Meet The Female Leaders Of Finance: “If you believe you have an edge, ask why, because having an edge is becoming rarer each day”, with Gwen Cheni & Jason Hartman
If you believe you have an edge, ask why, because having an edge is becoming rarer each day. Ask yourself how long this edge can last. Be honest with yourself, because it’s expensive to learn the truth in the markets.
As a part of my series about strong female finance leaders, I had the pleasure of interviewing Gwen Cheni. Gwen is currently a Venture Partner at Fusion Fund, an early-stage venture fund with more than 50 portfolio companies, and an Entrepreneur in Residence at Singularity University Ventures. Her love of technology started early growing up in SF, and solidified when William Hewlett, an alumus of her high school, donated a brand new computer lab. Before venture capital, Gwen was the Assistant Portfolio Manager at a technology focused hedge fund in San Francisco. She started angel investing in 2012 and loves growing companies with founders. Prior to venture, Gwen spent eighteen years investing in the public markets, and started her career as an Analyst at Goldman Sachs, and an Associate at J.P. Morgan. Gwen’s traveled to 70 countries and counting, attempted to learn seven languages, and admittedly mastered none. She received her BA from Yale University with a major in Economics and minor-equivalent in Computer Science Electrical Engineering, where she graduated summa cum laude and Phi Beta Kappa. She received her MBA in four concentrations from The University of Chicago Booth School of Business with Honors.
Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Banking/Finance field?
I bought my first stock at age eleven, so investing has always been a hobby. The joke is that while other kids collected baseball cards, I collected stock certificates. I didn’t know what I was doing until age fifteen, when I was pointed toward Berkshire Hathaway. The inoculation was immediate, and I still read everything I can on Buffett and Munger. In some ways, they’ve had as much influence on my life as my grandparents. I went straight to Wall Street after college, spent my analyst years at Goldman Sachs, and associate years at JPMorgan. I love investing, and feel very fortunate to be able to do what I love for a living.
Can you share with our readers the most interesting or amusing story that occured to you in your career so far? Can you share the lesson or take away you took out of that story?
One of the many wonderful features of this career is that no two days are the same, so every day is interesting. It’s difficult to pick one interesting story because there are so many! The most rewarding two stories are when the CEOs of companies asked me for advice at critical forks in the road. One was on international expansion, the other was on a buyout. On the international expansion, I was very honest and straight forward with the CEO, “you are great with data which is why you have a lead in fraud detection. You are great with claims processing, which is why you have the best expense ratio. You aren’t as great at marketing. Mexico and Brasil are two countries that might best utilize your strengths. Partnering with a domestic player can assist with marketing, and a minority JV stake would keep the investment an Income Statement line item instead of on Balance Sheet.” Within six months, both CEOs implemented part or all of my advice. Looking back, these two instances catalyzed a turning points in my career: they made me realize how much I love working with management teams to create value and build companies, rather than merely trading stocks. My temperament is very calm under pressure, rational, seeing both the forest and the trees, so it lends well to advisory. I also tend to look at least three years out, which is increasingly not rewarded in the public markets, but critical when building startups and in venture investing.
Are you working on any exciting new projects now? How do you think that will help people?
In addition to being a Venture Partner at Fusion Fund, I’m also working with a former VC and now philanthropist on building a $100 million impact fund. It’s a bold initiative, stretch goal necessitating a lot of coordination, but one that I’m passionate about. Despite being an investor my whole life, I view money mostly as a way to do good. Growing up reading Buffett and Munger has greatly influenced my spending habits (or lack thereof). More tangibly and shorter term, after seeing success at Sequoia’s Scout Capital, I’m looking to build a movement or a fund that identifies the non-obvious founders, the underdogs, the dark horses. I was a penniless first-generation kid who worked 30 hours a week to put herself through college, so I’ve always sided with the underdogs. There’s always been this fire and hunger inside of me to show the doubters (which sometimes included myself) that I can do it despite the odds. So when I see this fire in founders, I feel an instant connection and want to help them.
What do you think makes your company stand out? Can you share a story?
The moment I met Lu (founder of Fusion Fund), I knew I wanted to do everything I can to help her. She wasn’t even 30 years old when I met her, but her vision was to build a long-standing sustainable venture firm just like Sequoia. She highlighted the success factors behind these firms, and how she will differentiate her fund. I’m a huge fan of founders with a clear vision, a path to get there, and an unwavering grit to succeed. Lu also immediately noticed my humility. My theory that people with humility tend to notice humility in others. The combination of grit and humility is rare and powerful. Every meeting with Lu since then has reinforced what I noticed when we first met. In addition to intelligence, she also has a great sense of humor and an uncanny ability to build relationships.
Ok. Thank you for all that. Let’s now jump to the main core of our interview. Wall Street and Finance used to be an “all white boys club”. This has changed a lot recently. In your opinion, what caused this change?
There is undeniably still a ton of work to do in this area, and I wish we could speed up the process of getting there. There are also undoubtedly those that don’t want the status quo to change. However, I want to take a moment to thank all the people that have done so much to bring the issues to light and to effect change. It’s easy to get discouraged at the scale and recalcitrance of the problem, and lose sight of all the people who have stepped up. These people don’t get enough credit and gratitude: because of them, the tide is finally changing. History has shown repeatedly that it’s the passion and persistence of a few people that set off decades of social change. We all know at least one of these forerunners, ask them how you can help (and follow through with the requests), take tasks off their plates, protect them, and speak up when they are slandered. These might seem minor, but sea change is the accumulation of small nudges.
Of course, despite the progress, we still have a lot more work to do to achieve parity. According to this report in CNBC, less than 17 percent of senior positions in investment banks are held by women. In your opinion or experience, what 3 things can be done by a)individuals b)companies and/or c) society to support this movement going forward?
