Blue Sky’s Elaine Stead, Rampersand’s Eloise Watson and Scale angel Connie Kuhlman on what it takes to be a startup investor
Monday, December 5, 2016/
The lack of diversity in venture capital and startup investment is a global challenge that even the most mature and advanced startup nations struggle with.
Serial entrepreneur Rebekah Campbell has called it the “elephant” in our ecosystem, while That StartupShow producer Anna Reeves simply asked: “Why?”
“In Australia, currently only five percent of female founders of tech-based startups are funded,” Reeves told StartupSmart.
AirTree Ventures’ Craig Blair said anyone who cares about society and wants to see a more even playing field should do their part to change the status quo.
“We want to make sure we counter bias,” Blair told StartupSmart.
Research shows that the presence of marginalised groups in the startup investing sector could transform the market not just Down Under but around the world.
In this series, StartupSmart speaks with venture capitalists, angels and other investors who, as minorities in the investor market, are breaking the mould.
In part one, we speak with Blue Sky Venture Capital managing director Elaine Stead, Rampersand investment manager Eloise Watson and Scale angel investor Connie Kuhlman to understand what it takes to become an investor and how one actually gets into the game.
How did you become an investor?
“I just fell into it, which is pretty much how every career decision has played out so far,” Elaine Stead tells StartupSmart.
“After my own experience raising venture capital for my startup and getting that company to the next level, I was given the opportunity to join a fund and the thought of getting involved with and helping more than one company at a time was extremely compelling.”
Stead says her drive to build a career on social impact is what inspired her to become an investor.
“My whole career from scientist, to technology commercialisation, to VC has been different roles in the same innovation spectrum, which assists to bring nascent innovations to the market to hopefully improve people’s lives,” she says.
“Now, some have a greater impact than others. An e-commerce website doesn’t have the same public good Impact as a life-saving medical device, but they all contribute to the greater social good, creating jobs and a platform for our future economy.
“I love that I get to be involved in building that.”
Before joining Scale Investors, a women-focused angel investor network, Kuhlman forged a career in human resources. It was a desire for a new and bold career leap that lead her to become an angel investor.
“I don’t want to just help women get a seat at the table – I want to help women set up and run a new table,” she tells StartupSmart.
Watson says her fascination her with entrepreneurship and turning big ideas into reality is what inspired her to pursue investing.
“When I was at uni, I co-founded a social enterprise, which I continue to chair,” Watson tells StartupSmart.
“From this experience I fell in love with entrepreneurship and knew from then that I wanted to help startups.”
Watson, like Kuhlman and Stead, says the people she gets to meet and work with one is of the best parts of the job.
“Meeting with really smart people tackling huge and interesting problems everyday and knowing that I get to play a tiny part in their success,” she says.
“[But] 99% of the time I am saying ‘no’ to people and that can suck.”
Kuhlman says her favourite part of being an investor is “the inspiration I take from our fantastic entrepreneurs and the knowledge I gain from my fellow Scale investors”.
“The more I learn the more I realise how much I don’t know,” she says.
Stead too loves the daily grind of being a VC, even thought it can sometimes be very challenging.
“The fact that I get to work with really smart people, solve hard problems and help entrepreneurs realise their dreams whether it be legacy or wealth,” Stead says.
“It’s never a linear line between start and finish, and that is an emotional roller coaster for everyone involved.
“I’ve said previously VC is more EQ [emotional intelligence] than IQ, I spend more time managing people, their reactions and emotions, and my own reactions and emotions than I do on strategic decisions and this is pretty emotionally exhausting.”
What qualifications, experience and connections do you need?
“Fortunately – in my opinion – there is no cookie-cutter mould here,” Stead says.
“Some have investment banking backgrounds, some have scientific backgrounds, some come from strategic management consulting backgrounds, some are successful entrepreneurs.
“Ultimately, those with good EQ, good networks, good strategic thought and a personality type that doesn’t need immediate gratification – because investments take a long time to mature in VC – can be a good fit.”
For others interested in becoming angels, VCs and startup investors, Kuhlman suggests looking at the underlying motivation to do so.
“Really work out why you want to be an investor,” she says.
“This is not an easy life, so you really have to have the passion for the process, be comfortable with huge amounts of variability and really care about backing amazing founders.
“From there, there’s no real rules. We meet people from investment banking, startup operators, bankers, teachers, so, much like being a great founder, go out and learn and prove yourself, then find a way in.”
Part two of StartupSmart‘s investor series comes out next week.
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