Let me tell you how lucky I am…
Last year, I served on the planning committee for Stanford’s Black Business Student Association Gala. We decided that instead of having a traditional keynote speaker, we’d host a fireside chat. We wanted someone who not only had done amazing things in her career, but also would be an inspiration to Stanford’s audience of black students and accomplished alumni. Enter, Lisa Lambert.
As I sat watching her expertly answer questions from the moderator, I thought about how I’d never seen a black women investor—at least not in real life. I mean, at this point, I’d read about a few women and seen lists of black women investors…but she made it real. She discussed her journey from working as a Product Marketing Engineer at Intel, to becoming an investor at Intel Capital, to now serving as the Managing Partner at the Westly Group, a clean energy technology fund on Sand Hill Road. It was during that moment, on a chilly night in February, that she marked the tipping point in my seriously pursuing venture capital.
A few weeks later, I reached out to her in a long, detailed email about my plans to become a VC and how I would love her advice. In typical, super-busy, concise VC fashion, she replied, “Sure, glad to chat.” and referred me to her super helpful EA. Our call was wildly encouraging and I’ve felt comfortable enough since then to reach out on quite a few occasions for advice and direction. She’s become a trusted advisor as I navigate this new space and I was happy to connect with her while at Tech Crunch Disrupt for my blog. And the fact that she was a judge for the Startup Battlefield competition definitely proves that she is truly the epitome of “A Black Girl in Venture.”
See our interview below! As usual, I removed all of my “ummms” and “ahhhhs” and other random fill words and sounds for readability. Enjoy!
Megan: Thanks so much for meeting with me today, Lisa! I really appreciate you sitting with me before judging. Can you tell me a bit about why you think it’s so important for you to be a part of the judging panel for Startup Battlefield and what are you most excited about today?
Lisa: The thing I love most about going to conferences is that you can see a lot of innovative technologies. You meet great entrepreneurs with a lot of zeal, a lot of passion. They’ve honed in on something that's important, that they have a lot of personal experiences with, and are trying to solve. And so, you get some insight into what motivates them. They are trying to solve real world problems and it’s very inspiring. And I’ve participated in VC judging at many conferences and Tech Crunch Disrupt is one of the most innovative. They are getting a variety of technologies from biotechnology, enterprise software, security companies, and a long list of consumer products. [Disrupt] is very diverse; they bring high caliber talent. You look at the speakers and the judges, these are people that have been in the business for quite some time.
And I think it’s good being part of something like this—so much energy and so much innovation. And I get to help select the winner for Battlefield, so that’s pretty cool too.
Megan: What do you see yourself being able to give most in terms of feedback for these entrepreneurs?
Lisa: Well, I've been investing for 18 years, so I've seen just about every kind of deal there is. I’ve specialized in software. That's my comfort zone—that’s my sweet spot. But when you evaluated deals for 18 years, you get a feel for what makes a good one whether it’s in your technology discipline or not. I have a technical background and have also seen many different business models so I can bring a lot to the table around how you operationalize technology companies and how you monetize them. How do you pivot? How do you expand your team? How do you build a board?
Megan: So, as you mentioned, there's a lot of new companies here—very early stage companies looking for early stage funding. But one thing that I noticed yesterday at the investor breakfast is that there doesn’t seem like there’s very many investors here. So, what do you think are some of the pros and cons of coming to Tech Crunch if there are no funders here?
Lisa: I think investors come and speak but many probably don’t stay for the presentations preferring to watch the live stream while multitasking. We also get visibility to a lot of deals outside of conferences. A lot of companies will come to us. Entrepreneurs love [Disrupt] because they can network with other start-up CEOs and founders which is really important because it's difficult to be an entrepreneur. You go through ups and downs. You go through team members. You go through directors. You have to deal with all kinds of business, personnel, and market segment issues. You oftentimes have to change your strategy or modify your products to better service the market that you’re pursuing. So, having other entrepreneurs who can relate, and can give advice and encouragement, is really important.
And for the VCs that do come, they may find a gem. And that's always a motivator for them. The folks that are really early in their career, at the associate or principal level, may spend a little more time here because they're building their pipeline, reputation and brand. They're trying to build their entrepreneurial network. So, this is a good way to do that. There’s benefits on both sides. If you’re an up-and-coming venture capitalist, this is a great place to find deal flow.
Megan: That makes sense. So, when we talked back in the spring and we were discussing my summer internship opportunities, one thing that came up was corporate VC versus traditional VC. You've been lucky enough to do both. I kind of had two questions around that: 1. What was that transition like for you as an investor and 2. How should startups think, if at all, about the type of investor they have in their company?
Lisa: Good question. The transition is pretty straightforward. People think that it's a lot more complex than it is. I think it's probably more complex to go from private venture to corporate. Going from corporate to private, you’re still doing venture investing. The fundamentals of the job haven't changed. But you’re doing it in an environment where there is a much smaller partnership. There are fewer decision makers and it's a much simpler process for getting to a decision. In corporate, you have hierarchical organizational structures, strategic mandates, and multiple decision makers. It’s just a lot more complex. And a much longer chain of command of people who have to weigh in on the process. Whereas, as a Managing Partner in a private venture firm, I'm one of two decision makers. It’s pretty simple, I bring a deal in, if I like it and Steve likes it, we do it!
