would need to provide founders would need to be scaled. The vision early on was not how do we support 1 founder or 2 founders, but how to support 15, 20, 100. We have now grown to over 500 founders. In 2016, believe it or not – Slack was not a big deal! It was not widely used and was still very much a startup. We created a founder Slack early on with the hopes and dreams that it would become a self service like product. What we found was that because the founders we were working with were Pre-Seed, they had a lot of operational, administrative questions that could easily be answered in a place like Slack – like what PEO are you using? or, how are you paying your intl employees? or, does anyone have extra office space in FiDi? All we needed to do, in many cases, was get founders together. So in the early days, it was a lot of dinners and lunches.

  • How do I write investment memos? In the early days, we did invesment memos for all of our rounds done via an SPV. I mirrored my investment memos based off of the public policy memos that I used to do at Duke University (who knew that Public Policy degree would be helpful in finance!). I am so grateful for that training. It allowed me to structure memos as a 1-pager, why did we invest initially? what has been their progress since the initial investment? why do we want to double down on this investment?

  • How do I read, review and issue term sheets? One of my first projects at Precursor was to analyze our terms sheets across the portfolio and put together a spreadsheet so we could catalogue with whom do we have side letters. I spent a lot of time reading and reviewing term sheets over and over – in those days priced rounds were the norm even at Pre-Seed/Seed – and understanding the nuances between what a Cooley term sheet looked like from a Fenwick term sheet and everything in between. There wasn’t much I could find on google that helped me here and instead, so instead, I took my skills from working with a lawyer in NYC and read each document closely and intently, over and over again.

  • What is crypto? One of the first things I got excited about when I joined Precursor was crypto. I spent months digging into it. I was obsessed with the idea that blockchain could really help the government operate more effectively. You wouldn’t need to sign 10 different piece of paperwork if all of your information was stored on the blockchain. I got really far down the rabbit hole learning about ideas that were getting implemented in Dubai! This was my first experiment on getting up to speed quickly on an area I previously knew nothing about and it was envigorating.

  • How do VC finances work? I was in charge of managing our first audit and also the fund’s budget. It was a lot to manage on top of all of the other things, but was great to get a very clear-eyed understanding to exactly what it costs to set up and manage a VC firm.

  • How do I take care of myself emotionally and financially? So much of the early days was really hard. I spent a lot of my time doing my own work and in addition to that supporting Charles as he was on the front lines of fundraising and had to shoulder a lot of the financial burden of starting Precursor. I shouldered my fair share as well – taking a lower salary, working extremely long hours and not having much of any of the traditional support system you receive in corporate life – whether that was the HR benefits or the peer colleagues. I found that so much of that early work was instrumental in giving me a clear eyed view into what it means to be a founder and I rely a lot on that experience to help me as I counsel founders today.

Fund II Learnings: 2018-2020

Focus on The Founders

As I began to find my footing, I started to think through where I really wanted to spend my time in venture. I had always had a clear vision about the types of founders I wanted to back and the types of companies I wanted to champion. Now how do I start working towards that more focused goal?

  • How do I deepen my relationship with investors? I decided to join the NextGen VC Board to help me develop a stronger network with investors. I applied with the help of Anarghya @ Maveron and interviewed with Sunil @ Ubiquity and Roseanne @ Renegade. I got the opportunity to explore how to cultivate events and experiences that would allow me to build a community who I could rely on throughout my venture career. Over the course of my Board tenure, I planned many a wine bus trip and happy hour and it was a lot of fun!

  • How do I communicate my values? In my previous career, I never had to worry about this as much. In the public sector, you know that everyone who is there has a principle value of service. Now I was in VC where a lot of people valued wealth over all things and I didn’t know how to relate to these people. I decided to create a user guide to help me navigate these new waters.

  • How do I get into the flow of information? I was given an opportunity early on to join calls that Charles was a part of. I would send him an e-mail at the end of each week, letting him know which calls I’d like the join in the following week and he would let me know which ones I could join. I was so swamped in the first two years that I didn’t take advantage of this much. In Fund II though, I was oftentimes in back to back meetings with Charles all day for days at a time. Listening to the questions he asked founders/LPs/other investors, listening to the concerns founders/LPs/other investors had and trying to soak up as much as I possibly could. I also created our IC meeting during this time to create some structure as well.

  • How do I get leverage? As I transitioned into a new role, I had to figure out how to make sure all of the previous things I was doing before got done. We were still barely $50M AUM which meant very limited management fees, so I was cost conscious when I thought through how to get leverage. I reviewed most of the tasks I was doing before to explore which I could automate (Zapier became my best friend!) and which I needed another human to do. There was more than enough work for another full-time person and because we didn’t have a hiring manager, that meant I had to learn how to become the hiring manager. I drafted the job description, posted the role across LinkedIn, Twitter and elsewhere and singlehandedly reviewed over 300 applicants – taking phone interviews with about 100. I tried as best as I could to limit bias in the process and we ended up hiring an amazing person for the role – Ayanna Kerrison – who is still with us today.

