Marking Cowboy Ventures’ 10 Year Anniversary

By Aileen Lee

We recently passed the 10 year mark at Cowboy Ventures, woohoo! It’s a good time to reflect on the past decade, and share excitement for the years ahead. Please read on to learn a bit about what it was like fundraising in 2012, how we named the fund, coming up with “unicorn”, our team, values and who/what we’ve invested in, and more 🤠.

The First Year: 2012–2013

A lot has (and hasn’t) changed since raising Cowboy Fund I. A refresher on 2012 — Barnes & Noble and Amazon launched the first (B&W) e-readers and Google announced Project Glass. Apple launched their first maps app (on iPhone 5), Marissa Mayer became Yahoo CEO, and Facebook bought Instagram for $1bn and went public. A top song of the year was “Call Me Maybe” and the biggest movie was “The Avengers.”

A community of smaller funds and angel investors were increasingly collaborating to fund seed rounds for the earliest stage companies — rolling up their sleeves to help startups get off the ground, and to gain some product-market fit, before raising series A.

I had a great title and comp at a firm with an exceptional brand. But, there was a pull to rely more on my intuition or “nose” about people, ideas, tech, and market opportunities which can be harder to do in a large firm — and, a pull to get involved with companies even earlier. Thanks to encouragement from friends & family (which is a big privilege), I decided to hang out a shingle as a generalist seed investor, after 12 deeply appreciated years at KPCB.

At the time, funds with solo general partners, seed-focused funds, and woman and POC GPs were relatively rare (sadly still the case, and still a big opportunity).

Some slides in the Fund I deck included “Why Seed”, making the case for why it was an attractive new investment stage LPs should consider. Another emphasized how being a woman investor was a differentiator. And, how smaller funds have historically delivered outsized returns (that hasn’t changed). P.S. Our Fund I slides were embarrassingly ugly.

Some of my favorite memories from those early days are of specific folks¹ who made time, gave feedback, made introductions, wrote a check, and referred ventures. Some people went out of their way to show support when they could have done nothing, and that put us into business. That has been formative in the culture of Cowboy Ventures — there is much to pay forward.

Naming “Cowboy Ventures”

Before raising the fund, it seemed like potentially bad luck to spend a lot of time coming up with an impactful, professional VC fund name. So, a placeholder name — “the Cowboy Fund,” was on the cover slide, named after our at-the-time 2 year old son (“Cowboy Handsome Shiny Dolphin” is the name our daughters had given their baby brother when he was a ‘pregnancy project’, it seemed like a fun project code name).

After the fund was raised, many dinners² were spent ideating on a more traditional VC name. We wound up deciding Cowboy Ventures was just right. It represented everything our creative brief spec’d: old fashioned values of integrity, hard work, being willing to brave the frontier, ingenuity, doing more with less, humility, informality, trust, and a sense of humor.

It was like kismet to find a gifted freelance designer³ to develop a set of logos with a vintage feel and nod to those old fashioned values, and a wink — to imply a lack of self-importance and a bit of luck. We haven’t made bicycles yet, still on our list :).

Some Less Fond Memories

Over years in venture, and in the Fund I raise, I often had to handle being the first and only in the room, to navigate blatant or subtle sexism, to get less benefit of the doubt than male counterparts, and to feel less connected or supported in many situations because of the culture & composition of our industry.

Raising Fund I, in a first meeting, a well-respected institutional LP asked “You have 3 kids? Wow, how are you going to do this?” When I asked if any of them had kids, they responded “sure, but all our wives stay home.” Yikes, how to exit an awkwardly short meeting.

Some people would confuse me with former colleague Ellen Pao and ask about the lawsuit. Some mistook me for Theresia Gouw or Ann Miura-Ko (tempting to go with, they are fantastic investors). Others assumed Cowboy would only invest in e-commerce, or female-founded businesses — guess they thought women would only be able to invest in shopping, or in other women?

After the Fund I raise, at SXSW, I bumped into a team member from one of my new anchor LPs. He casually asked where I was staying for a “future hotel reference”. That evening he was waiting in my hotel lobby, seemingly inebriated. He followed me around trying to entice me for drinks, I demurred. Then he followed me into the elevator, stood uncomfortably close, and aggressively propositioned me. I called my husband and got off on the wrong hotel floor to shake him. I was scared, thankful something worse hadn’t happened, and questioned my future in the industry. I decided not to let the senior members of that LP team know what happened, and was relieved to see he left that LP a few years later.

On reflection, these experiences are just a few of many that probably helped fuel a deep motivation to change our industry, and business environments in general, for the better. When different people have more power in our industry, I’m hopeful fewer women will have to endure what can feel like discouragement by a thousand crappy experiences.

“Unicorn” Origins

Scouting at seed is hard — like looking for needles in haystacks. In 2013, I wondered if a data set of the prior most successful VC-backed companies from the prior decade might yield insights to better source investments.

