Venture Forward Series — Seattle
The Riveter x Christina Vuleta presented Venture Forward, a conversation series focused on helping women entrepreneurs take their next step forward. The panel discussions, held live in LA, Austin, and Seattle, featured three funders answering questions from three early-stage founders with a focus on overcoming the challenges of scaling a startup (reposted from The Riveter blog).
Do You Want To Be Rich or Do You Want To Be A Queen?
August 7, 2019
For a trio of startup founders in Seattle, community is key to making connections and scaling their businesses. Three advisors from the Seattle startup ecosystem offered advice on how to take community to the next level — from optimizing customer engagement, to scaling a community-based tech platform, to navigating the VC funding path for a global ed-tech company.
Funder Panel: Sally Bergesen, founder and CEO of Oiselle, a women’s athletic apparel company, Julie Sandler, Managing Director at Pioneer Square Labs, and Martina Welkoff, Founding Partner, WXR Fund
Issue 1: Balancing content vs product or a two-sided marketplace
Laura Clise, CEO and founder of Intentionalist, is a natural connector. Now she is matching that talent with inclusive commerce. The Intentionalist is an online platform that connects consumers to independent, brick and mortar businesses with an emphasis on those owned by women, minorities, vets and LGBTQ people.
“There’s tremendous opportunity in harnessing the everyday decisions we make about where we eat, drink, shop or workout in support of more equitable communities. I want to connect these everyday decisions to the communities that are important to us.”
Clise raised $37,000 through crowdfunding and self-funding and is seeking seed financing based on a pilot including 15 Seattle based companies.
The Intentionalist platform works as a two-sided marketplace, providing content about local businesses and a shopping guide so users can ultimately purchase products and services that match their causes, passions or interests.
Clise is facing tough choices on how to deploy resources between the two sides of the business.
I have strong proof of concept and a functioning product, but there is still work to do in terms of the “stickiness” of the user experience. And that product experience is key to facilitating the transaction that will support small businesses.”
At the same time she has learned that “content is queen”.
“People love the content because it’s how they click with the community of business owners. But with constrained resources, it’s challenging to establish a regular cadence of content for our blog, newsletters and video.”
Half of her advisors have urged her to focus on product, believing that “without product you’re a leaky bucket”, and people won’t stay on or come back. The other half think the product is good enough, advising her to focus on building content as that’s how people “relate to the brand.”
Clise’s Question: I’m focused on hitting milestones for awareness, use and engagement. But I also need to deliver on the product experience, ensuring that content is where it needs to be. How do I allocate my time and resources to both?
The Answers:
Martina Welkhoff, Founding Partner, WXR Fund advised Clise not to give up on content.
“I fall on both sides of the spectrum when it comes to content vs. product. Both are important and getting to the right balance is an art.”
She recommended leveraging the partnerships that Clise has developed. She also suggested looking for production efficiencies through script collaboration or creative formulas for content creation.
“What content creation can you outsource for mutual benefit so you don’t have to necessarily spend more money?”
Julie Sandler, Managing Director at Pioneer Square Labs advised Clise to tap into the powerful community that’s already engaging with The Intentionalist.
“Nobody will ever know your customers as well as you do. And there’s no better advisor for this kind of question than your customers. One thing that comes shining through when you talk about your business is that you clearly understand your fricking community.”
Sandler suggested using social media or focus groups for feedback from the site’s users and fans.
“Ask them how bad the experience really is. You can share what you’re building and ask what they would prioritize.”
Finally, she encouraged Clise to follow the trust.
“You have, I suspect, a secret weapon that a vast majority of companies don’t have, which is that you have a trusted line of communication… what an advantage that is!”
Sally Bergesen, founder and CEO of Oilselle, a women’s athletic apparel company, commended Clise for making human connections at a time when devices are changing the way we interact.
Bergesen, who started her company in 2007, shared that as more companies jumped on the “by women for women” bandwagon, she needed to prioritize her position as a community designed for the female athlete.
