Rachel Sheinbein, CMEA: Women’s Collaborative Style can Succeed in Venture Capital

Transcript follows & video below

I was wondering what themes & sweet spots you have when you’re investing in startups?

Ok well I am part of the Energy Materials Team here at CMEA. We have a Life Science & IT practice as well but I focus on Energy & Materials. I have a broad range of investment areas. I started my career in water & waste water treatment so that’s an area that I’m still interested in. I’m on the board of a solar company named Solaria ;a company in the wind, components for wind Danotek  & a biotech company called Arcadia BioSciences  I’m also involved with batteries, I look at storage a lot. We’re very interested in grid scale storage as well as the same areas we’re in. We’re still looking at solar, still looking at wind & also doing some things with waste water. So all of that range!

Rachel Sheinbein

It’s so great, it’s really helping the environment then. It’s a great cause.

Yeah I started my early career as a chemical engineer. I was interested in environmental efforts & worked mostly at Intel but I was in their waste water treatment than in their energy & environmental group. We were tracking global warming gases & all these types of emissions in 2000 & did not know then that it would turn into this whole industry build out. Obviously at that time we were just a cost center, not something that people thought they were going to make money on. But that has really been a big shift over the years & it’s great to be back again with that focus.

Rachel Sheinbein

Pioneering that stuff, that’s great. Would you have any advice for women entrepreneurs or female startups who are wanting to get in or are involved in these industries? What advice would you give them as regards getting venture capital?

Yes so I think a couple of things. One, I would definitely take advantage of any kind of networking opportunities. A lot of this is meeting people in more informal environments & getting feedback. I think Astia . (I don’t know if I mentioned that I’m CoChair of the Clean Tech Committee for Astia?) They have a really phenomenal program. Obviously I’m clean tech open from a business plan perspective & getting that in shape especially, if this is your first time in the industry or as an entrepreneur & going through some of that can be really helpful. Then there’s other Astia-like programs focused on women but many of them are more IT & Tech related whereas Astia is building the actual Clean Tech focus. Also get involved if you are in Solar, there are a lot of solar networking groups, depending where you’re located maybe in the other sectors as well.

So the networking piece is the big piece, you feel, that could leverage a female entrepreneur into sourcing or raising venture?

Yes obviously there’s a couple of parallels for venture capitalists as well as the entrepreneurs that I’m working with. There’s some themes & I’m actually working on a blog on this: What does an entrepreneur look like in the energy space or energy materials? That may be a little bit different than in IT? For instance, in IT we have a lot of technical leaders that continue to innovate. But in Energy, what I’m seeing more of is people that have some kind of commercialization experience. So a lot of them are still technical so that helps in credibility depending on what kind of business you’re running. The technical piece is really useful in our industry but then on top of it is: How do you Work with customers? How do you have, not just integrity, but credibility, because you’re really dealing with an incumbent industry? I’m writing that out in more detail. It’s something that I’m noticing a trend among our successful companies.

Rachel Sheinbein

And being a woman venture capitalist, would you have any advice for any women that are interested in becoming a venture capitalist or getting into the venture industry?

Yes I try to think a lot in this job: Why is there a dearth of women? Because a lot of what we do is stereotypically a women field such as we’re hiring the CEOs & sometimes dealing with firing which is associated with HR. This is often where women are in a company but for some reason we’re not. And facilitating relationships, that’s a lot of what we do once we invest. Relationships to get into deals. They’re not skills that should be gender biased per se. But what I’ve noticed is especially in Energy Materials, most of the investors in the space have a technical background & technical degree. We know the stats on that, they’re low & as you know I’m on the Board of Expanding your Horizons, a non profit that encourages girls in science, technology, engineering & math. So we are losing girls up front. That program targets 6th & 9th grade & we’re all over the country, about 25,000 girls go a year. But what we’ve seen, for instance Biology PHds 60% are now being awarded to women is about the numbers that I saw last. Unfortunately Computer Science which goes into the IT field we’ve been coming down. We’re now in the teens again. Electrical Engineering & Chemical Engineering the numbers are even more abysmal. So that starts with this pipeline problem.
Then I would say it’s a little bit about the network: people pull from who they know & they pull often former entrepreneurs. Who are those entrepreneurs? They’re men! I’ve seen entrepreneurs who are successful, all of a sudden get 2 or 3 recruiting calls from vcs. If there aren’t women to pull from & to run these companies? Often on our boards we’re pulling former CEOs for independent seats. That’s a pull of men as well. In some degree it’s a matter of awareness & maybe a little bit wanting to seek out that diverse opinion. I think some boards & some leaders are seeing the importance. There are some good stats, Cindy Padnos has said companies are more profitable with women on their board. There’s some movement. But I think Venture, we have to work on the pipeline & then we also have to work on getting into the network & then also promoting women once they’re in there to really support that & give them the confidence.

Rachel Sheinbein

I think that’s right. I’ve heard that to pull women in, you have to be consciously searching that out because it hasn’t been part of the routine or part of the focus. Just changing the awareness!

Right with my background, I never planned to go into venture. Someone called me up & said you should apply & I thought ‘Really, I’m not in investment, I have an operations & manufacturing background with an MBA?’ I had the credentials but I just didn’t see myself. One of the things that I really credit, which Sheryl Sandberg is doing right now is really thinking about some self awareness in our own head of what we’re doing to hold ourselves back in a way. It’s just an awareness problem! “Oh I did that. I wouldn’t have applied because I thought I wasn’t qualified. Why am I telling myself that?” I’m not putting it wholely on that, as I think there are whole bigger issues, systemic issues but that’s another piece that we can overcome & address. In this job I have great autonomy to do the deals I want to do to make my company successful. I’m the only one holding myself back if I don’t go out & do that!

Rachel Sheinbein

What would you say are the real challenges in being a female venture capitalist?

I’ve never been more aware of my gender in my career! I was a chemical engineer working in the subfab or under the factory at Intel with all male technicians. But for some reason in this, it’s finance related or a bunch of really smart ambitious people, it’s become much more evident to me, the bit about my gender. One thing is there is a bravado & competition among vcs, getting into deals or having the connections or relationships. I came out of Intel, a very intense environment but very collaborative. I always felt that you’re rewarded for win/win: everyone can win! (Well maybe I naively felt that way?) But here I’ve noticed there is more of a lone wolf mentality, a little bit of celebrity, personality branding. But I have to say that I’ve been rewarded for sticking to my personal style & way of doing things. I always feel if someone has great skill set in finance, why wouldn’t I have them help me with due diligence. Or if someone did IP & ran an IP related company their whole career for due diligence why wouldn’t I bring them in for that? So my style can work too, even though it might be different than what is typical in this industry. I don’t think there is one way of being successful! If we knew that only these type of people are successful, then we would all not be doing that, we’d be following exactly what they’re doing.

Rachel Sheinbein

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