I started collecting info like the original company idea, sector, funding history, investors and valuations; and founder age at founding, education, prior work experience, relevant experience, how the founders met… even birth order and star signs. It turned into an elaborate spreadsheet, listing 39 VC-backed companies that had become worth over $1bn in public or private markets 10 years after founding.

At the time, Facebook was the most envied tech co, having grown to >$100bn value in less than a decade. Some VCs declared an intent to prefer backing “hoodie-wearing 18 year old [white male] dropouts.” Founders seemed to think they might be too old to be successful at 32, but hoped we’d be open minded to their startup pitch.

The “Unicorn” analysis showed otherwise. The most successful founders were in their 30s, 40s & 50s; Facebook was a once-in-a-decade outlier. I hoped the insights might help folks see the fallacy of some assumptions, encourage a closer examination of underlying venture data, and share how special it is to co-found or be a part of a breakout company.

It was a totally unexpected surprise to see Unicorn become widely used as a business term. A special thank you to Farhad Manjoo who wrote years later about the analysis and use of the term. Prior to that, we hadn’t gotten much attribution for the analysis. Getting Cowboy a bit more known hopefully helped people realize that Ann, Ellen, Theresa, and I are not the same person, and that we might have some interesting capabilities outside of women and shopping :).

Building Team Cowboy and the Cowboy Community

Ask any VC partner and they will tell you the role is more time intensive, insecurity-inducing and stressful than they expected. It can feel like a “hamster wheel” to scour for great new opportunities with no map, and to win against fierce competition, while being a go-to partner for portfolio companies, staying on top of tech trends, nurturing relationships with advisors/operators/customers, regular fundraising, and more. It can be lonely and there’s little positive feedback. Plus some firm politics can make work feel like Survivor or Game of Thrones 🤭.

Building and working with Team Cowboy and the Cowboy community has been a delightful step off the VC hamster wheel. Starting with a blank slate, we’ve been purposeful about our mission, values, team, who we invest in and how we work. Over the years, I’ve been joined by incredible investors and humans — investor Cow-lleagues Ted, Robby, Jill, Allegra and Matt, and our super talented EA Mae. I could (and have) write entire posts about each of them. When I reflect on the folks around the Cowboy table — the intellect, independent thinking, impact, access, values, heart and hustle of our team makes me proud.

Beyond our full time team, there is a rich community of values-aligned folks whose judgment and collaboration we rely on regularly. These are the founders, operators, LPs, angel investors and co-investors who we compare notes with, ask for help, listen to and learn from. You know who you are — please know how much we appreciate you.

Working with Team Cowboy is like what I imagine might be the best aspects of playing on an all-star team. There’s lots of seamless passing the ball between players to collaborate on an outcome; a mix of seasoned and outstanding younger players; a wisdom about when to move fast or slow; a love for the game; and a joy to being on the court or field together.

Cowboy’s Mission & Values

Working on mission, vision & values is something we encourage startups to do early on — and it’s something we’ve also worked on quite a bit. Our values help articulate why we exist, what’s expected of each other, and what makes our culture unique.

• Cowboys work as a team. At Cowboy, we’re “WE first”, not “me first”. The insights, acumen and relationships of each Cow-lleague feed and strengthen the Cowboy community.
• Blaze new trails. We are oriented to take early stage risk and buck conventional wisdom in all kinds of ways.
• Venture as a craft. We value the wisdom to move fast or slow when it’s warranted. We can be unusually patient in our dedication and in our relationships with others.
• Ready to ride. We aspire to be and work with “learning animals” who are continually growing. We’re low ego and roll up our sleeves to work with a positive attitude, taking our commitments and relationships seriously. Ourselves, not so much.
• Room around the campfire. Collaborating with others makes the journey more fun and more successful. An inclusive posse of founders, operators, co-investors, LPs and friends sustains us.

Our investing focus & track record

In 2012, our average seed round was $1.7m, and our average Fund I post money valuation was $9m — a little (a lot!) different than 2021. Constraints can drive more creativity and resiliency, plus better venture returns — which makes us really optimistic about the coming years.

Since then, we’ve invested in 100+ US-based companies starting at seed, across AI-powered SaaS, e-commerce, edtech, devtools, fintech, healthcare, marketplaces, robotics & logistics, security, vertical SaaS and more. Cowboy has also stayed pretty unchanged in our seed focus, curated investment pace, discipline to not chase over-hyped trends or shoot-the-moon financings, new funds every 3 years, and being a tight-knit, flat team with a high bar. We don’t publicly share our financial returns, but we’re also really pleased with how things have progressed financially. There are many ways to drive great returns in venture, and we’re excited to keep doing things in the disciplined, focused way we’ve developed over the past decade.

