Lolita Taub — All Raise’s Enterprise SaaS #WomanCrushWednesday

In May, we will focus on Enterprise SaaS and the brilliant investors and operators who bring their expertise to the industry. Our second feature this month is Lolita Taub, formerly of Backstage Capital and who is now looking for her next big adventure. All Raise’s ‘Woman Crush Wednesdays’ (#WCW) is a series where we highlight genius women who are funding or founding tech companies. Please come back to the All Raise Medium blog every Wednesday to find a new profile of an awe-inspiring female VC or founder.

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Lolita Taub is looking for a new challenge. After a decade in enterprise tech, three years in startups and another two years as an investor, Lolita is looking for a position where she can learn from the best and one day become a top early-stage investor in enterprise tech.

As a Principal at Backstage Capital, she helped the firm build out its due diligence process and worked directly with entrepreneurs. With the Backstage team, Lolita helped source and invest in 25 startups that include Unomi and Optimal Solar. As Backstage transitions to an accelerator, Lolita is looking to direct her focus to early-stage enterprise tech and wants to disrupt old industries such as banking/insurance, and manufacturing.

Navigating the world of enterprise is difficult for any startup even with a visionary entrepreneur and exceptional product. But after over a decade of directly selling more than $40 million in enterprise tech solutions, Lolita knows what it takes for products and services to sell to enterprises. During her time at both IBM and Cisco, she sold almost every type of enterprise solution under the sun including but not limited to Data Analytics, Cloud, Mobile, Social, Security, and the Internet of Things. Backed with the know-how, Lolita holds monthly office hours where she works with pre-seed and seed founders on their most pressing questions including product, sales strategy, and business model. You can sign-up for one of her office hours here.

In her next chapter as an enterprise investor, Lolita is looking to join a firm that not only acknowledges diversity but has an intersectional perspective core to the foundation of the firm. Venture is an industry driven by innovative thinkers who see the world in an exceptional way. Lolita believes that finding truly differentiated people requires an investor base with varied perspectives.

I sat down with Lolita and talked about the intricacies of enterprise sales and how diversity results in differentiated deal flow.

Q: What are the components you look at when you diligence a company?

A: One of the first things that come to mind is what sells and what won’t sell. I take a look at what the product is, their business model and how they’re trying to sell it. Part of the process is obviously understanding how they’re building their model and what they’re doing, but then also talking to prospective customers and actual customers, to see how they’re looking at the product or service. Then you look at the scalability. It’s not only about the sales process, but it’s also about the distribution scale. It varies from enterprise to enterprise, but I also have a set of metrics that I look at like:

  1. Acquisition: CAC, Sales Cycle and process
  2. Activation: Customer onboarding process, # of customers with active usage
  3. Retention: Churn
  4. Referral: % of customers who refer, # of customers referred, Value per referral
  5. Revenue: Ticket size, Pricing, MRR, ARR

Q: What do entrepreneurs tend to misunderstand about the sales process?

A: In enterprise sales strategy sessions and sales prospecting role-play with founders, this is a topic I go over often. There are a few things, but a big one is knowing what requirements there are to sell to a big corporation. For example, security requirements are really important in a big corporation. The other thing is actually making it easy to plug in and actually solve a problem but still work with the existing software and processes. The third thing is having a clear strategy. Are you to sell at a company level, a department level or at an individual level? For example, Slack was first used by individuals.

Q: Where do you think the main areas of focus should be for an early stage entrepreneur as they think about selling?

A: From working with founders on their sales stage processes, I find that sometimes entrepreneurs overlook identifying what makes for a qualified lead and then what pushes it to a “won” deal. The usual basic elements needed for an enterprise sale include:

  1. A company with a challenge to solve or a goal to reach
  2. The urgency in accomplishing #1
  3. An individual who can champion a solution (hopefully, the product/service an entrepreneur is selling) internally
  4. A decision-maker who has the power to spend and sign-off on purchases
  5. Timeliness

It’s really important to have the person who’s going to internally sell and to have the decision-maker on your side here. Even before that, there needs to be an initiative that is the driving force to make that enterprise move to make a purchase or sign on to a contract. There has to be some sort of urgency. It doesn’t matter if a startup has a great solution if the enterprises they’re approaching are not prioritizing the problem the startup is solving for. And then there is timing. If you have the essential elements for the sale but the timing is off (because let’s say your purchase did not make the annual budget), then you’re likely not going to make any sales soon. A lot of startup founders waste a lot of cycles trying to sell at the wrong time because they’re not aware of when an enterprise’s calendar year starts or ends (it’s not always January/December).

Q: How do you support entrepreneurs post investment?

A: Post investment is where the real added value from an investor comes in. For pre-seed and seed that means helping entrepreneurs get to their next critical milestone, which can vary depending on their business, but most often includes fundraising support. And to get the founders to their next milestone, I play matchmaker between people, knowledge, and resources. Some of the activities I do to support founders include: 1-on-1 sessions and group office hours, intros to my networks (e.g., enterprise, domain experts, investors, talent, ecosystem players, PR), tweets on ecosystem opportunities (e.g., pitch competitions, accelerator programs, events), and knowledge sharing on Medium, panels, and keynotes. And more and more, I do my best to lend emotional support because it’s rough in the frontline and a founder’s mental health is essential.

Q: How do you source deals and where does your deal flow come from?

A: Proprietary networks and personal brand exposure are at the heart of it. And what I find is founders and startup communities, at large, are akin to the idea of working with a woman of color who can relate to the struggles of underestimated founders and can see opportunity in what old-school pattern-matching VCs don’t. Founders, more and more, care about the people behind the checks they accept and the names they invite to their cap table. So, me being me, helps with deal flow inbounds and referrals.

In the pursuit of deal flow, I do what I can to be where the best founders are (on and offline), add value from the start, and proactively reach out or respond to cold emails. Tangentially, I stay on top of traditional sourcing funnels such as accelerators and incubators/demo days, AngelList, CrunchBase, peer investors, attorneys, accountants, and consultants, debt providers, serial entrepreneurs, government agencies (e.g., economic development organizations, non-profits), universities, and corporate spinoffs. Recently, I started entertaining the idea of starting a podcast.

Q: Why is it important to invest in diverse founders?

A: Demographics are shifting and we’re going to be a minority-majority country by 2023. There’s an estimated $1.3 Trillion Latinx market alone. Economic shifts are happening. And there’s an expected $22 Trillion wealth transfer to women by 2020. On the B2C side, we’re going to be the biggest consumers and on the B2B side, we’re going to be the employees and the talent that takes companies to their next level. This differentiated deal flow is really important because we are the consumers, workers, and leaders of the future. So, as investors, if we want to reap outsized returns, we need to invest in diverse founders.

Q: What are you looking for in your next position?

Here’s what I know: I’ve worked in cross-industry enterprise tech solutions for 10 years and garnered a strong tech foundation. I launched and worked in startups for a couple of those years and learned about the complexities of selling into the enterprise space. And then for the last +2 years, I intentionally transitioned into VC — doing whatever was needed at K Fund, putting some money down as an LP and actively investing in 7 companies for the Portfolia Enterprise Fund, and working on deal flow, due diligence, and portfolio support at Backstage. I have my VC basics down, I have a strong enterprise tech foundation, and I am looking to leverage both to build up my VC career in my next position.

What’s important to me in my next role is not a title but rather the opportunity to learn VC from the best. Ideally, I work with a B2B enterprise-focused seed fund that’s in the $50–100M range who appreciates diversity and is committed to the development of not only the portfolio companies but also the team.