Unfortunately the real number might be much lower than 17 percent. One report on portfolio managers estimated less than nine percent are female. Excluding ETF and index fund portfolio managers, the figure might be around five. Some ideas on how you can help:
a) Individuals -
i) When you see someone taking credit for ideas or work that’s not theirs, regardless of gender, question it, “when did you come up with that?”
ii) Unconscious bias is real, but the more we acknowledge it, the less influence it has on our decision making. Get curious about unconscious bias.
iii) If you are asked to be on a panel or to join a Board, ask about their diversity.
b) Companies -
i) It’s not enough just to get a woman or minority on your Board, do you actually listen to the different opinions? How do you ensure these different perspectives are being incorporated? Don’t merely check the diversity box, studies have shown that the real benefits come from incorporating the diverse perspectives.
ii) Some of the large tech companies have already come around to paternity leave. Two weeks of paternity leave won’t kill your company, but it certainly takes a stand and makes a statement.
iii) Emulate companies in Sweden, Norway, Finland and Iceland. They’ve been ahead of the curve and we can adopt policies that have worked while skipping the ones that didn’t.
c) Society -
i) I’d like to point to the Scandinavian countries again: these countries have managed to not merely include women in the workforce, but give them meaningful career advancements and senior decision making roles. This is in stark contrast with China and Rwanda, where women are well represented in the workforce, but not in meaningful roles.
ii) Let’s encourage our daughters, nieces, sisters, mothers, to pursue STEM degrees, senior management positions, and bold startups.
iii) Mentor and bring up those who had to swim upstream, regardless of gender, race, religion or orientation.
Let’s now turn to a slightly new topic. According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience what is the cause of these unfortunate numbers? If you had the power to make a change, what 3 things would you recommend to improve these numbers?
The solution to the lack of financial literacy is education. Thankfully there’s been a proliferation of free online resources in recent years, but that also puts into question the curation of quality content. I only have one recommendation: a mandatory personal finance course for high school graduation. If we make high school students pass a swim test to graduate, we should put financial literacy at the same level.
You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?
- Spend less than you earn. There are very few exceptions to this rule, and most of the exceptions revolve around unforeseen critical healthcare costs.
- If you aren’t looking at the markets daily, you might be better off dollar-cost averaging into a low-cost ETF. This is the same advice Buffett has been giving for years.
- If you believe you have an edge, ask why, because having an edge is becoming rarer each day. Ask yourself how long this edge can last. Be honest with yourself, because it’s expensive to learn the truth in the markets.
- Taxes matter. Always look at returns after tax and after fees.
- Watch the currents, flows, and ecosystem carefully. Changes in stakeholders and who’s sitting at the table matter tremendously, but rarely announced.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
There’s been a handful of people who believed in me before I believed in myself. Each one saw some ability in me and urged me to reach for a stretch goal. Most recently, when I was switching from public equity investing to private equity venture investing, everyone was a naysayers on why this switch can’t be done. Everyone except one successful VC, who believed that because I’ve invested in every sector and vertical as a public investor for the last two decades, I’d be a quick study and identify business drivers fast at pitches. This investor was right: even the first time as a pitch contest judge, I was front-running the same questions as experienced VCs. The same skill set of building credibility and advisory trust with management teams in the public markets, also translated perfectly to the private markets. More than once, an expert in their field saw something in me, before I saw it myself. They believed in me before I believed in myself. It might seem trivial, but these short conversations and comments are what kept me going.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Learning is a gift. I’ve faced unfair situations just like everyone else, but luckily I have a temperament that never stays upset for more than twelve hours. I saw each situation as an opportunity to learn something new, as a challenge to myself to expand my knowledge base. Each time, the circumstance gave me an opportunity to expand my circle of competence, and for that, I am extremely grateful.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)
Having invested both in the public equity markets and on the private venture capital side, I noticed that the non-consensus bets in venture have much bigger amplitudes than in the public markets. On the upside, the returns to early-stage venture are higher due to long-term compounding. On the downside, the non-consensus bets don’t get funding and fail to launch at all. As investors, we all have ingrained mental models and checklists that get reinforced and carved deeper by our daily echo chambers. It takes active effort to shake ourselves out of these grooves. I’d like to start a movement or a fund that identifies these non-consensus non-obvious founders, whether they are women, minorities, international, economically disadvantaged, or simply lacking confidence. The best comeback stories are about the underdogs, and I believe the best investment opportunities are within the underdogs as well.
Thank you for all of these great insights!
About The Author:
Jason Hartman is the Founder and CEO of Platinum Properties Investor Network, The Hartman Media Company and The Jason Hartman Foundation. Jason has been involved in several thousand real estate transactions and has owned income properties in 11 states and 17 cities. His company, Platinum Properties Investor Network, Inc. helps people achieve The American Dream of financial freedom by purchasing income property in prudent markets nationwide. Jason’s Complete Solution for Real Estate Investors™ is a comprehensive system providing real estate investors with education, research, resources and technology to deal with all areas of their income property investment needs. Jason’s highly sought after educational events, speaking engagements, and his ultra-hot “Creating Wealth Podcast” inspire and empower hundreds of thousands of people in 164 countries worldwide. While running his successful real estate and media businesses, Jason also believes that giving back to the community plays an important role in building strong personal relationships. He established The Jason Hartman Foundation in 2005 to provide financial literacy education to young adults providing the all important real world skills not taught in school which are the key to the financial stability and success of future generations. We’re in a global monetary crisis caused by decades of misguided policies and the cycle of financial dependence has to be broken, literacy and self-reliance are a good start.