Those who met me when I got my start in venture almost 6 years ago, probably remember the bright eyed bushy tailed Sydney. Back then, I told everyone who would listen that I was intent on starting my own fund one day. I initially said that it would be within 2 years of my venture career, then 2 years became 3, 3 became 4 and eventually the itch to start something of my own dulled into a feeling that most days I could forget, if I didn’t think about it too much.
What I realize now, was that as I uncovered the complexities required to start a fund, I got scared about what wanting more for myself would cost. Scared that I couldn’t build the type of fund that I wanted to authentically, scared that I would make a mistake, scared that it was all too much for me to take on.
That changed in 2020.
The reckoning that venture underwent that year and in the years since cannot be understated. White women, Latinx people and Black people are launching a new generation of new funds, and every few months it seems, a new barrier is broken. Getting a front row seat to this radical shift has been a privilege. From the first $1B Black owned fund to the largest woman founded firm, the world is changing in front of my eyes and the “no limits” mantra is truer than ever before. Additionally, since 2015, the barrier to entry in venture has continued to fall – thanks to organizations like Carta, Angellist, Flow, Allocate, Recast, Raise, Bridge, Coolwater, Strut and others – and I am watching new entrants do things their own way. The stronghold that the old (white) boys club had on the venture ecosystem is loosening.
The movement gave me so much hope and pushed me to think critically about what I wanted in my venture career again. Once I started leading my own deals and working directly with founders who I admire, the flicker in my belly officially transitioned to a flame. I was so inspired by them! The founders who I get the privilege of working with are putting their livelihoods on the line to build new institutions that serve the communities they care the most about. Why aren’t I doing the same?
I’m so excited to reimagine what is possible for myself once more. #LFG
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.
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.
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 email@example.com.
Thanks for reading! Looking forward to continuing to share more about my experience in the program over the coming months and years!
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
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.
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.
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!
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 sad truth about this wave of media reckonings is that it feels way too late — so many talented Black journalists and media creators chose their sanity and moved on. grieving for all their careers / stories.— Jenna Wortham (@jennydeluxe) June 9, 2020
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.
“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.
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!
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:
Develop and publish a thesis on what types of companies you like and why
Publicly name companies that fit this thesis
Wait a few years… (I never promised this was going to be quick!)
Follow-up and see if those companies are doing well!
If they’re not doing well, write an article stating what you think went wrong and start at #2 on this list again.
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: firstname.lastname@example.org
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.