  • How do I create a more inclusive ecosystem? Something that I recognized early on was that the many of the types of companies I wanted to invest in were led by Black and LatinX founders. However, my experience was that there was a perceived increase risk of those founders – honestly for no good reason. But the perceived increase risk of those founders led investors to increase their diligence of these founders and worry significantly about the ability to syndicate those deals. So in order to generate more awareness of who was already doing these investments, I decided to create a list of investors doing this work. It was very challenging work for me. Because there was no public information on this, I had to poll investors I knew one-by-one on how many investments they had made into companies founded by Black or LatinX people. I polled 100s of investors and with that data created The Interrupters List to shine a light on those who were doing this work to inspire others to follow their lead.

  • How do I move from reactionary to strategic? As processes were nailed down and things felt like normal, I wanted the firm to move into a more strategic place. I built out our quarterly offsites to make space to talk about things impacting the firm more generally and how we could get ahead of the next thing. The first quarterly offsites were very open-ended where I tried to bucket our conversations into categories and discuss topics pertaining to those categories.

  • How do I continue to build a name for myself so the right founders can find me? I spent a lot of time trying to figure out how to make sure founders could find me. I continued working on my podcast, spoke at SXSW, spoke at Grace Hopper, participated in interviews and traveled to Australia! The hard work paid off. I sourced about 200 companies the first year, and over 600 the second year!

  • How do I do my job well and also be thoughtful about my own boundaries? I’ll be honest, I am still working through this in therapy. I don’t know if you saw Encanto, but my life growing up was a combo of both Mirabel and Luisa – so I am very used to over-giving. When you are in between two roles as I was – helping Ayanna get up to speed and helping Charles work with founders/LPs – it is hard to figure out where my role started and where my role ended. I was pulled in a lot of directions and was still figuring out my voice in this ecosystem and learning how to say no.

  • How do I manage my own anxiety as I manage the uncertainty of this new role and the uncertainty of Precursor? At this point, Precursor still felt very much like a startup. In addition to that, because I was so great at my previous role, I was promoted into a role I didn’t know if I was good at! I joined Pathwise to help provide me with a trusted community so that I could be more thoughtful about how I was showing up in spaces around me. It was such a great group of people to learn from and I got the opportunity to practice showing up as my authentic self in this industry which was really useful and helped me build my own confidence.

  • How do I start prioritizing myself again? I spent so many hours in the early days on all things Precursor. Days, nights and weekends were booked, and I rarely if ever took a vacation that lasted more then 2-3 days. I realized this was unsustainable and had a hard conversation with Charles. I also realized in this time, that in so many of my previous roles before Precursor, I burned out after two years and then found a new role at a different company, where I would rinse and repeat. I didn’t want that to happen here and wanted to address it in advance. I decided to take more time off, spend time exploring other projects that gave me joy and also got more deeply involved in my community.

Fund III Learnings: 2020-2022

Building my Track Record

I picked a really hard asset class to build a track record when so much of how this industry defines success for track records is: did the company raise lots of money from <enter cool multi-stage firm’s name here>. Deciding to invest in pre-seed companies, which predominately have the highest risk of all, means I’m asking for a lot of heartburn. Especially compared to folks who have instead decided to focus on Seed/Series A deals where there is more data and more infrastructure to a company that you can evaluate. In addition, lots of the pre-seed companies I invest in are pre-product, which means that it can take them the full 18-24 months to get to a strong Seed round and years after that to get to a strong Series A. So how do I do this, in an industry that is fueled by so much hype, growth at all costs stories, and generally keeps a short memory?

  • How do I define success for myself? First things first, I needed to build a strong internal compass. This feeling of groundedness would keep me from flying too far into the wind anytime a challenge arose, and could also help me stay laser focused on what really mattered. To me, success is building multi-billion dollar businesses alongside founders who care deeply about the people they are building their product for, and through their work are committed to making life better for the 99%. There are millions of ways to accomplish this and I can’t get distracted about other metrics of success, until the end goal is achieved.

  • How do I invest in a pandemic? Being able to begin my checkwriting career in a pandemic was both a blessing and a curse. A blessing because I got to see more companies than ever before because so much work was done on zoom. I saw about 2K companies over the course of this time! A curse because the founders I was backing were still largely first time founders, so guiding them on how to build a company in a global pandemic was challenging to say the least.

  • How do I transition from asking for sponsorship for my decisions to becoming a decision maker? This one was so hard! I have never had a leadership role in my work like this before. In my 10+ year history of working, I have never been the boss. So when I had to transition into this leadership role, I had to shed a lot of the “asking for permission” behavior that I had learned that had gotten me to this point. I had to learn to trust my own judgement and to stand strong in my own opinion even when faced with opposition.

  • How do I invest in our team? We grew a lot during the pandemic. I found us a great CFO and also supported a new analyst search. Charles hired a Chief of Staff as well. We were no longer a team of 2 or 3. There is something about becoming a team of almost 10 that really makes you think about company building. I launched a series of conversations around – how we wanted to work going forward, what additional benefits we’d like to see, and how we could start incorporating more effective communication strategies like getting trained on how to provide feedback and building out more effective meetings. I am grateful for The Grand (full disclosure: they are a Precursor portfolio company) for their wisdom here and I also listened to a lot of Brene Brown’s Dare To Lead Podcast at that time to inspire and inform new stragies.

  • How do I continue to uplevel? As I grew into this role, I felt more and more overwhelmed. I joined Kauffman fellows which helped me identify more insights about myself. I realized that in order for me to uplevel, I needed a crew. A group of people who I could be completely honest and vulnerable with who I knew would have my back. My forum in Kauffman has become that and I’m grateful for all of the other programming Kauffman has provided as well.

