5 lessons from my first 10 weeks in VC

Over the past 10 weeks, I have been living out my professional dream at Chingona Ventures, an opportunity which I have been cultivating since October last year. Like many other millennials, I spent the pandemic taking inventory of my life and career goals. When I knew I had a year to prepare for Kellogg, I had dozens of conversations with helpful people to try to approach the opportunity with greater focus. I was intrigued by early stage venture investing, as it seemed like a job where I could make use of my oldest of 5 super-connector nature, my curiosity, my interest in technology and scaling companies, and my passion for helping underrepresented founders succeed.

With nudging from Elias Torres, a long time mentor (rockstar founder, personal hero, and soon-to-be Unicorn), I connected with Samara, a mutual friend, fellow Latina, VC titan, and champion for inclusion and transparency in the VC ecosystem. I have taken 144 meetings with 105+ founders across 84 companies headquartered in 10+ cities and working across over a dozen industries: from fintech to avatars, smart homes to SMB support, cybersecurity to beauty, supply chain to gaming. I have written one pagers and investment memos, learned from founders and other investors, researched markets I didn’t even know existed, helped portfolio companies think through their product strategies, and supported the creation of documentation for LPs. Best of all, I have had a front row seat to how two successful Latina investors, whom I deeply admire, do their jobs. Their commitment to excellence, transparency, and inclusion, and the generosity they have demonstrated in how they have made room for me to grow my investment skill set has imparted these top 5 lessons as I launch my VC career:

1. Focus: VC is an industry that naturally lends itself to going a mile wide and an inch deep. Especially in a generalist fund, we are expected to be knowledgeable and informed across a broad range of industries, so that we are able to assess deals quickly. Layer onto that the beginning of my MBA, with so many options at my fingertips, the urge to take off in a million different directions is very real. Samara has reminded me time and again that there is a direct relationship between setting clear, focused goals and actually being able to achieve them. We expect focus from founders too. There is so much possibility and potential at the early stages. We like being able to see many paths to a big exit, but the best founders are the ones that, among all of the noise and temptation to chase every path, identify the top priority and rally their team around starting there. Focus is critical to optimizing time and resources. Focus makes a great investor.
2. Use data to train your instincts: Instincts are important in VC. As responsible investors committed to creating a more inclusive ecosystem, it’s crucial to recognize the experiences that shape our instincts; to leverage data and frameworks in our assessments. As a former product manager, I found my instincts naturally drawing me towards questions around infrastructure, development, roadmap, and scalability, because the data from my lived experience tells me that those are good indicators of potential; getting a handle on these areas helps me best assess the viability of an opportunity. It has also helped me add value to portfolio companies, offering my product experience to founders during board meetings and suggestions around user experience and data security. Every investor has deals that naturally excite them and what I am always asked to do at Chingona Ventures is to train my instincts by asking myself Why? Why this deal? Why this industry? Why this founder? At Chingona Ventures, we use templated frameworks to mitigate bias from our assessment of companies. Part of that assessment asks us to document what we did and didn’t like about a deal. I am excited to look back on that documentation in the coming years to see where I was right and where I was wrong.
3. Valuations are tricky at early stages, and have big downstream consequences: Current market conditions and the commoditization of capital has caused valuations to skyrocket in recent months. We have met with many founders raising bigger rounds at higher valuations than ever before, often at the advice of other investors. It’s important to think about the implications of those decisions on future rounds. Going forward, I will take with me the questions I have often heard asked of founders in our office: what will the next round look like if you are raising a $10M seed or preseed? Will this raise and your milestones get you far enough to merit an even higher Series A? While it can be appealing to have money in the bank, and it’s certainly good for early investors, founders should be encouraged to consider what they will have to deliver in order to avoid a down round and excess dilution in the future with those early terms.
4. In a world where speed wins deals, transparency is the fastest way to build trust: Before every initial meeting with a founder, Chingona Ventures provides them with a document outlining our investment process. This document includes helpful information, so that founders know what to expect from us. In nearly every meeting, founders acknowledge the rarity of this level of transparency in their raising journeys and thank us profusely. From this first simple action, Chingona Ventures demonstrates that we are true trustworthy partners that founders can count on; that we want to help them succeed. Today’s market is crazy. Speed wins deals, but Venture is about relationships, and building trust can take time. Being transparent is one way to start bridging the gap, and I’m grateful to have learned this early in my venture career.
5. Operate from a place of confidence: The competitive nature of VC can be a slippery slope for mentally approaching conversations with founders and other investors from a place of deficiency. The fomo can be very real, whether it’s about investing in certain deals or verticals, or stacking your role in the ecosystem against others’. I have spent the past 10 weeks learning from great investors that frequently remind me of the value of my background, by being examples of confidence in their own backgrounds. I have watched Samara pass on deals that investors she really admires are investing in because her experiences gave her a different understanding of the opportunity. I have watched Fabi get into the weeds with fintech founders about their products because it’s a space she deeply understands. When you operate from a place of confidence in what you bring to the table, you make better decisions. You treat others with respect and gratitude. And you inspire those around you to do the same.

I am so grateful to have been able to launch my venture career at a fund that walks the walk, with humans who are deeply rooted in their values. If there’s one piece of investment advice I can share with others at similar stages in their careers, it’s to invest in yourself by surrounding yourself with a team that cares as much about your development as they do about their own success. I look forward to paying all of these lessons forward and can’t wait to see where they ultimately lead me.