Beth Seidenberg, KPCB: Training in Venture Capital Success for Women

Transcript follows & video below.  This is Part I of the interview. You can view Part II here

What kind of themes do you like to invest?

I’m a Life Science investor & so my focus is basically on patients with severe or unmet medical conditions.

Beth Seidenberg

I was interested when I read your profile because you also have some interest in AIDS?   I did work many years ago in the AIDS crisis in Melbourne.  I was a therapist in those days & worked one to one with men who were dying.  So I have great respect & any help in that area I think is fantastic!

I do!  Well that was the area that really got me focused on research & innovation. When I was in Medical School the AIDS virus, HIV, was not defined. It was in the late 70s & we were seeing a lot of men & women immigrants, who were coming over with bizarre diseases & things that we hadn’t seen for years.  Opportunistic infections & we were seeing a lot of tuberculosis & I became interested in Medical School.  The rest of my career has been focused on that passion which started out with that experience in Medical School & then ultimately doing a Immunology & Infectious Diseases Fellowship at the National Institutes of Health with Tony Fauci & a lot of the basic researchers who identified the HIV virus & then the first therapies for HIV. The message is follow your passion!  If you really see something that there is a need & you think you have the talent to contribute, go for it!

Beth Seidenberg

Good work, I’m so glad that you are doing what you are doing!  What do you look for in women entrepreneurs & startups that indicate interest to you in investing in their businesses?

Well what I look for is a great entrepreneur & I don’t really distinguish men or women.  I think that at the end of the day when you really focus on who to back, first the passion piece has to be there. A lot of times women are more open about their passion & that’s a good thing because you really know what is motivating them. You need to have the technical expertise as an entrepreneur in order for us to be interested in backing that person.  The best CEOs & entrepreneurs in general are people that really have an area that they are well trained in & have a unique idea & insight.  If they can communicate that & have a good business & market (we don’t really take market risk here) so there has to be a clear articulation of what the opportunity is. If those elements come together then usually its backable for the entrepreneur.

Beth Seidenberg

Advice for pitching for venture is often correlated with dating.  What sort of chemistry makes for a good match & is a success for both entrepreneur & venture capitalist because obviously you’re going to be working together for a little while at least?

Yes & on the Biotech side that I invest in, it’s years!  So we have to assume that when we are investing in a company that we may be married to that company & that investment for 5 to 10 years.  And so chemistry does matter, it really does!  What I look for is back to the passion component, expertise.  I really am attracted to people who are deep technical experts & also know what they don’t know.  The hardest thing for us as venture capitalists is we have an entrepreneur who may be passionate & has a good idea but they’re not aware of their gaps in knowledge or their skill set & are not comfortable articulating that. It’s very difficult to back someone like that because you need complete transparency.  You need to know that people are honest & open.  Actually the most important characteristic when you’re thinking about working with somebody moving forward is that they are very comfortable communicating bad news very quickly. And you find that out when you’re meeting people & you go through our process which takes months.  Sometimes a year before we’ll invest in a company, you get to know people & things never go according to plan.  It’s the ones who are willing to tell you that & be a little vulnerable that end up being people we’re really comfortable working with.

Beth Seidenberg

So part of your process actually weeds out the people you’d be able to work with & those you wouldn’t be?

Absolutely, absolutely!

Beth Seidenberg

That’s sort of good that it’s built into the process in a way?

It certainly is, for both sides!

Beth Seidenberg

Both need to know that that’s going to work for them.  In your experience are there many women entrepreneurs that are unsuccessful in sourcing venture?   We already know that the percentages of women who are successful are very low.

I don’t know those statistics of women versus men. But what I do know is that the ability to succeed or the success rate is extremely low for everyone. It’s just a very risky business!  It’s called venture capital for a reason, so you have to have risk tolerance to be in this business for sure.  But I think that the elements that usually lead to failure are not gender based.  They’re more based on a couple of areas:

1) know your market & go for technology or solutions that address a unique market need

2) technical success & in the biotech business we have a very low probability of success (it is what it is).  So the way to address that is to try & diversify & have a portfolio of opportunities as opposed to a single shot on goal.  Those single shots on goal are very risky in any business that succeeds. It’s often not the first idea or the first try but its the persistence.  It’s having a good idea & a clear market where you can iterate a few times & eventually you’ll succeed.

Beth Seidenberg

So the creativity & the flexibility are quite high up there as values for an entrepreneur?

Absolutely, if you’re not its going to be really hard!

Beth Seidenberg

I agree actually.  What can women entrepreneurs/startups do to increase their chances in sourcing venture?  You have actually covered that, is there anything else that would help women?  You haven’t identified any failings or weaknesses that women have, but some people have fed back to me that women’s innate strengths in some areas can become a weakness when they’re sourcing venture.  Things like lack of confidence & not so assertive & possibly not so risk averse that are often generalized as qualities that women may not have?

So let’s talk general & then some specific. On the general side some of the viewers of this video may be a skier or some kind of athlete?  I often find it’s easier if you can relate to something.  I love to ski & I’m a risk taker, I’ll go for the steep runs every time that’s why I’m a venture capitalist.  But some women aren’t comfortable with that.  So I would say the way to think about it, if you want to ski successfully, you have to have a couple of things.

1) the conditions have to be right.  If you go out in a whiteout, it doesn’t matter how good a skier you are, if you can’t see more than 10 feet in front of you, forget it.  So make sure that you understand the environment around you & that the conditions are right!

2) You have to have the right equipment & if you have skis that are a decade old & really long instead of short these days or your boots don’t fit you properly, you’re not going to ski well.  So make sure when you’re putting together a business plan or putting together an idea that you have all the right equipment.  What does that mean, a clear understanding of the market, the technical risks & the team that you need around you to succeed.

3) If you really want to be a great skier, you have to be a great athlete.  So you may not be good in everything, but if you work hard & if you practice a lot, you practice a lot you’ll become a better skier.  If you’re not great at certain things, let’s say you’re skiing on a team & you’re not great a moguls, then you’d better hire someone who’s great at moguls.  So if you keep those elements in mind, I think that helps a lot.  Women have different characteristics that are good & bad in general right.  There’s definitely a lot that’s carried on the xx chromosomes that’s a good thing, I think. So one of the things that we get with the xx chromosome is that many women are more comfortable with the emotional side of things & are able to feel situations as much as they can think them.  Being able to feel situations often times makes you a really good leader because you have that emotional connection to your project & to your venture capitalist & to your team, your company. I think that’s an element that can be really powerful for a woman.

You mentioned that sometimes women are not as assertive & they may not ask for what they want?  Men are really comfortable, this is just in general. I have three sons & my husband & I have a female dog.  That was a mandate, it has to be a female dog to balance the household.  But I watch my sons & my husband & they are never afraid to ask for what they want.  And I find even in myself & other women, that we tend to be tentative.  We tend to wait for somebody to ask us or we tend not to be as bold in what we ask for.  Be bold, ask for what you want, ask the hard question.  If you don’t, you’re not going to get what you ultimately desire.

Beth Seidenberg

Some entrepreneurs have fed back to me, that some women don’t like to ask for money & I said well that’s a really big stumbling block because if you don’t like to ask for money, you’re not going to be able to go for venture capital.

That’s right, that’s right!

Beth Seidenberg

So it’s I’ll do it myself or some old pattern that we must have ingrained?

Exactly, ask for money, it’s ok!

Beth Seidenberg

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