  • What do I need to do my best work? Now that I have more reponsibility on my plate, what do I need to be successful? This answer is still evolving, but I realized the big thing I needed was space. Space to think, space to give me time to respond vs react, space to write, space to continue honing my own voice and trusting my own decisions. I started working with a FT EA, made the decision to work from home for the forseeable future, made the decision to get a coach (thank you, Jen for helping me find her!) and doubled down on learning how to say no. I also now try very hard to make sure I have spaciousness built into my calendar like No Meeting Mondays and budgeting time for daily breaks.

  • How do I guide founders on my own? As I made the move to invest in companies myself, this meant that I was the deal lead for all things related to that portfolio company. I generally spend about 1hr a month with each founder and also make myself available for adhoc concerns. If the company needed guidance on fundraising, they called me. If the company needed leads for a new hire, they e-mailed me. If the company had product ideas they wanted to explore, they told me. I was now the main point of contact for each founder I worked with and I wanted to be able to show up for them in a way that was authentic to me. I built out a one-pager on all of the things I wanted to be able to offer, and focused a lot on how I wanted to be seen as their coach – I decided to invest in their companies to guide them on their growth, not to fix them.

  • How do I build a thesis more publicly? After a year of investing, I decided to launch a Precursor substack with my own writing about my thesis. I used a lot of the learnings I gained from working with founders to fuel a hopeful and honest view on why I was excited about backing companies building for the long-tail. It took me about two months to build out this thesis and I’m so grateful for many of the founders in the portfolio who helped me draft and edit it!

  • How do I build networks within this thesis? I decided to build the SMB Syndicate with a few friends after I was told many times that SMB tech was too small of a market. I knew this wasn’t true and so I decided to collaborate with like minded individuals to showcase the great work going on in SMB tech. SMB tech fits squarely into my thesis so I also wanted to build this group as an excuse to share deals and collaborate on deals with others investing in the same space.

  • How do I let go of the sef-limiting beliefs holding me back? I talk to my mentor, Miriam Rivera, about this all the time. As the saying goes: what got you here, isn’t going to get you to the next chapter. So much of what propelled me to this place was my own fear and anxiety that I wasn’t doing enough. I needed to do more and more and more to catch up! Now though, I’m setting the pace. The new work that I do now requires attention, strategic thinking and concetration. That means focus. Which means I can’t be trying to do everything anymore. Another belief that I’m working on shedding is this belief that in order for anything to be worth it, it must be a struggle to achieve. I’m allowing more ease into my life which is a daily practice.

  • How do I want to show up in the world? I am still figuring this out, but I know that so much of how I show up in my the world must be grounded in both my own sense of self, sense of community and sense of justice. I wrote some thoughts on how I am grappling with my newfound power, and I hope to use this power for good by also spreading it among organizations like Colorwave and Project Include.

Light work*

Through this essay, I hope that I have illuminated some of the many pieces of my story and through that illumination, I hope that it helps light the path for others as they find their way and build towards their own vision.

*conclusion inspo: Yrsa’s Substack Article titled Light work

Why I Decided to Do Kauffman + How I Found the $$$ to Pay for it

I am so excited to be a part of the Kauffman Fellows Program! I did it for a variety of reasons, which I’ll try to outline here.

First, though, I want to tell you about my biggest pandemic learnings. The answer to why Kauffman starts there.

Pandemic Learnings

The pandemic gave me a lot of time and space to reflect on how I was previously operating in the world and explore how I might design a life that fits me post-pandemic. I realized that I was very reactive, almost constantly, in pre-pandemic life and I wanted to build more intention into my life. After this reflection, I started to explore what I used to do in pre-pandemic life that doesn’t suit me.

The first thing I came up with was networking. I realized I get very serious anxiety around networking in its traditional sense. Attending events, especially nighttime events, was devastating to my sleep. It takes me hours to process events because I am very hypervigilant in large groups, which means that the cost of a nighttime event is a nighttime of sleep.

The second thing that came up was my commute/working life in SF. I am based in Oakland. I love Oakland so much!! I love the new friends and communities I have been able to build because of the pandemic-induced WFH situation. I am now more deeply connected to my neighbors, local businesses + city government. I won’t give that up. My ability to live in a neighborhood whose values align so deeply with my own, to have Black neighbors, to have the kids on the street look out for me to see if I’m hanging out on my porch swing… it’s really beautiful. I now know the true opportunity cost of my commute/working life in SF. While Precursor plans to open an office eventually, I don’t expect to be there for more than a few hours on 1-2 days a week and plan to use that time specifically for team building.

There are a few reasons why I think it took me so long to realize these qualities about myself. One of them is that there is a prevailing notion in VC that younger VCs have infinite time and energy because they don’t have children, spouses, etc. This is compared to older VCs who have families and can’t possibly be expected to go to another networking dinner. I fundamentally disagree with that. Young VCs might be caring for aging parents, might be volunteering in their community, might be struggling mentally/emotionally and this expectation that their time is less valuable than older VCs’ time is dangerous.