Megan: That’s awesome. It seems really empowering! You find something you like and you get to decide.
Lisa: Absolutely. While I worked at Intel Capital, I got to decide what deals we brought to our committee for consideration, but I wasn't the only decision maker on the committee. The only potential challenge is if you're going from a big corporate brand and then join a small fund, you're not going to have the benefit of the corporate brand. The corporate brand can be a means for generating deal flow, especially if you're early your investing career.
Megan: And how you think startups should think about choosing between them?
Lisa: I don’t think they should have to choose. You need to understand who you're pitching to and whether they have the right skill set for your company Do they have the right technology and business background to help you succeed? You should do your homework as an entrepreneur to pick the right investor because they are going to be your business partner through it all. You want somebody you can trust. You also want somebody that can add value and knows the market segment. And that's true whether it's a corporate investor or a traditional venture capitalist. You want to have rapport; you want to build a long-term business relationship with this person. And if you’re approaching corporate, they are viewed as a good strategic partner. With them, you’ve got the ability to not only get capital but to get access to their products, services, resources, markets, and professional network over the globe. So, if you're a startup in San Francisco and you want to go to China, Intel Capital would be great company to get an investment from because they have a large presence in China. But in the end, there is value in corporate and private venture capital, and if you’re smart, you want to work with both; you want to have a strategy for working with both.
Megan: Two really quick last questions. So, when it comes to diversity in VC, women & people of color, do you see the tide changing in these last few months? Do you think it may be changing over the next few years? Are there any specific adjustments that you see VCs making toward being more inclusive?
Lisa: I think some are. It's hard to move an entire industry in any particular direction if it's contrary to the existing culture. But some firms take it really seriously and the sexual harassment cases in the industry have brought a lot more attention to the problem and it’s gotten companies to be more mindful of what kind of culture they are creating. Is it inclusive? Is it embracing or rejecting diversity? And can we do something specifically to help improve our perception of those topics? I can't speak to specific firms because I don't have that kind of visibility. But I do know there's a heightened awareness and people are thinking about it more than I’ve seen in the past.
Megan: So, there’s a seed planted?
Lisa: There’s a seed planted. And there's a growing appreciation of the business value of having diversity and being inclusive. Social impact says: you want to help women and minorities because it’s the right thing to do for our country.
Megan: And not because it’s actually make you more money! The data says it.
Lisa: It actually makes your company better. The statistics do prove that point, and there have been many universities and consulting firms that have studied the issue. Even the National Venture Capitalist Association, has acknowledged that there is business value in having diversity and being inclusive.
So now, people are giving it a second look. Whereas in the past it was easy to dismiss because there was no pressure point. Companies now have to become much more proactive about diversity and inclusion, which is a good thing. Sexual harassment is an unfortunate reason to motivate people to act, for sure, but at least they're beginning to take it seriously. I think that's a positive. I can't say wholesale that it has improved or that it is going to improve in the next five years in a statistically significant way, but I do hear people talking about it and there are some actions that are being taken. So hopefully in ten years we won’t be having the conversation and the industry demographics will be representative of society as a whole. We need it to evolve. And it’s in our best interest. Venture capitalists invest in underserved markets and I can’t think of a greater underserved market in technology than those in underrepresented groups. People are not broadly developing technology solutions to their specific problems, so there is an opportunity. You can make money there.
Megan: Last thing. For me, as an MBA student with a “nontraditional” background, meaning not necessarily a finance or consulting background, and wanting to get into VC, one question that I always ask when I interview someone is: What is something you would expect me to not know? So, I'm coming into business, with my research and philanthropy background, what is something that would make say “You can’t be a VC because you don’t know how to do ______.” I'm taking this next year to learn those things and grow to really position myself as a viable candidate as I enter the job market this year.
Lisa: Well, you’re in business school! That’s at least half of what we do. The other half is technology. So, you need to understand technology. If you pursue social impact investing, then less so, it really depends on your goal. Do you want to be a social impact investor or do you want to be a for-profit venture capitalist whose goal is to make money by investing in high quality, commercial technology companies? If it’s the former, then your background is perfect for it. If it’s the latter, I would suggest you spend some time taking technology classes and working at technology start-ups. You don’t need to have a PhD or be a physicist or mathematician, but you should be able to evaluate technology and be fluent in the language. So, I would spend the time developing those skills wherever you can. I would spend some time learning about AI for example, which is a very hot area.
Megan: If I could tell you how much I've heard “AI” in the last two days at Tech Crunch!
Lisa: Yes, it has been around for a while but has accelerated in this decade. I would also start getting to know block chain and distributed computing technologies. Whether its ICOs, currency or distributed storage, or block chain based security. Learning about these areas will serve you well.
Megan: Awesome. Thanks so much for again your time today Lisa!