In terms of who we invest in. Sometimes we invest after the founders have figured out some early product / market fit. We’ve also developed a specialty investing “pre-product” — when the founders need money and help to build the product and take it to market. We’ve loved backing “category creators”- founders have an innovative idea in a potentially big, but not yet clear TAM. We invested pre-product and/or in category creators like Dollar Shave Club (our first Fund I investment, and first unicorn — thank you, team DSC!), Drata innovating in continual compliance and security, Guild Education re-imagining education and career mobility, Homebase as SaaS for managing SMBs, Mutiny defining growth-as-a-service , SVT in logistics automation, Tally in helping consumers reduce credit card debt, Textio in AI- driven language guidance, Uno Health in managing social determinants of health, Vic.ai in AI for accounting, and many more.

We also aim to be a firm known for helping under-represented founders thrive. In our most recent fund, 48% of our investments are founded/co-founded by a woman and 30% by a person of color. We also love working with founders to build out diverse leadership teams and boards, and to be thoughtful about managing culture and team composition.

And three years ago, we added additional sector expertise plus leading next-gen minds to our team in Robby and Jill. Two decades of work with a variety of companies have given Ted and me passion to be generalist investors. As markets have grown and the tech ecosystem has become more sophisticated, it’s been important to add more focused domain expertise under our roof. Amanda “Robby” Robson and Jillian Williams have added incredible networks, thought leadership, capabilities and heart to the Cowboy Posse, working with software infrastructure/security oriented companies, and enterprise and consumer fintech companies, respectively.

Beyond our financial track record

For Cowboy-backed teams, we hope working with us means much more than money. We try to get to know what’s important to you personally, your lived experience, power alleys and blind spots. We are driven to help founders and their teams grow as high impact, growth-mindset, and inclusive leaders, as well as be a trusted backstop for you personally through the highs and lows.

Founders have told us we’re unusual in our human touch. We will be straight with you and offer a steady hand in helping manage through ups and downs, leveraging extensive networks and elbow grease to lighten your load. It’s gratifying when founders share in reference calls that we are “their first call when things aren’t going well, at work, or otherwise”; “they helped make some of our first critical hires and avoid some potentially fatal mistakes”; “their storytelling, help and rolodex are out of this world”; or “they are my most growth-mindset investors.” We’ll also aim to help you build a more resilient & diverse culture than the stereotypical tech company — which should drive greater financial success while also making the world a better place.

We’re also proud to each be a part of other communities like All Raise, BlckVC, Destination Home, Modern Angels, NextGen Partners, and Screendoor Partners. We get pumped to leverage our position in the VC ecosystem to have a positive impact on the communities around us.

Sharing Insights & Lessons Learned

I’m a painfully slow writer — fortunately Cow-lleagues Amanda & Jill are much better at it! Ideally a few times a year, I get my act together to synthesize some thoughts. Some hopefully useful bits if you haven’t seen before:

• The original Unicorn post
• On imposter syndrome and fomo — Nobody is Batting 1000
• Why your next board member should be a woman (old, but still relevant)
• Fundraising Advice for Female Founders, at Y Combinator
• This talk was titled “Unicorn Lessons”, I kinda like “Finding your inner dolphin”
• And from our awesome team — Breaking Into & Thriving in VC and Cowboy Resources to help you track DEI progress

Looking Ahead

Navigating this downturn will be new territory for many. While some aspects of aging are less appealing, a real benefit is having “crystallized wisdom”⁴ from being a “three cycle operator/investor” (the .com boom and bust, the recession of 2007–09, and now). There are a lot of lessons to share from navigating previous market cycles, hype cycles, “peacetime vs wartime” hires and teams, plus helping with strategy, focus, process, and knowing what matters.

We’re super excited to share this experience and rolodex to help teams build incredible companies — as downturns have historically been among the best times to build a breakout tech company.

I’m grateful for what we’ve built in the past decade, and excited about the journey ahead with Team Cowboy. Thanks again for reading — and if you’re looking for some great partners to ride with you out into the frontier, please find us at Cowboy.VC.

[1] Eternally grateful to people who stepped out to invest, or help in different ways. Investors like Steve Anderson, Michael Dearing, Steve Harrick, Mike Maples and Josh Kopelman encouraged me, made LP introductions, and referred investments. Founders like KR Sridhar at Bloom Energy, Jenn Hyman at Rent the Runway and Susan Feldman at One Kings Lane, and former KPCB partners like John Doerr, Brook Byers and Eric Keller made time to be references. Folks at institutional LPs like the James Irvine Foundation, Jasper Ridge, Legacy Venture, Makena, Northern Trust and Truebridge, in addition to individuals with the capacity to invest personally went to bat to invest in me/us.

[2] With help from creative friends like John Fernandes, the late Kevin McSpadden ♥️, Julie Haddon, and my inimitable husband Jason Stinson (the man of many costumes — if you missed this during WFH, check out the link).

[3] Helena Seo, now head of design at DoorDash — Thank You!

[4] From Strength to Strength, by Arthur Brooks — a recommended read for folks in the “back 9” as we like to call it :)