Of the top 100 ranked venture capital firms in the world in 2016, women made up a mere 7 percent of partners. That means that just 54 out of the 755 partners at these venture firms were women, a number underscoring the tech industry's notorious reputation as a boy’s club. Just as the industry has work to do on gender diversity, so too does the sector funding innovation — though there are plenty of women angel investors and VC partners from Boston tech kicking butt. We caught up with three women at various stages of their investing careers to learn about the unique perspectives they bring to the table and what they look for in potential investments.
Natalie Bartlett serves as an associate at General Catalyst, which to date has managed eight venture capital funds totaling approximately $3.75 billion in commitments. She focuses on early-stage ventures.
How did your career path lead you to venture capital?
I had an unusual path into venture. Out of college, I went straight to graduate school at the Harvard Graduate School of Education. I was interested in the intersection of learning theory, organizational behavior and new technologies. It was here that I got to know Peter Boyce II at Rough Draft Ventures, and was excited about the program (a startup accelerator that empowers student founders). I saw entrepreneurship as a mechanism for fostering better learning objectives across higher education. Through building out that program over the last four years, I've gained perspective in investing in early-stage companies and have taken on the role of an associate on the investment team at General Catalyst.
What do you look for in potential investments?
I look for persistence and dedication in a founder to work through a challenge or problem he or she sees in the world based on a personal connection. This could be something that the founder experienced, witnessed or cannot get his or her mind off of. When assessing opportunities at the earliest stage, there is so much weight placed on the founding team, and I am intrigued by the psychology at play that leads to a founder's determination and perseverance.
What do you bring to the table that other investors don't?
Through our work at Rough Draft Ventures, we collaborate with top students at universities in Boston that are either creating game-changing businesses or are looking to contribute their talent and passion to an emerging start-up. We actively work with portfolio companies to connect them with motivated and talented students. Hiring and team building is such an important component of what determines the success of an early-stage company, and I'm excited to play a large role in in this aspect of company building.
What's a misconception the tech industry holds about women VCs? How do you overcome that?
A common misconception about women VCs is that most are interested in only backing either female founders, or companies that are focused on female customers. While there has been an emergence of female-focused funds, and an impetus to fund more businesses focused on the female population, women in venture back all sorts of businesses — from B2B, security, infrastructure, etc. I believe the best way to overcome this is to continue showcasing and talking about the partnerships between female VCs and their portfolio companies that span industries and diverse markets.
What's the best piece advice you would give to women entrepreneurs and women interested in becoming investors?
I have found that many leaders in the industry both male and female are huge advocates of helping women enter VC and start companies. My advice is to find advocates and build close relationships with them. I've found these supporters both in my mentors at General Catalyst and in groups I am a part of such as Parity Partners. Working closely with these champions has provided me with motivation and confidence to perform at my best and support others in the field as I continue my career.
Katie Rae is CEO and managing partner at The Engine, a venture fund and incubator that focuses on “tough tech” — think technologies like robotics, materials science and energy that typically have a hard time finding VC funding.
How did your career path lead you to venture capital?
I’ve been involved in entrepreneurship for many years, especially in the Boston area. While I was head of product at Microsoft Startup Labs, I was involved in doing very early-stage investments. Later on, I was managing director of TechStars Boston for many years, and co-founded Project 11 Ventures as well as Startup Institute. Over the past decade, I’ve advised and invested in over 100 startups that have gone on to raise more than $400 million in total.
What do you bring to the table that other investors don't?
With The Engine, we want to be a home for tough tech founders. Tough tech companies have historically been underserved and underfunded, leaving many breakthrough inventions stuck in the lab. With The Engine, we’re building a first-of-its-kind organization with a mission to focus exclusively on founders working on tough tech. The Engine aims to transform the status quo venture ecosystem and to make Boston the heart of tough tech innovations.
What's a misconception the tech industry holds about women VCs? How do you overcome that?
That there are no women VCs. There are many women VCs, especially in the deep science space. Putting a spotlight on the incredible work they are doing will be instrumental.
What's the best piece advice you would give to women entrepreneurs and women interested in becoming investors?
Start by getting out and meeting other investors. Help founders. Be helpful to other investors.
What do you look for in potential investments?
At The Engine, we try to look for amazing founding teams that are going after really big societal problems but that could create huge businesses. We want to help founders bring tough-tech scientific discoveries and technologies to their largest possible positive impact by commercializing them at scale.
Holly Maloney McConnell is managing director of General Catalyst. She is the first female managing director the firm has ever hired. At GC, McConnell focuses on later-stage companies across sectors and geographies.
How did your career path lead you to venture capital?
I started working with growth-stage technology companies immediately out of undergrad (Bowdoin College), with AGC Partners. AGC provides mergers and acquisitions and financing advisory services to companies across technology sectors, but many were focused on both application and infrastructure software. My time at AGC was invaluable — learning about different business models, market trends and dynamics, valuation methodologies, and how to understand, dissect and market the company value propositions to the logical investors or buyers. I found passion in building trusted relationships with executive teams, helping them strategically assess their business, and guiding them through a transaction, but I wanted to be the one making the investment decision and partnering with the company, rather than transactional advising. I joined Guidepost Growth Equity (FKA North Bridge Growth Equity) in 2010 to invest in tech and tech-enabled services companies who were already successful (generating meaningful revenue) but saw value in bringing on a partner to help get to that next level, and take advantage of the big market opportunity they were addressing faster.
What do you look for in potential investments?
Exceptional management teams, large addressable markets that are ripe for disruption, predictable revenue streams, attractive unit economics to drive growth, capital efficiency and terrific customer service.
What do you bring to the table that other investors don't?
My perspective is my own, and that in and of itself is unique. I take the time to deeply understand the end markets in which my portfolio companies operate, which adds value to many strategic conversations. I focus on building trusted relationships with management teams even prior to investing, which should lead to a strong, open partnership. The more open and transparent a partnership is, the more aligned the investors and executive teams should be regarding the direction of the business. I always follow through on my word, and can promise to bring a bit of sarcasm to the room.
What's a misconception the tech industry holds about women VCs? How do you overcome that?
A common misconception is that women do not naturally gravitate toward engineering or deeply understand the frameworks that create the foundation on which these companies are built. And therefore, they will never understand the business as well, so cannot be as helpful as investors. While I will never know the technology better than the entrepreneurs themselves, I can quickly communicate my understanding of their value proposition, how their technology fits into the overall market, and why I think their approach, specifically, should be successful. Having a holistic view/understanding of a business (of which the technology architecture is a piece) matters most as an investor and partner.
What's the best piece of advice you would give to women entrepreneurs and women interested in becoming investors?
Clearly understand your strengths and play those to your advantage in every situation. Define the leadership style that highlights your strengths and hire great people around you that fill in the gaps where you have weaknesses. Strong and successful leadership will inspire other women to assume leadership roles as well. Hire and mentor other outstanding women as often as possible.
