Transitioning from business development to VC with Alexa McLain (Matrix Partners)

This week, we’re thrilled to feature Alexa McLain, a partner at Matrix Partners. After graduating from University of Michigan, where she studied Philosophy and Economics, she joined BlackRock at the height of the financial crisis. She then moved into business development at Palantir, where she spent six years bringing in new clients and working on strategic projects with the CEO. Alexa then joined Matrix this past March, where she focuses on enterprise infrastructure.

We spoke with Alexa about her experience working at such a rapidly scaling company, how she decided to make the move to VC, and what she likes about being an investor.

You graduated college at an interesting time (tail end of the financial crisis) — how did you think about what you wanted to do next?

I was primarily focused on philosophy in college, and no one gives philosophy students good advice on how to build a career — they just assume you will pursue graduate work. I didn’t want to do that because as you get further into philosophy, the number of people who can understand what you’re talking about gets smaller and smaller. I wanted to explore the business world, and got the generic advice to think about consulting and finance.

I joined a startup consulting firm based in Detroit during my junior year as a way to test it out. There were some aspects I really liked, but the full-time role didn’t appeal to me. At the same time, I had applied for a number of finance internships in the fall of 2008, the height of the financial crisis. A lot of major global firms had shut down hiring at this point since they weren’t even sure if they’d be around in the summer, which is staggering to think about now.

BlackRock didn’t have the same solvency problems that some of the investment banks did, and ended up positioning itself very successfully through a series of well-time acquisitions. I interned with them in NYC, and my group was focused on dealing with the toxic structured products that were a big cause of the crisis. I got a front row seat to what was happening in the capital markets, at a time when a lot of theory was proving inadequate, which was an incredibly rich learning environment. They ended up offering me a full time job.

Why did you decide to make the move to Palantir?

When I first started at BlackRock, I was expecting to stay, but I found that the large company culture wasn’t a great fit for me. I taught myself how to code so I could automate a lot of my work, and the response was — “Great, you can do more of the same work that other people haven’t done yet.” There was no chance to take on more responsibility or advance faster, which didn’t appeal to me.

I talked with other friends in NYC, and everyone said that I wouldn’t be dealing with the same issues at a small company. I actually came across Palantir while interviewing for an investing role at a hedge fund in 2011. I asked about what software they would give me if I came onboard, and they told me about Palantir. I looked up the company and found it really compelling.

I applied for the only non-technical role available — the company was 80% software engineers then, and I thought I was a long shot given my background. I didn’t know anyone at the company, but I went on Quora and found five or six people who had answered questions about their experiences there. I got in touch with one of them and he referred me in.

Can you tell us more about how you developed your career at Palantir?

When I joined, Palantir was just starting to work with investment banks on their distressed mortgage portfolios — it was the niche of finance that I had been working in for a while, and they asked me to step in and help manage it. That went well, and I was given the opportunity to start owning entire relationships with customers. Six months later, I started bringing in new business, because I was good at communicating what the software could do. I ended up bringing in the first customers in a lot of industries and geographies that Palantir hadn’t worked in before.

Palantir is an exceptional organization in terms of empowering young people. I was 23 when I started there, but they didn’t care about my age — they cared about what I was delivering. I helped to build up multiple business lines, which now account for about half the company’s revenue. Our CEO asked me to work more closely with him, so I got pulled into a lot of his projects. My role kept evolving organically, and I was able to take on responsibility for things we needed as the business grew — it 10x’ed since I started there.

How did you decide it was time to move on from Palantir?

Over my six years at Palantir, my learning curve went from being extremely steep, where I felt like I was barely hanging on, to doing things that were more manageable. Things had gotten a little bit comfortable. I had been working closely with our Board of Directors, and I consider Peter Thiel (the chairman of the Board) a great mentor, so I asked for his advice on what I should explore next. He introduced me to a lot of people at both startups and in venture.

I was pretty open-minded in terms of my job search, talking to startups where I would be the third person there all the way up to $10B+ companies. I knew that I really liked working autonomously and being able to iterate quickly and go after things, but I didn’t set out with a clear picture of where I would land.

What were you looking for in a venture firm?

I definitely wanted to stay in the Bay Area, and wanted to be part of a team that’s not hierarchical or rigidly defined. I wanted a team where everyone is on equal footing and has equal motivation to make things happen. Early stage investing appealed to me because the process of building something new and going from 0 to 1 was a big part of what was so enjoyable in my last role.

It was also really important to me to be at a place where people are high integrity and clearly like and respect one another. The team at Matrix is primarily technical people who have built or led companies before, so we clicked right away.

What does your role look like on a day-to-day basis?

It’s a mix of research, finding and meeting smart people working on important problems, and diligence for things that are further along in our process. I try to keep my time structured such that I can follow the momentum of important things as they emerge. You have to find some order in the chaos and figure out how to execute. When you’re in a startup, the feedback loop is pretty quick — you know pretty quickly if you’re working on the right things or not. That’s harder to know in VC.

I focus on early stage enterprise infrastructure broadly, but within that category, I’m very drawn to companies that use data as a major source of strategic advantage. I look at companies doing interesting things with ML and AI, companies that are creating unique data assets or marketplaces, or are doing other creative things with data. Those are the kind of intellectual problems that I really enjoy working with founders on.

Having successfully gone through the VC recruiting process, is there any advice you’d give to others looking to break in?

The weirdest thing about the VC recruiting process is that it’s often really vague when you first start interviewing — both sides aren’t sure exactly what role you would fill, and there’s a bit of a song and dance around that. You have to be able to tolerate ambiguity.

I recommend spending time trying to meet companies that are similar to the type of companies you’d be investing in. It’s the most accessible proxy for whether you’ll actually like the job full-time. If for example, I’m trying to find seed stage technical founders, I should know if those are the people I’m drawn to and want to spend time with and vice versa.

We’d love your feedback on this post and other career questions we should cover — you can reach us on email at twins@crv.com or on Twitter @venturetwins.

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