I had the pleasure of interviewing Sara Batterby of The Batterby Group. She has spent her entire career working in startups on both the founder and investor side. Now she uses that experience to teach founders who haven’t traditionally had access to capital how to raise money for their companies.
Jean: Thank you so much for joining us! Can you share your story about how you got into the VC space?
After almost 2 decades of operating in startups I was invited to join as a partner with Elemeno Ventures, an Angel Fund launching out of Silicon Valley. We set about developing a unique investment thesis focusing on a more data driven and disciplined approach to startup investing. I quickly realized that if we eliminated bias and used an evidence based approach to distributing capital, we would automatically find ourselves funding a much greater percentage of female and POC entrepreneurs than typically get awarded venture capital. This was something I was passionate about so I jumped at the opportunity and learned a lot about looking at the world through an investor lens.
Jean: What kinds of startups do you typically work with?
After leaving California, I went back to being a founder as CEO of Hifi Farms, a cannabis cultivation business in Oregon. I exited after 3 years and started my company specifically to support founders who are underserved by our venture capital markets. That means women, POC’s and LGBTQ folks, and interestingly, the cannabis industry which was excluded because of prohibition.
Jean: What do you look for in the management team of your investment companies?
I look for strong, mission driven leadership supported by competent operational management. I believe that skills diversity on teams is critical, even in tech companies, and that diversity more broadly is a huge advantage. Frankly I find diverse teams more interesting and I am a strong proponent of equity in capital and in business. Now we have the data that proves diversity is a better portfolio strategy and more and more investors are understanding this which is great.
Jean: Can you share a story of a successful Angel or VC investment? What were some of the highlights?
So in my role working with pre-funded companies I function like an investor because I receive advisory equity compensation from the companies I support. One of the most amazing companies I have supported was The People’s Dispensary led by Christine De La Rosa in Oakland, California. Christina is a Mexican American woman leading an incredibly diverse team in the emerging cannabis industry. She needed to raise $2.2M for her company and was determined to create a structure that allowed members of her Oakland community, non-registered investors, to participate in her offering. We developed a structure that allowed her to do this and I expected her to use it to supplement a more traditional raise. Christine came to me knowing nothing about fundraising but proceeded to close her entire round in increments of $1–50,000 from her community while leaving $6M from larger investors on the sidelines. I was so blown away to see what this remarkable woman was able to do with some foundational education and training in the fundraising process. Christine now leads the most exciting Cannabis Equity Capital initiative in the US, ensuring that diversity is baked into that industry as it comes online all over the country.
Jean: What is one piece of advice you would give a startup?
Understand that a time will come when everything sucks and you have no idea how you are going to make it to the other side of what you are facing. Put your head down, don’t panic and know that this is just part of the journey.
Jean: Do you have a favorite book that made a deep impact on your life? Can you share a story?
The book I am most excited about is one that does not yet exist. For decades fundraising has been treated like a network strength, a function of privilege and connection. The truth is, it is a skill set that can be taught and learned and the book that lays out those skills and strategies in a simple approach that all founders can access for a few dollars is going to have an impact on lives all over the world.
Jean: What are your “5 Things I Wish Founders Knew Before They Pitched To Me” and why. Please share a story or example for each.
These observations come from years of coaching founders on pitch and presentation.
- It’s not about you — Founders get deeply involved in their own offering and business and sometimes forget that, for an investor, it is at least as much about product market fit and market size. The world outside of your business. I have seen many founders pitch with little reference to how they have validated their offering with real customers.
- Know your numbers — Founders sometimes get help building pro forma’s and plans which is great but they need to have a detailed grasp on all their numbers and be able to answer questions related to a very granular examination of a pitch. I attended a meeting with a founder and a VC after months of preparation only to watch that founder stumble around on questions regarding revenue and costs. Not good!
- Assumptions are everything — All predictive models are based on assumptions. It is critical that you have segregated, articulated and validated the assumptions that validate your pro-forma and plan and this is evident in a pitch. I constantly look at pro forma’s, plans, and pitches that do not clearly separate assumptions and that leaves me in the dark as to whether a founders plan is as realistic and conservative as it should be.
- Less is more. Almost every pitch I see has too much text on it. Recently a client was preparing to pitch at a major angel event and showed me a very busy deck. We probably took 60% of the content out and they went on to win that contest and secure funding from the investors present.
- Powerpoint is not the point — Powerpoint presentations have a tendency to divide the audience’s attention between the presenter and the presentation. In many cases they actually make it harder for an investor to know whether to read or listen. Pitching is ultimately about eliciting engagement and excitement so a more involved relationship can develop with an investor who wants to learn more. Use a deck as a series of headlines and focus energy on speaking more extemporaneously with the listener.
Jean: Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this. :-)
Arlan Hamilton and the work she is doing at Backstage Capital is a huge inspiration for me as someone dedicated to equal access to funding for a greater diversity of entrepreneurs. I would gladly board a plane to buy her a cup of coffee:)
Connect with me on Social Media:
- Connect on Linkedin: https://www.linkedin.com/in/sarabatterby/
- Connect on Facebook: https://www.facebook.com/sbatterby
- Follow on Instagram: https://www.instagram.com/sarabatterby/
- Follow on Twitter: https://twitter.com/settings/account/sara_batterby
Jean: This was really inspiring! Thank you so much for your time.
-Published on October 2018