How My Experience as an Investor Prepared Me to Be a Founder

Photo: Courtesy of Naomi Shah

It’s difficult to think of anything in my life that has required a wider or more dynamic skill set than founding and running a company. Unlike the way founding is sometimes described in pop culture and media, you can’t just have great ideas for products and services. You have to be capable of building a healthy company culture, understand how markets evolve, and anticipate what consumers will want in the future. Personally, the last year and a half have honed a higher tolerance for uncertainty, an irrepressible curiosity about our market and users, and the ability to communicate exactly what the company is trying to achieve to inspire all of our people. 

While there’s nothing quite like running a start-up, I’m grateful that I had an opportunity to work at a venture capital firm before taking the helm of my company Meet Cute. Because VCs work directly with founders every day, they need to be capable of seeing the world from a founder’s perspective, which means identifying gaps in the market, crafting the right narratives about promising companies and ideas, gathering a lot of information from disparate sources, and making informed decisions in the face of incredible uncertainty. Due diligence is the central task for VCs, but they also have to be willing to take risks on the companies they believe in. 

Investors and founders are on the same team. The best partnerships are often described as a marriage. That analogy rings true especially because of the ups and downs of founding over the years, which requires an intense trust in the people you work with that they will be there when you need it. Aligning on the direction of the company, personnel, and emerging market opportunities is critical. Ahead, I’m sharing some of the many lessons I learned as an investor that have also served me well as a founder.

Lesson #1: It all starts with curiosity.

Successful VCs are always on the lookout for companies that capture and hold their interest and users’ trust. Founders should want to work with investors who have thoughtful questions about their products and services, understand their industry, think differently, and believe in the founding team. It isn’t just a matter of cutting a check and hoping for a quick return. In turn, VCs should add value by thinking creatively about what the market will look like in the future and advising the company. I learned from shadowing partners at USV that the best VCs were also the best listeners, and think of VC as a service industry. 

This starts with genuine curiosity about what a company does and what impact it could have on the world with the right guidance and resources. The average holding period for VC investors is eight years. This is a reminder that investors need to be mission-aligned as they will work with companies over the long term and are investing in the sustainable success of their portfolio companies. 

VCs and founders should establish open lines of communication right at the outset. I’ve never been afraid to ask questions or contact experts who know more than I do about a subject, and these skills served me well as an investor and a CEO. 

When I was at the VC firm, the best way to learn about early-stage companies was to work directly with them on forecasting, marketing strategy, fundraising, and other issues and consult with experts outside of the company to bring new perspectives to the table. The same collaborative mentality is an essential part of the culture at Meet Cute today. If we need to talk to an expert about something specific, we are not shy about asking and learning. Time and time again, smart people in the industry who we look up to make time for those who are genuinely curious. 

Lesson #2: Make the best decision possible with incomplete information.

Early-stage investing offers unique benefits, such as the ability to identify innovative companies before other investors, help steer those companies in a positive direction, and ultimately secure more growth over time for taking on a much larger risk. These are all reasons why it’s no surprise that early-stage VC investments have surged over the past decade from $14 billion in 2011 to just over $47 billion in 2019. Early-stage investing is on pace to set a record this year. The first quarter alone saw greater deal value than the entire year in 2011.  

Early-stage investing also comes with quite a few obstacles, and a lack of information is one of the biggest. Early-stage investors don’t have as much data about a company’s growth, operational efficiency, etc., so many of their decisions are based on pattern recognition and intuition. The founders of early-stage companies face similar constraints. There’s no playbook for what many of these companies are doing, so we have to be comfortable making decisions with limited information. Just as investors need to accept the fact that they will sometimes make the wrong call, founders should be willing to fail. If everything is going too smoothly, you should ask yourself if you’re scaling ambitiously enough. 

All of that said, founders and VCs should be as fastidious as possible in their research. Due diligence as a core focus means putting in the time to learn and develop opinions and perspectives. But due diligence always has to be placed in the context of the realistic constraints you face, especially in building something completely new, and knowing what level of risk you’re willing to tolerate. 

Lesson #3: Always tell your story

A company’s story is integral to its identity, and it serves as one of the most effective ways to reach your audience and let them trust our brand, galvanize employees around a common message, and attract the best investors. As an investor, I frequently told stories about innovative companies to convince my colleagues that we should back them, often in the form of an investment memo or a short and sweet presentation in a team meeting. I also helped start-ups craft their stories when they launched fundraising rounds or needed to prepare for board updates. Storytelling is the most powerful tool we have as humans and we know that the emotions of a story are remembered far better than facts.  

