Pushing for Change: An Interview with Cat Hernandez
For Cat Hernandez, former Operating Partner at Primary Venture Partners and now Partner at The Venture Collective (TVC), breaking into venture capital was a happy accident of sorts. While becoming a funder was never “part of the plan,” she believes that it has brought her right where she needs to be to help drive overdue change in the tech ecosystem. With an eye for impact and a focus on backing and supporting the underrepresented, Hernandez aims to help a more diverse class of founders get through the various hurdles of early stage company building in order to give them a fighting chance of leaving a legacy.
What motivated you to get into venture capital?
Cat Hernandez: Becoming a VC was never on the list so to speak. I came from a very traditional Filipino family and, as such, was highly encouraged to pursue “stable” career paths like that of a doctor, lawyer, or engineer. The truth is, I landed in venture by happenstance with a decade of operating experience under my belt and an optimistic view of how we could challenge the status quo as early-stage investors. At the time, joining Primary was about redefining the term “value-add” by making a meaningful, positive impact on the founder journey.
Fast forward to today and I’m still here because that same mission rings true and surrounds me with experiences I couldn’t have fathomed as a young girl growing up in the Middle East.
The core challenge is centered around figuring out how to break into and navigate a closed-loop, relationship-driven network that isn’t particularly diverse and hasn’t been motivated to change until recently. I was fortunate to meet my partners through a previous colleague and, while my experience isn’t necessarily an anomaly, you may not want to entrust your career aspirations to a “happy accident.”
What would you like to achieve in your role as a funder? What is your “personal mission” in your work and how has this changed over time?
Cat: My personal mission hasn’t changed much over the years. At its core, I have always been focused on helping people thrive personally and professionally despite my official job title. As a funder, I endeavor to be a high-conviction partner that will help some of the best underrepresented founders in the world build companies that leave a positive mark on the world. That certainly doesn’t mean we will always agree on the path forward, but it does mean choosing a partner who will be a strong confidant, challenger, and overall advisor depending on what’s best for the company long-term.
A lot of people realize that venture capital is a difficult industry to break into, and specifically for women, there might be some barriers that they might be running into. Do you have any advice for women who are looking into going into that role and exploring that path?
Cat: Yes, it’s true that there aren’t that many jobs in venture. I don’t believe, however, that that’s the biggest hindrance for those who are trying to find their way in. The core challenge is centered around figuring out how to break into and navigate a closed-loop, relationship-driven network that isn’t particularly diverse and hasn’t been motivated to change until recently. I was fortunate to meet my partners through a previous colleague and, while my experience isn’t necessarily an anomaly, you may not want to entrust your career aspirations to a “happy accident.”
If you are serious about becoming a VC then I’d suggest a few different ways of becoming a known quantity — play a significant role in a fast-growing startup, build goodwill and start flexing your deal-sourcing muscles early, and create a personal brand that resonates with founders and operators. Sounds easy, right?
Why do you think some founders find it difficult to get backing? What are some barriers you see on the other side for founders?
Cat: The gender and racial makeup of the venture capital industry is staggeringly homogenous and while we have made strides in the last decade or so, there is still a lot of work to be done to ensure that diverse perspectives are represented around the check-writing table. In my opinion, that is the single biggest determinant for the fundraising challenges underrepresented founders experience on a daily basis.
The venture capital world has evolved a lot in the last decade with a few notable changes. The power dynamic has shifted in favor of the founder with capital as commodity and value add as non-negotiable. In that same timeframe, early-stage funds have gotten larger and larger and, I believe, that has created a delta in the market, particularly for pre-seed companies.
You talked previously about your background. Do you think that your background has impacted the way you view things and what you bring to the table in terms of looking at founders/companies and how they can contribute to the world at large?
Cat: Definitely. I am the daughter of an expat and, growing up, we lived in a small town called Abqaiq (it’s pronounced “ab-cake” in case you’re wondering), Saudi Arabia. Every person I knew was from a different part of the world and, while complicated at times, it taught me about the importance of understanding, tolerance, and acceptance early on in life. I genuinely believe that it sits at the core of who I am and how I choose to show up for people in my personal and professional life.
What really draws you into a company when you are sourcing them? What do you look for in a founder?
Cat: Like most investors, I spend a lot of time thinking about the market, team, timing, and product (often in that order). That said, I firmly believe that early-stage investing is all about people. In my opinion, the most compelling founders are unparalleled in their level of conviction and relentless in their pursuit of changing the world. It’s hard to suss out during short diligence sprints, but if you’re doing it right, you’re often building relationships with people over a longer time horizon.
Businesses grow and evolve a lot and for me, it comes down to having a strong belief that he/she can navigate the ups and downs ahead.
Which sectors are you particularly excited about?
Cat: The sectors I am most excited about are the ones where I believe the most inequity exists like the future of work, future of finance, future of education, and future of healthcare. I always say that I am interested in technology that furthers the whole human. I look for mission-driven founders looking to make a deep, positive impact on the 99% so I constantly ask the question, “How can we empower/support more people to thrive and live their best lives?”
It’s going to take more than five years to make a material shift in the inequity across the tech ecosystem, but my hope is that the intensity of today’s dialogue goes beyond supportive tweets and reactive pledges. Ultimately, it starts with bringing diversity to every level of the capital food chain from limited partner to general partner and founder to operator. Each stakeholder has a responsibility to empower all future builders, but especially the underrepresented.
What drew you to the “new approach” of The Venture Collective? What are some of the obstacles that you see startups facing that make you believe that this model is a good idea?
Cat: The venture capital world has evolved a lot in the last decade with a few notable changes. The power dynamic has shifted in favor of the founder with capital as commodity and value add as non-negotiable. In that same timeframe, early-stage funds have gotten larger and larger and, I believe, that has created a delta in the market, particularly for pre-seed companies. Today that delta is serviced programmatically via accelerators and incubators, but that path isn’t for everyone.
The alternative is something more bespoke, something that takes into account the nuances of the founder journey and offers support that shortens the learning curve, lessens wheel reinvention, and ultimately expedites success. The hands-on approach we’ve adopted at TVC is not new or novel, but it is core to our DNA as a firm; and for a certain type of founder, that value proposition really resonates. We have built a team of investors, founders, and operators that can be helpful around many of the foundational pieces of company building (i.e go-to market, team building, product, etc).
What do you envision five years from now for this project, for your work, and for venture capital in general?
Cat: It’s going to take more than five years to make a material shift in the inequity across the tech ecosystem, but my hope is that the intensity of today’s dialogue goes beyond supportive tweets and reactive pledges. Ultimately, it starts with bringing diversity to every level of the capital food chain from limited partner to general partner and founder to operator. Each stakeholder has a responsibility to empower all future builders, but especially the underrepresented. Over time, the conversation becomes less about what we don’t have, but more of what it means to support a diverse founder community — that it’s not only good for the world, it’s extremely good for business.
At the end of the day, I hope to have the privilege of deploying capital and supporting founders for as long as I can. I have a belief that The Venture Collective (TVC), with its unwavering commitment to being part of the solution, will create a long-lasting venture business; and I feel fortunate to be a part of the early chapters.