As a result of this reflection, I decided to replace the very transactional nature of many of these coffees and lunches and happy hours with anyone who e-mails me w/ an @vcfirm.com e-mail address with an experience that gives me an opportunity to build relationships with people who are taking the time and effort to really get to know me and who are excited about improving themselves. Which brings me to Kauffman. I am so excited to join this group of folks who are building intentional relationships with each other in a way that is less transactional.

Growth Mindset

Another reason I joined Kauffman, is because while I have a really strong perspective on what types of companies I am passionate about investing in, I know that there are still things I don’t know about this business and myself. I am looking forward to using this space, as a Kauffman Fellow, to be, in many ways, a learner. There is a lot of talk about how Black women need the same opportunity to fail as white guys. I think what we also need to explore is the concept that Black women need the same opportunity to be seen as learners instead of as experts. There is so much research that shows that Black girls in education spaces are adultified. While I’m no longer a child, I think the corollary here is that as a Black woman, I’m often expected to enter new spaces and know all the things all the time – to never slip up. This is a trap. I deserve the space to be seen as a learner and to be given the grace that learners are given. I am grateful to be at a fund that gives me space to learn, make mistakes and grow within the fund. I wish that for all Black women in VC.

The Cost, Though

I want to be honest about how I paid for it. I am not rich, plus Precursor is not a $1B+ fund, so I had some really hard decisions to make.

$80,000 is the cost of Kauffman. Let’s not beat around the bush here: that price tag is really really steep. This leads to an exclusion of folks who might find the experience useful, but just can’t figure out how to make the numbers add up. Many Black people in venture are at less established funds that are unable to foot this large bill on their behalf and they don’t have access to the family wealth to put down this capital on their own. I know this to be true, not just because of the data, but because that is my story. To me, that $80K might as well be $1M. I don’t have $80K and have no way of borrowing it from family. So after I applied and got accepted, I asked for help. I reached out to people and organizations who have been supportive of me over the last 5 years and I was met with such generosity. I was able to get $10K from an 😇, $20K from a sponsor organization and $40K from Kauffman. Precursor paid the remaining $10K.

I am so lucky. I know that. I am brainstorming ways to make this experience more accessible to those who are not as lucky. More updates on that later this year! If you’re interested in collaborating on this and have ideas, let me know! You can reach me at sydney@precursorvc.com.

Thanks for reading! Looking forward to continuing to share more about my experience in the program over the coming months and years!

References and motivation to write this:

  1. Nick Caldwell’s “Happy to Be Here” YouTube clip

Risk Analysis: Failed Company Early Employee vs. Founder

One of the weird things about being in VC now for almost 5 years, is that there are some topics on VC Twitter that feel like groundhogs days. They are debated in earnest at least once a year, and nobody in that conversation seems to remember or care that this happened exactly the same way a year prior. I think this probably happens in many crevices of the internet, that is just the one that I occupy most time in so I see it very plainly.

One of those groundhog day topics is the VC Twitter version of oppression olympics. It’s the discussion about what is riskier: to be an early employee or to be a founder. The funny part about this topic is that most of the people who weigh in are founders. They weigh in as if they can speak for both founders and employees even though they have only been founders. In many cases, they are airing out their own traumatic founder experience and can’t imagine someone else saying that their experience could be more (or equally) difficult. Especially if those people are their own previous employees who they paid when they were depriving themselves of any salary. I get it, being a founder is an extremely isolating, expensive, and overwhelming experience. And I don’t want to take that away from anyone.

My experience though has only been as an early employee at Pre-Seed/Seed* companies that failed. The conversation I think we aren’t having enough is how to process your work product and history after a company you worked for fails. Especially as that pertains to your own feelings of self-worth. From my perspective, in every early startup I worked for, I was underpaid, overworked, and had few (or 0) coworkers to lean on or to learn from. If I had to pick the most important part of the riskiness equation though that made the early employee role that much more risky for me is that in those roles, I didn’t actually learn any skills. Instead, because I was constantly reacting to ever changing inputs, I had to rely on what I already knew to produce some semblance of a useful output. If I didn’t know something, Google was my best friend. The expectation at an early stage company is that as the company grows, the resources it has grows. Those resources can be used to help you hire a team, to get you access to information databases, to increase your pay. But what happens if those resources never arrive?

As a non-technical early employee, so much of the work that I did at the startups I worked for was very tedious, very unsophisticated labor. The lasting impact, in many cases, was nil because things changed so constantly. You didn’t know if anything you built or created would last until the next week. In my first role, I was in charge of supporting one person on the team to help her collect data into her spreadsheet to track the sustainability of the company. Then I moved into a more R&D role to explore a product launch (the product never materialized). In my next role, at a second startup, not a single one of the projects I managed actually materialized. So after a few months of that, the CEO transitioned me into more of a sounding board/advisor role where I was basically just performing emotional labor. Even in my early days at Precursor, I spent much of my time building (and then scrapping) CRMs, and tracking down a lot of paper trails. The administrative labor was overwhelming.

The hard part too about the employee vs. founder conversation is there is a strong bias towards founders. They are the avengers, the masterminds, the leaders. So as a result, “failed founder” has a certain gravitas to it that failed employee does not.

