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Video interview with Patricia Nakache, General Partner Trinity Venture. Since joining Trinity Ventures in 1999, Patricia has focused on funding companies launching innovative online consumer and business services. She is particularly interested in the impact of social media and mobile on the next generation of Internet services. Prior to Trinity Ventures, Patricia worked at McKinsey & Company helping enterprises in technology, financial services and retailing address their strategic and operational issues. Previously, she also contributed to Fortune magazine and other publications on management best practices in technology companies. Patricia is a member of the Stanford Business School Trust Investment Committee. You can find Patricia on Twitter @pnakache
Transcript follows & video above.
- Which themes do you like to invest, what is your sweet spot?
Yeah you know one theme that I’ve been spending a lot of time on over the last couple of years is what I call the Woman’s Web. So leveraging the fact that women now spend much more time on social networks than men, are spending more time online. In fact in terms of socio economic activity, the web is starting to reflect the real world offline. So I’ve invested in a bunch of companies along that theme Care.com which is a marketplace for care services, child care, elder care & pet care. Last year I invested in a company called Thredup which is an online exchange for secondhand kid’s clothing, it’s all based on flat rate ratios because its in boxes. Last year I invested in Beachmint which is a subscription service for jewelery $29.99 a month, pick a piece of personalized jewelery. So that’s the theme that I’ve been pursuing & really feel like the wind’s at its back. Just related to that, have also been spending time in the social web in general.
It is interesting how women are really taking up the web. I remember when Farmville really hit the scene, they said that there were more women playing that game on facebook than men.
Absolutely. That’s one of the things that I find so exciting about this theme of the Woman’s Web, is that when you look at Zynga or you look at Gilt or you look at Groupon , the 3 big themes on the web, their success is largely driven by women. So the female consumer is a really important consumer. I think figuring out what her needs are & building products & services around those needs, I think there’s gold in those hills!
And the best people to do that is women, to work that out really!
I do think that women have a more intuitive sense for those needs. But I would say in all fairness, when I look at a company like Thredup that I mentioned, founded by 3 men. Actually until recently none of them had children. The founder & CEO has a child now. I wouldn’t say exclusively that it’s the domain of women but there is an advantage.
- What do you look for in women entrepreneurs & startups that indicate interest to you in investing in their businesses?
I’m not sure that I look for anything different than I would for male entrepreneurs. I mean clearly have they identified a big needy problem that represents a significant market opportunity. Do they have relevant domain expertise to go about tacking that problem? Have they built a great team or surrounded themselves with great people? Have they developed an innovative solution for approaching the problem & does that involve some technology that is defensible? Then finally have they demonstrated any traction yet? It’s mainly the same criteria that I would use in talking to male entrepreneurs.
So that’s great there’s no bias at all is what I’m hearing.
For me, I don’t think so!
- What can women entrepreneurs/startups do to increase their chances in sourcing venture?
I think the number one thing is networking. The reason I say that is that we are much more likely to invest in an entrepreneur that we have some history with or have gottent to know over a period of time, rather than an entrepreneur that we meet for the first time a week before they’re expecting term sheets. That’s not to say that we don’t do that but we’re much more likely if we’ve had an option to get to know that entrepreneur, see how they perform over time or if somebody we know has the relationship with the entrepreneur (somebody that we know & trust). I think it can be one step removed. But it just comes down to, I think an entrepreneur should think about fund raising not just in the moment when they need to fund raise but over a long term relationship building process. Just getting to know a lot of people, particularly in & around the venture world so that there’s almost more leads. By the time they really do want to fund raise, they’re in that window they’ve got a bunch of warm leads of people they can go talk to that they know at some level.
I think from the other side, from an entrepreneur’s side definitely would change their level of confidence & their ability to pitch as well, I would imagine?
I think that’s right, because I think that meeting people in a more informal setting allows you to surface a lot of the objections & understand where an investor might be coming from in their position & be prepared. Frankly it’s good feedback, right? If you’re incorporating in your business what metrics you should be tracking, what investors care about. I think in those informal settings, you may be more likely to get really frank feedback than in that moment of the pitch? Maybe? I’m not saying that it’s always true, but I think that it’s possible that would be the case.
Sounds very fertile soil, I would imagine?
- What sort of challenges do women face if they become a venture capitalist?
I think some of the challenges are similar to what women face in any profession. There’s a style challenge: how do you be assertive without being perceived as a bitch? How can you be warm without appearing soft hearted? Finding that stylistic sweet spot that everybody is comfortable with & you can appear assertive in a board setting & not have negative repercussions. Then also how do you show warmth without being perceived as too feminine. So I think that that’s true in other professions as well. It’s not unique to venture capital. The other thing, given that networking is super important both for entrepreneurs & venture capitalists, one of the challenges is that some networking venues are more or less comfortable for women. Finding ways to network effectively that are comfortable for you as a woman venture capitalist, I think are important.
- What needs to happen for venture companies to employ more women venture capitalists?
I think that’s a chicken & egg question. To answer that question, to start with where do women venture capitalists come from? Where do any venture capitalists come from? Typically these days they are recruited out of startups, successful startups. Or they’re a senior executive in a large technology company. Those are the 2 major places they come from these days. So I think to have more women venture capitalists, you have to have more women who’ve been successful entrepreneurs. Or women who’ve been senior executives in technology companies. So that is one mode. Then I think some venture firms have more of a tradition of nurturing, more of an apprenticeship model where they’ll take bright people with a small amount of experience in a startup or some experience in a large technology company. Then will nurture that & train them. Trinity for example we do both. We hire people who’ve been successful CEOs out of industry. then we also hire people right out of business school & then we promote them from within. We do both models. So I think to have more women venture capitalists, we need more women who are in those senior positions in technologies. Or they could actually be at more junior levels in startups but then there would probably be more of an apprenticeship model.
OK & it probably starts even further back because apparently figures have dropped 30% in the last 10 years of women studying technology subjects. Organizations like Anitaborg & NCWIT are trying to encourage young girls to study technology.
Yeah I totally agree. You’ve got to take the pole back to it’s root, yeah.