Jason Mendelson, Foundry Group: Women and Venture

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

What is your sweet spot, in what kinds of businesses do you like to invest?

We’re early stage investors which means anything from seed deal for $100k to a traditional series A & write a cheque from $8 to $10million. We invest nationally across the United States, we don’t do international. We’re along software IT, we have a number of investment themes we invest in. Instead of sectors like many venture capitalists invest we look at the world horizontally. Human computer interaction, for instance, is one of our themes, which is easily to say ‘What is the next 20 to 40 years interactions between humans & computers look like?’ ie the mouse & keyboard are dead & what similar technologies & companies can be built under those themes.  Themes like digital media, digital life, glue which is underlying web app architecture distribution.  We have a whole bunch of different themes in which we invest in.  But the easy way to put it is that we are software IT guys who do early stage stuff.

Jason Mendelson

What percentage of women startups do you get pitches for?  And what percentage have you funded?

So its a small number.  It’s not from a lack of trying. I guess what I’ll preface is this, all of us are very active in trying to help everybody to create startups, women the same.  My partner, Brad, is the chairperson on the NCWIT Board which is the National Center for Women & Information Technology.  It is located in Boulder, believe it or not.  So the pool is small.  We recently just closed a deal with a woman cofounder.  Her & her brother founded it, called Triggit. So we have a brother/sister team, they’re in San Francisco, we’re very excited.  Traditionally we’ve been together ten years, in the past we have about half a dozen companies that have been founded by women.  One of the companies called Oblong that we funded, one of our first investments, 25% of their engineers are women including 2 of the 4 executive staff.  The other thing to note is that we were founders of a program called TechStars,  the accelerator program that is now here in Boulder, Boston & Seattle.  And after the first year, when there were all these geeky men running around the place, we really tried to put forth an effort to recruit more & more women.  And we’ve had about 2 or 3 teams every year now that have been founded by women.  And ones that have gone on to raise venture funding.  The stories are still too early to see whether these will be successful companies given that TechStars is such a new program.  But it definitely has been part of our outreach program.  The general manager of the Boulder program is a woman now so we also think that that is going to have a good effect.

Jason Mendelson

Wow sounds like you’re doing some great work there!  Have you noted differences with women entrepreneurs in how they pitch & build businesses in comparison to men?

Well you’re assuming that I can actually group the men into a stereotype?  It’s really a hard thing to do.  I don’t think from a pitching standpoint that I have seen any difference.  It’s kind of good or bad.  To me I’m judging more on transparency & directness & a whole bunch of other factors.  Whether it’s racial, sexual orientation, cultural  whatever you have, I haven’t really seen anything that I could say ‘Wow when I meet this person, they act like this.’  Maybe the only group I could generalize is ‘really old white guys’?  But other than that everyone else has kind of their own voice.

Jason Mendelson

Cindy Gallop, Founder of IfWeRanTheWorld, said in a  recent Faster Times interview : ‘VCs fund in their own image: white, male. The cycle is self-perpetuating, so (predominantly male) VCs have a preconceived notion in their heads of what they think constitutes the kind of entrepreneur to back. John Doerr apparently said, ‘If you’re a white, under 30, tech geek with no social life and a Harvard/Stanford dropout, line up for VC money.’ He didn’t say ‘male,’ but he might as well have. If it had been a 17-year-old Russian girl who came up with ChatRoulette would there have been as much interest in funding whatever she might do next?’  What is your take on this Jason, & if this is happening how can women startups find an opening in this culture?  I understand within your firm this doesn’t happen, but obviously it’s happening outside of Boulder?

It’s hard because I will say that I’m happily separated from a lot of that, being out here.  I also think that an early stage investor may have it differently.  Let’s look at it a couple of different ways.  Let’s look at it 1) Geography 2) Stage of Investment 3) Let’s really try to address your question.

  1. I think geography, when you’re in a 2nd tier market like we are, it would absolutely be insane to look in the mirror & say that’s who I’m going to fund.  Because if you’re going to start the best companies, you need to be a mercenary & invest in the best people.  It doesn’t matter what race, color, creed, nationality, sexual orientation, sex, it doesn’t matter!  And we’ve funded plenty of companies that fit all of these different diversity buckets.  It’s really a question of what your pool is?  Here in Boulder we have a lot of white people running around the place!  It’s not the most culturally diverse, I think it’s more diverse on a sex basis between people in the system.  I think that things like TechStars & NCWIT really helped to build that.
  2. The other thing as far as early stage investor is that you’re really basing your idea on somebody who has an extraordinary idea; to whom you feel committed that is a good person that can run this.  But you’re not necessarily looking for the person who has run 5 or 6 companies, right.  If I was a late stage investor there maybe a bias towards somebody who looked like me because we’ve invested in a whole bunch of CEOs who can run this.  I don’t even know because we don’t play that game.  But the really early stuff you just invest in the best ideas with the best people & you are blind to that, I think.
  3. I’ll go back to that the pool of candidates is less than I think anybody would want. If you look at the original computer scientists they were all men & we are still dealing with that legacy.  Frankly we are seeing a great influx of Asian cultures coming into computer science as well.  They’re making huge gains!  And they’re are programs like the Carnegie Mellon Computer Science Program that’s run out of the EA Campus in Silicon Valley .  More than the majority of the people that were in the class last year, I went & guest lectured were from Asian backgrounds.  But there were a lot of women & that was good.  In fact one of our companies hired one of them recently in San Francisco.  And one other thing to address the 17 year old dropouts comment that was made, it seems cute & its laughable.  But I don’t think anyone could seriously take that as the real blueprint for how to succeed with venture.  And as far as ChatRoulette goes, I have absolutely zero kudos for it, so I couldn’t be less excited about it.
Jason Mendelson

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