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Video interview with Fred Wilson, Partner at Union Square Ventures. Fred has been a venture capitalist since 1987. He currently is a managing partner at Union Square Ventures and also founded Flatiron Partners. Fred has a Bachelors degree in Mechanical Engineering from MIT and an MBA from The Wharton School of Business at the University of Pennsylvania. You can find Fred @ his blog AVC & on Twitter @fredwilson
Transcript follows & video above
- What is your sweet spot, in what kinds of businesses do you like to invest?
We invest in companies that are building large networks of engaged users on the internet.
- What percentage of women startups do you get pitches for? And what percentage have you funded?
When you say women startups do you mean where there’s a woman on the founding team? I’d say probably 20 to 25% of the companies that pitch us have a woman on the founding team.
Great that’s really good news & what about the ones that you’ve funded?
It probably depends on what vintage you’re talking about. I’ve been doing this for 25 years. I think if you look at it over the past year, maybe it’s about the same about 20% of the companies we fund have a woman on the founding team.
That’s brilliant, thank you.
- Have you noted differences with women entrepreneurs in how they pitch & build businesses?
Well I think as operators, there are definitely some differences. I think that women (this is a generalization so it’s a little bit unfair) women typically end up being probably better managers. And maybe a little bit less risk takers?
And just the very fact that you had to think about that makes it probably not such a big issue for you that you’ve noted in the past, I gather?
We don’t have a bias about it one way or the other. Just observing the situations that I’m aware of, just stylistically there are some differences in that regard.
- I know that you do a bit of work in Europe & wondered if you could tell me what differences that you have observed there with respect to the US as regards female entrepreneurs raising venture?
I don’t have a lot of experience with female entrepreneurs in Europe. Of the companies that we’ve funded in Europe, I do not believe that any of them have women on the founding team. But I also don’t think that we have enough of a sample size in Europe yet to be…. I don’t know that you can make any conclusions from that? We haven’t looked at that many opportunities in Europe, so I’m hesitant to suggest that it means anything.
Yes I get your drift, thank you.
- Cindy Gallop, IfWeRanTheWorld, says: ‘I think not as many women as men actively seek VC money because they’re not as tapped into the boy’s network as male entrepreneurs are. Young male entrepreneurs can very easily become the flavor of the month and get introduced around from one VC to another — get the perception going that they’re ‘hot’ and get their funding. It doesn’t happen for women that way.’ Do you think Fred, that networking with Venture Capitalists is harder for women entrepreneurs & have you noticed differences particularly in Europe?
I have a hard time talking about the European situation because I’m not as plugged into what the venture capital community looks like in Europe. Obviously I know who some of the investors are but its not a world that we have a tremendous amount of experience in so it’s a tough thing for me to assess. I do think that the whole assertion that it’s harder for women to network with investors than men is false.
Great, that’s a really good sign. I know that you do attend a lot of events in London or Europe. So I just wondered if you noted if there’s women in those audiences? Is there anything like that?
Brilliant that’s really good
- What do you see as the obstacles for inclusion of women entrepreneurs in achieving funding in Europe? I know probably your experience is more in New York, right?
Well no, we invest throughout the United States & in Europe. I think, obstacles? I think it’s a question of whether or not women believe that they can be successful. I think it’s just a question of changing people’s perspectives on that. I think if women felt that they could be successful entrepreneurs, you would see more women do it.
So we just need to get out of our own way! That’s brilliant!
I don’t mean it in a negative way. I think that there aren’t as many role models out there. If you think about popular culture, whether it’s in movies or tv shows, books or magazines, reading on the web, I think that the role model of the entrepreneur is most often played by a man. And I think that as a result there’s a little bit of a perception that it’s a man thing. I don’t think that’s true. So if we just had more role models & we saw more women being portrayed as entrepreneurs, I think that a lot of this would shift very quickly.
And definitely last year was a very big pivot year, with so many conversations about this issue. So hopefully we are in the flux of that change?
- I read a Telegraph article recently ‘Women in tech are flaky and hopeless, says leading women’s advocate’ from which I quote “The problem with female entrepreneurs is that if you don’t get a financial commitment from them, they don’t show up or they cancel at the last minute,” Obviously this is a UK publication & speaks loudly about the underlying negativity about women in tech that prevails in that culture more than the US. Fred how do you feel about this gross generalization of female entrepreneurs & what has been your experience with women sourcing venture?
That doesn’t sound right to me at all. I think that there is no evidence in the world that I live in that the notion of them is flaky??? That’s ridiculous I’ve never seen it, never thought about it!
It’s obviously one person’s negative view of that interview, I would say!
- Often advice for sourcing venture is equated with dating, implying that there is a matching that needs to happen with entrepreneur & investor. Have you noticed a general psychological profile of venture capitalists and also of entrepreneurs that promotes the attraction & synergy between them to develop a great startup?
I definitely think that it’s very important for entrepreneurs to do their homework on investors in advance of pitching them. And to try & identify investors who will be receptive to their pitches. In that regard I think that there is a matchmaking kind of opportunity. I think the entrepreneur needs to do that though. I don’t think that there’s a lot of good intermediaries to do that for them. There are some but I think for the most part they’ve got to do their homework. They’ve got to figure out who are the most likely investors in their company. Then do their research on them & try to identify the individuals. Do a lot of pre-qualification before going for pitching.
Brilliant thank you, that’s really great pragmatic advice.
- In the dance with an entrepreneur both in the decision making process of funding a startup & then in working with those startups what are the necessary qualities that make a good venture capitalist. Some of the talents mentioned: Would you trust your gut instincts & feelings that happen within the relationship with the entrepreneur as signs about what’s happening in the business, in the startup? Or would you ‘manage by influence or persuasion?
I think about it a little differently. My feeling about what entrepreneurs need to find in investors. They need to find people who are as excited & enthusiastic about their business as they are. People who believe in the opportunity & are as excited about the possibilities. And are committed to the success of the venture. You don’t want someone who’s cynical & negative. You want someone who’s positive.
Yes, fantastic, that’s really great. Thank you again Fred for your time. I know it’s very precious & you’re very busy.
I appreciate it. Bye