“You have to put community first and foremost in your storytelling. Never stop storytelling. Get scrappy. Get creative. That’s what gets everybody feeling it.”
Issue 2: Getting funded in a 2% world.
As a rising professional in the startup and tech industry, Sage Ke’alohilani Quiamno realized that a conversation was missing.
“People talk about feminism, but no one talks about the intersectionality of feminism. We’re not addressing the needs or challenges that face women of color in the workplace.”
To fill that gap she cofounded Future for Us, a platform to advance women of color through community, culture and career development. Since launching in January 2019, Future For Us has grown to a community of 5,000 professional women, and Quiamno has raised $150K through bootstrapping and crowdfunding.
With so many community platforms proliferating the market, she believes venture capital funding is critical to differentiate and scale the business as a tech platform. However, she’s conscious of the challenges women of color founders face raising money.
“Most of the time being a woman of color will either limit or won’t allow you to get funding.
Quiamno went on to note that Black female founders are only able to raise an average of $36,000 for their companies and they receive less than 2% of VC capital.
“Having pitched 100 times since last September these stats feel very real to me.”
Quiamno’s Question: As a woman of color, how can I position myself to succeed? How can I pitch my company to VC firms in a way that gets me across the line to get actual funding or interest?”
The Answers :
Sandler advised her to push through innate biases by focusing on the big picture.
“Talk about the big swing. The moonshot that you’re willing to take as opposed to getting caught in the traffic light of answering every detail about your cost structure or the risks.”
Sandler then referenced a Harvard Business Review study that found that women get asked different questions than men founders by both male and female investors. Women are asked about potential losses while men are asked about potential growth. To address this innate bias, Sander told Quiamno to come in ready to turn those questions around.
She did not discount the barriers and biases, but encouraged Quiamno to consider that there are a lot of people in the industry she may not want to commit to —even if they want to work with her.
“The average U.S. marriage lasts 5 years. The average mentor relationship, especially for Series C onward, lasts 7 to 11 years and it’s a lot harder to get out of. You need to make sure you want to work with them both in good times and bad. What is this person going to be like on a bad day or when things aren’t going well? Is this someone that you’re going to be excited to share good news with when things are going well?”
She advised Quiamno that approaching the funding process as a two-way evaluation process will create an important dynamic between the investor and founder that should not be underestimated.
“It’s a position of strength that I’d say the underrepresented founder does not always come into the conversation with. Own that, irrespective of your background, irrespective of the stats, treat it like a two-way diligence process and conversation.”
Similarly, as a founder who ultimately chose to go without venture funding, Bergesen pushed Quiamno to consider if the venture route matches her vision for leading the company.
Bergesen shared a question that one of her mentors asked her when she first started Oiselle.
“Do you want to be rich or do you want to be queen?” To which Bergesen replied, “I want to be a rich queen.”
Bergesen’s point was that there are specific timelines and expectations that come with venture funding.
“Do you want to grow a company to lead it? To employ people? To be part of the fabric of a community? There are all sorts of different goals other than to be rich, which is so often what the VCs are looking for.”
She stressed that if her goal is the former, Quiamno needs to structure her conversation accordingly.
“The VCs are going to want to know how quickly you can ramp it up, how you’re going to gas the tanks and what your exit plan is. It’s often a spend, grow, lose money, grow, exit cycle.”
She added that the other route, may take longer but can offer more control.
“It took us a long time to get to profitability. I learned that if I was profitable, there’d be a bank there to bank me and we could grow at a gradual rate thoughtfully, with a story and a rationale. It’s just a choice you have to make as the founder.”
Welkhoff advised Quiamno to do her research and hone her pitch. She pointed out that one advantage founders have today is all the information about VCs available online through content and social media.
“You can get a sense of a person and their values from their online presence. Seek out the people in the venture community who exemplify the values you’d like to see in you want in a partner.”
Welker encouraged Quiamno to work her network.
