How Precursor Ventures is Bringing Venture Scale Diversity to Innovation
Earlier this month Sydney Thomas and Charles Hudson shared how they found their first 80+ investments through their proprietary deal flow. Some interesting stats about the Precursor Ventures portfolio are as follow:
· 30% of their founders identify as women.
· About 17% of their founders identify as African-American/Black.
· About 6% of their founders identify as LatinX.
In a world where seed funds are dominating the early stage venture market (48% of new seed fund managers in 2017 raised funds that currently are sub-$25MM), a differentiated thesis is instrumental to stand out in a highly crowded market of peer VCs, LPs and entrepreneurs. And, one of the elements of a unique thesis is proprietary deal flow.
In the case of Precursor’s deal flow, one of the firm’s competitive advantages is a strong portfolio of seed stage entrepreneurs with diverse backgrounds and perspectives.
The following interview with Sydney highlights how she works with a diverse group of founders:
1. Why did you decide to become a venture investor?
I had a really roundabout way of becoming a venture investor. I started my career in the public sector, drafting legislation to decrease the wealth gap. After exploring a few routes in government, I decided that the private sector held immense opportunity to make an even greater impact. I headed to Berkeley-Haas for my MBA and during business school, I interned everywhere to understand the breadth of opportunities available. In my second year in business school, I started working in product marketing and product development roles in startups. Once I began working with smaller and smaller startups, I had more exposure to the venture capital side of the equation. I realized after talking to and learning from the venture capitalists, that I was much more excited about their roles. I loved the idea of constantly learning from entrepreneurs, working creatively to help them solve problems, and helping them build large companies with the potential to impact so many people.
2. Given that the funnel of companies you see are fairly large, how do you effectively manage your pipeline and at what point during the diligence process do you bring the partnership in?
We try to be very thoughtful about the fact that entrepreneurs are very busy. So, Charles and I will often take the first 30 minute meeting together so we can make decisions quickly. We use software to manage all of our deals. Affinity works wonders to ensure we know exactly where we stand with each company.
3. How should founders think about the role of a venture associate/principal pre-, during and post investment?
I think the founders should think of junior partners as advocates and hustlers. We have a lot to prove and so are willing to go above and beyond in order to make you successful. Personally, I try my best to be helpful in every way possible. I work just as hard getting a founder a discount to a service she uses as I do reviewing pitch decks.
4. When a deal is done, what’s the best way for the founder to leverage the entire team they work with (partner and pre-partner team members)?
Each VC firm is so different. I would ask us any question that you’re stuck on and we can help you navigate the landscape of the firm. At Precursor, we wrote a user manual to help our founders with this exact question. In it, we cover some key things like: this is what Charles does, this is what Sydney does, here are some ways we can help you, etc. We’ve found that this guidance has been illuminating both to first time founders and second time founders given the idiosyncrasies of VC firms.
5. What are 2–3 critical traits that you look for in a founding team?
1) Thoughtfulness: The team has thought through problems/issues well and is approaching a market in a novel way
2) Cohesion: The team is working together well.
3) Humility: The team is prepared and willing to learn from each other, their investors and their peers.
Sydney’s Bio
Sydney is the Investment Associate and Head of Operations at Precursor Ventures. She is also the co-founder of the Women of Color in VC network, an Advisor to Skydeck, the Berkeley Accelerator Program and a VC-in-Residence at Pipeline Angels.
Prior to joining Precursor, Sydney gained experience working in technology startups in business development and product marketing. She has done everything from writing federal SBIR grants to managing a customer success team.
Prior to her work in tech, she managed public-private partnerships for the NYC Government’s Department of Education and Office of Financial Empowerment. Over the course of her tenure, she drafted federal legislation, negotiated a multi-million dollar contract and received a full-ride scholarship to her business school of choice.
Sydney graduated from Berkeley with her MBA and Duke with her BA.
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The Precursor team has done an excellent job taking their unique position in the seed stage venture market, further building their firm brand’s and thought leadership, and bringing more diversity and inclusion to innovation.
If you’re thinking about personal/firm branding or are exploring PR/Branding services, check out the resource list* below:
· Brunswick Group — specialists in crisis management
· Bulleit
· Edelman
· Propllr
· SparkPR
* List co-curated with Kristen Ostro of Strut Consulting (fund operations and infrastructure building expert for emerging fund managers)