In my work as an early employee, on the good days, what I gained was perspective. I was given a spot in a growing ecosystem that I cared a lot about and so I was able to use that vantage point to better understand how I wanted to navigate that ecosystem. On the bad days, I was so exhausted by my ever-growing workload that I was in a constant fight or flight mode – unclear where I could even fly towards…

Obviously, things turn out well in the end. The third startup – Precursor – ends up not failing, my role expands and I get to grow in my own skills and experience. But I want to be honest about my early experiences so that others know what the real cost of joining an early company can be. I am also using my new position as an investor in companies to coach founders I work with on how they can be more thoughtful about their early employees and my hope is that this next generation of early employees receive the skills, experience and knowledge they need to fly towards something amazing.

*I can’t speak to the risk/reward profile to employees who join Seed+ companies

Inspiration from this post comes from:

1) a few conversations I’ve had with our MBA interns who are thinking about that first employee role at startups

2) a few conversations I’ve had with our founders – many of whom who have been founders before, but few of whom have been early employees are failed companies before

3) Yoni’s recent post – so honest, loved it!

4) Karla’s recent post really spoke to me and this is exactly the type of leader I hope to become, which requires being honest about the work I’ve done and how it impacted me

5) Ashley Ford’s interview on Brene Brown’s podcast about her memoir. Her decision to own her own story despite whether or not it implicated others is powerful and I plan to do the same. My story is mine.

Peeling back the layers of a quick VC diligence call

As part of my day-job, I invest in founders. A lot of them happen to be women. A lot of them also happen to be Black women. I am so grateful for the opportunity and the honor that I have to invest in founders at the earliest stages of their journey. It is really an amazing experience to be able to say: “I believe in you so much that here is a six-figure check to help you build towards your dreams.” If you told me as a young Black girl growing up in San Diego, that this was my future, I would have never believed you! This is an amazing privilege and I don’t take it lightly.

For founders who are starting technology companies, I invest in their Pre-Seed round. The expectation is that the founder will, after raising their Pre-Seed round, raise follow-on financing. Their Seed round, Series A round, Series B round…, all the way to IPO.

When founders in the portfolio fundraise for a follow-on round, I often get e-mails and requests from VCs who are considering participating in that round. The questions they ask are usually focused on trying to get to the same answer: “Do I trust your judgment on this deal?” Peeling back the layers on that question is: “Was your judgment similar to mine on this deal?” In these conversations, very few people are asking me to introduce new facts to prove them wrong, instead, they’re looking for me to confirm their own ideas. Some firms even have a name for this “confirmatory due diligence”.

Peeling back the layers on this again. The questions that I get from VCs about my decision – especially given that I’m investing in the Pre-Seed stage – are often specific to the founder. Which is fair. At the time that I invest, my main bet is on the founder. VCs ask me questions like: But she’s not technical and/or she is a solo founder, how did you get comfortable investing? How do you feel about her leadership skills? Aren’t you worried that she won’t be able to build a big business?

Peeling back the layers on this again. Most often, given the racial make-up of this industry, the questions I’m asked come from a white person. Sometimes a white woman, sometimes a white man, but white all the same.

When they ask these questions about a Black woman founder to a Black woman investor, there are undertones here. There is history here.

Which leads me to the questions I’m starting to build the courage to ask in response. They are: So, is this your first investment in a Black woman? I’d love to know if these questions were explicit parts of your diligence for other investments. Have you considered how it might feel for me, a Black woman, to try and convince you (who might not have any Black female co-workers, friends or founders) to invest in a Black woman? Or how it might feel for me, a Black woman, to convince you, a white person, that we see the world in exactly the same way? How might that diminish my own confidence in my own unique perspective? How might that be tied to larger issues about how you might not see Black women as leaders, or as convincing, or as likeable, or as capable of building billion dollar companies?

The list goes on. These dynamics cannot be ignored. The world is propped up by racist institutions and we have to acknowledge this openly and honestly and its impact. If we don’t we are complicit in it.

Why I Joined Colorwave’s Advisory Board

I am so excited to announce the I joined Colorwave’s Advisory Board! Colorwave is a two-part solution to accelerate equity and economic freedom in the tech and startup industry for Black, Latinx, and Native Americans. Our fellow program bridges the gap by giving early career professionals of color the training they need and connecting them with leadership opportunities at VC-backed private companies. We are also building partnerships with organizations that are looking to hire this talent into their leadership.

This is a full circle moment for me. In the summer of last year, I tweeted:

I realized through my responses that nobody else had solutions either. I’m so grateful that around this same time, these leaders came together to start building this.

Leandrew – who is an entrepreneur we backed at Precursor – asked me to join right around the same time as Jose Lopez in November of last year and we’ve hit the ground running. In only a few short months, I’ve been so overwhelmed by the fellows themselves. All 22 of the fellows who we are working with in this first cohort are brilliant and any startup would be lucky to have them.

I’ve also been so grateful by the outpouring of support by the ecosystem. From Mandela at Founder Gym who brought her wisdom to bear to build out the curriculum to VC partners like Lerer Hippeau who quickly signed as supporters to invest in this pipeline of black and brown talent to industry experts like Aston Motes who have offered their time and energy to talk with the fellows about what it’s like to be the first and only at a venture-backed startup. It’s been such an honor to work with this team!

Reflections on Imposter Syndrome

A few things happened yesterday that got me thinking about this. The first is seeing this post by Jenna Wortham on Twitter. She is referencing the fact that many media companies are now realizing that they have created hostile work environments for black people.

