When Kendra Scott said that one thing she loved about Austin was how the community supported its entrepreneurs, the proof was right there in the room: a full-house with standing room only and we couldn’t be more grateful! A special thanks also to our speakers:
At the LP-GP Roundtable: Lu Zhang, Managing Partner, Fusion Fund; Elodie Dupuy, Managing Partner, Full In Partners; and Casey Albert, Managing Partner, Steelsky Ventures, and others who contributed to a robust and valuable discussion.
At the Panel: Kendra Scott, Founder and Executive Chair, Kendra Scott Jewelry; Iman Abuzeid, Co-Founder and CEO, Incredible Health; and Elise Liberto, Partner and Private Equity Portfolio Manager, Brown Advisory.
Some of our actionable takeaways from the Investor Roundtable were:
On Fueling Women-Led Innovation and Building a Diverse Portfolio
– Investing in women-led innovation must be a priority. As we seek to solve so many of our global problems, we cannot afford to leave out the talent of half of our population. Whether that’s through investing in women-founded companies or even better, gender-diverse founding teams, the best outcomes are delivered through diversity.
– For investors, advancing diversity is a major arbitrage opportunity that can help drive alpha/improve returns.Transitioning a private and institutional portfolio takes time and is an iterative process.
– Risk is about balancing familiarity and fear:
In selecting managers, be acutely aware of what questions you are asking different managers. Studies have proven that men are often asked about their best case scenario, while women often get asked “what can go wrong.”
On Addressing Bias
– Address bias by ensuring that you are not maintaining standards that are inadvertently more stringent due to gender or race. Neither should you expect your returns to be concessionary.
– “Holding a mirror up” to reflect and challenge one’s practices in sourcing deals, due diligence and more is key to creating opportunities for diverse founders.
– Bring others along: as one of our participating male investors shared “this is not a ‘women’s issue’, but a shared issue”— we all need to serve as a champion and convener for others seeking to invest in diverse fund managers, founders.
Our key takeaways from the panel: Beyond Unicorns, Women Changing the Face of Innovation:
On Building Billion-Dollar Businesses (the way Iman and Kendra have!)
– Building 0-1 is very different from 1-10: organization design is not to be underestimated. “Don’t mistake ‘big brand CVs’ for quality hires with shared values” (Kendra Scott)
– Challenges are also opportunities. Kendra Scott started as a wholesale brand in 2002 because direct retail was too expensive. Retail stores now account for the company’s biggest sales channel by volume. With support from minority stake holder Berkshire Partners, a private equity firm whose deal earned the brand its $1 billion valuation, the company has been opening about 15 stores per year.
– Rebalance the dynamic: by recognizing your own power to make key choices — choose your investors wisely as Iman puts it, “The proof is in the pudding — you can see their portfolios and whom they’ve invested in. If it’s not women or minorities, then I’m not even going to talk to them. I won’t engage in the conversation if they come to me, either.”
– Venture capital isn’t for everyone: so consider other forms of funding your business. “Bootstrapping” isn’t the most glamorous way to scale a business but is also a way that founders can maintain control and equity. Don’t forget customer relationships are key, and cash flow is king.
On Managing Success
– Achieving work/life balance is critical: for yourself, your partner, your family and your friends. Core to that is planning well, and Brown Advisory’s Entrepreneurs’ Strategic Planning Road Map is a helpful tool for founders.
– You CAN have it all, you just can’t do it all: make sure you have people around you who are great at taking on responsibilities when you cannot—or just because they can do it better.
On Investing in Women
– Women are driving returns. “We’ve seen so many of our entrepreneurs build sustainable businesses; that are absolutely capital efficient, this is a clear business case” (Elise Liberto). Our Partner Funds are showing the way, too!
– Female founders and CEOs in the U.S. VC Ecosystem have been outperforming their peers for years, with earlier exits and higher valuations per dollar invested.
– Emerging managers (Fund 1 -3) have continued to outperform, and while fundraising environment will continue to be challenging, we see how those focused on the fundamentals, building relationships for the long-run will continue to be successful.