“You have this incredible community of 5,000 women and I bet people in that community know people you want to work with. Make a ‘wish-list’ of the top 10 people you want to meet and then try to get to those people through trusted relationships.”
Issue 3: Going Big, Global and Boldly Growing an Ed-Tech Company
After spending time in foreign service in Vietnam, Pakistan and Iraq, teaching high school, and founding a DC based national college preparation service, Tina Tran Neville turned her eyes to emerging markets where she discovered an enormous demand for certified North American teachers.
“Native English-speaking teachers are really prized. There are 2 billion people who want to learn and there’s only 250,000 teachers.”
She cofounded Lana to connect North American teachers with students through a proprietary video conferencing software, in late 2018.
Neville is bootstrapping the English language learning program with revenue from her first company and it is paying her bills. But this time around she is ready to scale a high growth company.
“I want to go big and I’m owning that as a woman. I love saying that. I used to say I was building a lifestyle business but now I am inspired by the community around me to be bold.”
Neville and her team have built the technology and have a paying customer base. With Lana recently launched in Vietnam, Thailand, and China, Neville is developing her business strategy through 2020.
Neville’s Question: For the next 18 months what are the key metrics we need to focus on as we build our initial team and scale? As a founder managing multiple activities and goals, what business strategies should be thinking about as we try to go big and go global?”
The Answers
Welkhoff commended Neville for having significant revenue already and offered advice on how to translate a sustainable business with organic growth to company with hyper growth.
“This is an overused cliché but it’s about how you’re going to ‘pour the gasoline’ on it. You want to tell the story that with this amount of capital you are going to take off and be a global dominating force.”
She told Neville to start by interrogating what’s working and not working.
“It’s crucial to evaluate where there’s traction, where there’s engagement, and where there’s conversion. Look for indications that people want more…and that more people will want it.”
Welkhoff suggested looking at margins to identify opportunities to increase efficiencies with more capital, and told her to work backwards to identify a realistic growth curve.
“If your goal is this number of markets, and this many customers, and this amount of dollars, what does that mean for your marketing spend? What does that mean in terms of growth? Extrapolating different scenarios using this process is a good way to build a roadmap.”
Sandler jumped in with the advice to build a “growth” narrative that connects the founder story, the point of differentiation and metrics.
“One of the first things VCs look for is a founder who comes across as the only person who can build this vision. They want a founder who’s creating something in a massive market who is just the inevitable person to be attacking the opportunity.”
She pointed to Neville’s background working in foreign service, education and building a ed-tech company as a compelling foundation.
“There’s a thread connecting all of your experiences that led you to solve this huge problem and create a huge opportunity in a way that very few people could You combine that with some natural talents and it’s a perfect recipe.”
Then she pushed Neville to to focus on setting the offering apart from other companies who will want the same market.
“What is the experience that’s going to be hard for others to authentically replicate or hard to technically replicate as you are building this unique method of connecting teachers to students?”
She added that the vast majority of founders that she interacts with at the early stages are not building the infrastructure to track data around repeat customers and referrals.
“It’s kind of hard to do at that level of granularity, so build it from the ground up with an eye toward telling that story with your data.”
Sandler shared that her firm gets on the phone with actual customers during due diligence at the Series A stage to understand how likely they are to be a repeat customer or to refer others, for example.
“When that person on the other end the line is jumping out of the receiver and saying ‘You’re an idiot not to invest in this’, you listen. Aside from getting that in person, being able to see it in your data goes a long way.”
Bergesen recommended honing in on Lana’s brand purpose. She encouraged Neville to tie her brand story to the emotional funnel of expanding horizons for people through her business.
“You are bringing the world closer together and helping people cross cultural barriers. The idea of expanding horizons is so meaningful and understandable so don’t lose sight of that.”
By Christina Vuleta
Christina Vuleta hosts Venture Forward events to help founders move their ventures forward, Mentor Accelerators to foster unstructured mentorship within organizations, and Venture Salons to accelerate innovation through wisdom exchange.