The second was an interesting conversation with my friend who mentioned that she didn’t understand why more white people did not see the importance of racial equality. I responded that this was probably a response born out of their own insecurity. For if there was racial equality and they didn’t have white privilege, where would they be? Would they be worse off than they are now? (answer is probably yes)

This got me reflecting on my own issues with imposter syndrome. And now I think I have a deeper clarity about what that means for me. So many black people have been excluded from racist institutions. As a result, so much greatness has been excluded from racist institutions. Because I have succeeded in spite of this, I am left with a less great competitive set. So my imposter syndrome comes not from the fact that I don’t belong with these other white people, it comes from the fact that maybe none of us belong. Maybe there is a completely different set of black, white, asian and latinX people who – if we had anti-racist systems – would be standing in our places.

So my imposter syndrome is actually not about me feeling less than great. I think I am pretty great actually. It’s about the sadness I have that I could be greater, could get better, could be more challenged if I was given the opportunity to compete with the best. And I believe that many, if not most, of the best are left out and/or pushed out because of racist policies and institutions.

None of us in any of our industries can write ourselves down as the best, the greatest or a member of the “midas list” until the industries themselves are anti-racist. To do the former before the latter is untruthful.

The Allure of the Black Messiah

“You’re organizing people to be self-sufficient rather than to be dependent upon the charismatic leader…the most important thing was, and still is in my mind, is to develop people to the point that they don’t need the strong, savior-type leader.” – Ella Baker, 1968

“The good news is that racist and anti-racist are not fixed identities. We can be a racist one minute and be an anti-racist the next. What we say about race and what we do about race in each moment determines what, not who we are. I used to be racist most of the time. I am changing. I am no longer identifying with racists by claiming to be not racist. I am no longer speaking through the mask of racial neutrality. I am no longer manipulated by racist ideas to see racial groups as problems. I no longer believe a black person cannot be racist. I am no longer policing my every action around a white or black judge trying to convince white people of my equal humanity; trying to convince black people I am representing the race well.” – Dr. Ibram Kendi from How to Be Anti-Racist.

This past week was devastating. With the killings of Breonna Taylor, Ahmaud Avery, George Floyd and the countless others who we will never know, it seems like white america has finally decided that black people are important to listen to.

Black people have been and will continue to be important to listen to. I worry though, that in an effort to offload the work of critical thinking, white (and black) people will gravitate to a Black Messiah. Someone who tells them exactly what to think so that they don’t have to think for themselves at all and also helps them offload some of the guilt of participating in a racist society for so long which prevented them from listening to and believing in black people in the past. The work that needs to be done cannot be offloaded onto a black messiah. The work is deep, personal and painful reflection on how your behaviors have contributed to (& if you’re white), and benefited from) white supremacist institutions.

Business + Big Government = New bffs?

via GIPHY

One thing the government has not done in this crisis is shy away from their responsibility to help. I’ve been impressed by their swift action to improve lives of workers and employers through the CARES Act. Startups are eligible for the Payment Protection Plan, so I’ve gotten to watch first hand how this whole experience has gone for them. From navigating which banks to apply through, to receiving the cash in the door, it’s been really wild to observe just how quick this process went!

To share some context on why I was so skeptical, my background is in government! I worked alongside the NYC Department of Education during Hurricane Sandy and saw – first-hand – how immensely slow it took FEMA to invest in the repairs necessary for life to get back to normal for many schools and families across the city. For one school in Queens, it took over 2 years for them to finally receive a FEMA payout. Another example of the failures of government in time of disaster is its lack of response to Hurricane Katrina (if you’re interested in learning more here, check out Treme on HBO which documents the failed work of FEMA and its devastating impact in New Orleans). 

So the fact that COVID-19 hit aggressively mid-May and businesses had checks in their bank account less than a month later is really unprecedented. Congress adopted the CARES Act and it was signed into law at the end of May. This created the Payment Protection Plan (PPP). With the PPP, the government essentially authorized forgivable loans of $349 billion to companies in order to allow them to continue employing their workforce despite economic uncertainty.

The CARES Act has an additional provision that allows for a work-share program where if companies have to reduce staff hours, the staff will still qualify for full unemployment benefits. It reminded me of this one article I recently read about Germany. They have a system called Kurzarbeit which essentially is a government subsidy for companies who are experiencing hardship. When companies declare Kurzarbeit, the government pays their employees a portion of their wages for them. So it seems like, with the CARES Act, the US is becoming more like its European neighbors.

This is no surprise for those who study history. It is in times of crisis that the government expands. According to the WSJ, “the pandemic may, like the Great Depression, foster structural policy change that outlasts the calamity itself.”

The PPP has left its mark on public policy for good given the strings it attached to the money it loaned to large corporations and small businesses. These institutions are all now forced to comply with additional regulations that hold them more accountable to the public. Below, I’ve outlined some of my favorites impacts the legislation has had on businesses.

Companies who accepted the PPP are prohibited from preventing their workers to unionize

  • According to the WSJ, “some companies seeking federal funds are facing restrictions on their ability to oppose attempts to unionize their workforce. One of the new laws states they should “remain neutral in any union organizing effort for the term of the loan.””

Companies who accepted the PPP are subject to audit

  • Large companies are now subject to audit by the government and all of the companies who accepted the PPP are now on a watchdog list that journalists have been keeping an extra close eye on.

Companies who accepted the PPP are restricted in executive pay

  • “Businesses receiving aid face government limits on how much they can pay their executives, and the new law says they shouldn’t “outsource or offshore jobs for the term of the loan and 2 years after completing repayment of the loan.””

The bottom line is, after experiencing such an extended period of “late stage capitalism” where it felt like business was an omnipotent agent, COVID-19 was the real test. It shifted the ground beneath our feet and tossed business off its 1st place trophy stand. I think it’s safe to say the fight is over. Business lost and the government won.

The government not only won, but they showed that they can continue to win. The fed chair recently quipped that “when it comes to this lending, we’re not going to run out of ammunition.” The government has started using its power and I’m looking forward to seeing what else they do with it. My hope is that next on the docket for government expansion is permanently strengthening our country’s safety net. We have already seen elements of this across the country as different government agencies have forgiven student loan payments and put a moratorium on evictions. NYC is leading the way with its essential workers bill of rights bill and I think as the crisis continues to stretch, more governments will adopt similar legislation. I look forward to watching government step up in this moment!

How I Built a Track Record in VC Without any Money

One of my goals is to use my voice more. That means owning things I’ve learned with hopes that it can help others. This feels very uncomfortable to me! Anyone who knows me knows that I am more of a show, not tell type of a person. But as I’ve grown more comfortable in my skin, I have realized that I must tell my own story. This gives me serious anxiety – but alas, every time you try something new, it feels unnatural and uncomfortable. So in the name of growth, I’m working through it. A few days ago, I listened to Brene Brown’s new podcast on FFTs (f*cking first times) and that gave me the extra bit of courage I needed to post this.

I hope this post is useful to any and everyone who is trying to figure out ways to demonstrate both to themselves and to others that they are great investors. Without further ado, here we go!


A few weeks ago, I was really excited to see Nate Maslak — co-founder of Ribbon Health — announce his Series A led by A16Z. I met him for the first time almost two years ago when I invited him on my podcast, “Be About It

I created the podcast to show the world that the companies that fit my thesis could be successful. 

My thesis has focused on companies that are building products that give real people more agency over their lives. This can be financial agency, time agency or mental/physical agency.

By demonstrating that my thesis worked, I would also be building my track record. 

What is a track record? It is a scorecard of your investments. It is used by LPs (your investors) to determine whether or not you are a “good investor”. Generally, “good” means that your investments continue to grow in value. 

As CEO/Founder of this podcast, I was in charge of sourcing companies, ensuring they fit my thesis, finding times to meet with these companies, coming up with thoughtful interview questions and also running all of the mechanics behind the scenes to make the podcast live. I purposefully chose founders who were Pre-Seed because that is Precursor’s focus and also because it holds the most risk. If I could demonstrate to myself and the world that I could pick Pre-Seed companies that would advance, then I must be pretty good at finding outstanding founders & companies. 

After spending over a year and countless hours on the Be About It podcast, I was privileged to share time with 15 founders — all of whom I continue to be inspired by. Here is how their companies have grown:

Season 1 (2017) Companies

2017: 7 were Pre-Seed

2019: 3 were Pre-Seed and 4 were Seed

2020: 3 were Pre-Seed and 4 were Seed

Season 2 & 3 (2018) Companies:

2018: 4 were Pre-Seed and 4 were Seed

2019: 1 was Pre-Seed, 3 were Seed, 4 were Series A and 1 shut down

2020: 1 was Pre-Seed, 1 was Seed, 5 were Series A and 1 shut down

One thing I wasn’t expecting was my own growth between my first podcast and the second. In Season 1, I learned so much and brought that into Seasons 2 & 3. You can see it clearly in the numbers — Seasons 2&3 had a higher graduation rate than Season 1. 

The portfolio continues to mature and I’m excited to add another to the Series A list with Ribbon! 

The thesis behind my podcast — to find companies building meaningful businesses that provide mass markets access to what previously was held by only a few — is the same one I hold today as I enter into a full-fledged investing role at Precursor with the ability to make my own decisions and trust my gut. 

It’s exciting to enter into this new role with this track record and I look forward to building upon it — with dollars this time — in the coming years. 


The key things that I think are important to building up your track record without money are as follows:

  1. Develop and publish a thesis on what types of companies you like and why
  2. Publicly name companies that fit this thesis
  3. Wait a few years… (I never promised this was going to be quick!)
  4. Follow-up and see if those companies are doing well! 
  5. If they’re not doing well, write an article stating what you think went wrong and start at #2 on this list again.

A few examples of people/organizations that I think have done this well are Ben Thompson at Stratechery and Scott Galloway at No Mercy/No Mallice.


I hope this inspires many of you — particularly those who might not have the accredited investor title or the VC job —  an alternative way to create your own track record ❤ 

Have you also come up with a novel way to build a track record for yourself with limited resources? Or, do you have a company you’d like me to chat with that fits my thesis?

If so, I would love to hear from you! 

You can always reach me on Twitter: @sydneypaige10 or via e-mail: sydney@precursorvc.com


Note #1: More inspiration to everyone building, striving and creating who are also worried about owning their own success 🙂


Note #2: More deep dives into the creation tools behind the Be About It podcast if you’re interested here.


Note #3: There were a few additional founders I chatted with and unfortunately their interviews never made it onto the podcast. I’m still a huge fan of them! I didn’t enter them into the calculations above since I never formally processed their interview. 


Noted #4: Due to technical difficulties, currently, only Seasons 2 and 3 of Be About It are public.

let me know how i can be helpful

If you have taken a look at VC Twitter recently, you might have noticed the debate taking place around this one phrase: “let me know how i can be helpful.

Back story: Many VCs end conversations with entrepreneurs who they decide not to invest in with this phrase. It feels terrible to learn that your startup isn’t going to get money from a potential investor. But it can feel like salt in the wound where the person you just spent 1, 2 or 3+ hours with, gives you an open-ended phrase of “support”. The more generalized the feedback, the less actionable — particularly for first-time founders who don’t know what to ask of investors who have passed on investing in their company.

To help entrepreneurs understand what they can come to me for, I hope in this article to outline exactly how I can be helpful.

I’m your girl if you’re looking for an investor who:

1 Is Obsessed with Customers — Particularly those at the Long-Tail. My entire career has been spent trying to figure out how to serve the “hard to reach”. I think figuring out how to communicate and serve this population is one of the biggest challenges organizations face (the government included) and I have gone through many rabbit holes unsuccessfully trying to figure out how to do this well. I would love to help you avoid some of those!

2 Has a Very Different Opinion than Most Investors. As you might have guessed from my answer to the first point, I have spent the majority of my career in the public sector. I’m also black. I also identify as a woman. I also live in Oakland. I did not go to Stanford. I’ve never worked at Google, Amazon, Uber or Facebook. Can I stop now? Essentially, name one thing that you think most investors have in common and I probably don’t have it. So I’m here for you if you are looking for feedback from someone outside of the status quo.

3 Can Provide Feedback Based off of Employee Experience. I have never started my own company. I have also never been a CEO. This I think gives me tremendous empathy for the employee experience. As you are building your company and have questions around employee compensation, roles & responsibilities and want to think through ways to push back against some of the “tried and true” methods and and want to fundamentally re-think how you can organize your organization that both empowers employees to do their best work and also creates a safe environment, I’m your girl.

4 Has an Eye for Process Optimization. When I first joined Precursor, I had to envision all the ways to create processes for the firm that could scale not to 1–10 companies, but from 1–100+ companies. I love thinking through big-picture process design that helps you identify and build towards the goals you seek. As I have been involved with supporting founders at the Pre-Seed stage, what I’ve found is that the beginning stage of beginning a company is a lot of admin — so much admin. So I am happy and excited to help you brainstorm best practices here.

5 Is Obsessed with Complex Partnership Strategies. I have never worked in an industry where I had only one stakeholder. That sounds like the good life! In one of my first roles, I was in charge of preparing public schools over summer so they were ready to open in the fall. I had to think about the Principals, the students, the parents, the district office and many others. I’m used to making sense of, organizing and processing these complex maps and am happy to help you think through how best to do that for your company.

6 Has Relationships Across Diverse Talent & Investors. I never sought out to be “the only” in venture. I know there are amazing people of color investors, engineers, PMs and founders, and when I first got to this industry I looked to build coalitions to meet and support them. I’m happy to help bring these relationships to bear wherever it can be beneficial for all parties involved.

7 Has Seen Over 100+ Fundraising Strategies. Precursor has grown now to serve a lot of companies. Out of Funds I and II, we have invested in over 100 companies. I have seen a lot of permutations of startup growth — from fundraising strategies, decisions to grow to profitability to shut-downs. From this bank of information, I think I’ve developed a healthy amount of knowledge on how to explore any combination of these steps. Always happy to chat through and guide founders through the buffet of options available to them.

8 Listens a Lot More than She Talks. I love to listen and try to come with an open mind to most conversations while actively questioning opinions and ideas. Talking is less interesting to me because I know there is so much that I have to learn.

9 Brings Her Full Self to Conversations. The experience of building something new, asking for help and working with investors puts founders in a deeply vulnerable position. I am still figuring out my footing in service of founders, but one thing I try not to ever do is to compartmentalize your experience or mine in a way that makes things “easier”. I’m here for the messy, the random and the real-life conversations that creep into the everyday life of trying to do something revolutionary — build something from scratch.

10 Can Get You Some Sweet Software Discounts 🙂 I’m good at getting discounts.

Please don’t come to me for:

1 24-hour Support. I’m human, just like you and need sleep so I can be my best self for you, my family, the Precursor team and my community. I’m probably not the best person to support you if you want to talk to me at 3 am, again at 6 am and then once more at noon. To get the best out of me, expect extremely quick responses from 8am-8pm and a delay outside of those times.

2 Immediate Feedback. I’m a deep thinker and journaler! I pride myself in having thoughtful, well-researched feedback for questions or concerns you might be facing as a founder. To that end, to get the best out of meeting with me, send me a few questions in advance that you’d like to discuss and I’ll come prepared.

3 Sunshine and Fairytales. I am very direct and don’t like to pretend about anything. If you are very conflict-avoidant, I might not be a great fit for you.

4 Anything Bro-y. I just can’t with that life.

Sydney Paige Thomas