Moreover, I’ve realized how sharing your story internally is vital to improving morale and helping employees rally around a consistent set of values and objectives. Gallup reports that only 27 percent of employees strongly believe in their company’s values, while less than half say they strongly agree that they understand what the company stands for or what sets it apart. By telling the company story and vision often and consistently, the team can rally around what they’re working toward and why it matters. 

Reflecting on the last year, there is a significant overlap between my experiences as an investor and a founder. By making a conscious effort to understand how my experiences tie into and bolster one another, I hope that I can show where founders and the VC firms that support them can build stronger relationships and thereby more unique and impactful products in the world. 

Photo: Courtesy of Naomi Shah

About the author: Naomi Shah is the founder and CEO of Meet Cute, a venture-backed media company that has produced over 300 original light-hearted romantic comedies in podcast form. The company celebrates human connection and the full spectrum of love with the core mission of having every person feel like they are reflected in Meet Cute stories. Since its inception in February 2020, the podcast has had over two million listens across over 150 countries and has been featured in the top 10 of Fiction on Apple Podcasts and Spotify. 

Before starting Meet Cute, she was a member of the investment team at Union Square Ventures, a technology venture capital firm in New York, where she spent most of her time talking to companies in the consumer and well-being space. Prior to that, she was a macro equities trader at Goldman Sachs and studied mechanical engineering and human biology at Stanford University.

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The One Question 99% of Male Investors Asked This Start-Up Founder

photo credit: Sight Unseen 

Today at the inaugural Vanity Fair Founders Fair in Brooklyn, Neil Blumenthal, co-founder and CEO of Warby Parker, openly shared his personal experience with raising money and how much it differed from his wife’s, Rachel Blumenthal, experience.

“When my wife was raising money,” the CEO shared with the crowd, “every male VC would ask, ‘How do you spend your time?’ She would say, ‘What do you mean?’ What they meant was, ‘You have kids.’” This was always a deterrent for male investors.

Rachel, who was in attendance, is the founder of the subscription kids’ clothing startup Rockets of Awesome. The brand sends a personalized box of 12 pieces of clothing per child at the beginning of each season, four times a year. Gwyneth Paltrow is a notable fan.

Neil went on to say, “When I raised money VCs would use kids as a reason to bond with me. ‘Oh I have a great nanny recommendation.’ It’s insanity.”

To her credit, Rachel did not go with the 99% of male investors who asked her that question. Nor was she deterred. Rockets of Awesome recently raised $12.5 million in Series A funding. The round was led by new investor August Capital, an early backer of e-commerce giant Zulily, joined by existing investors Forerunner Ventures and General Catalyst. This infusion of capital brings Rockets of Awesome's total fundraising to just under $20 million in the six months since launch.

Other notable takeaways include actress and founder of Draper James, Reese Witherspoon, telling the audience, “A guy has one hit and they say he’s going to win an Oscar. A guy has one movie at Sundance and he gets Jurassic Park,” she explained. “A woman has a hit at Sundance and she has to make six more movies.”

Reese also told the crowd, “If it’s not moving, monogram it.”

For more BTS on the day follow along on our IG Stories here.

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Filmmaker & Cancer Survivor Encourages Young Women to "Dream, Girl"

Erin Bagwell (L) and Komal Minhas (R)

It was a Kickstarter trailer that lead to a cold email that lead to a life-changing partnership. “It was an instinctual ‘I have to be a part of this,’ there was no doubt in my mind,” says Komal Minhas. “I knew I had to give it my all, and what that meant for me was being totally authentic, totally honest with why the project impacted me so much and why it meant so much to me.”

“This,” is Dream, Girl. A documentary from creator Erin Bagwell that features the empowering stories of female-led companies and their founders. From fashion to tech to non-profit, it explores the challenges, successes, the conventions that still hold women back, and the dreams that pull them forward. It is framed by Bagwell’s and Minhas’ struggle to make the movie.

When Bagwell launched the project on Kickstarter, the two women were complete strangers.

Minhas was in Italy on what was supposed to be vacation. Like thousands of others she saw the trailer one night before dinner and told her partner, Mitch, “I have to be a part of this, I have to figure this out.”

“I knew I had to give it my all, and what that meant for me was being totally authentic, totally honest."

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Initially launched with a goal of $57,000, Bagwell was seven days and $18,000 away from reaching her target, when the project received a boost from author and life coach Marie Forleo. Forleo agreed to blast the Dream, Girl mission to her email list of about 300,000 people. Money started pouring in and so did the emails. One of which was from Minhas.

“Erin went from having $30,000 to $104,000 in three days,” says Minhas. “The amount of press, the people-- when you’re cutting through the noise to get to someone who is that busy, who is getting cold attention, going from zero to hundred, I knew I had to stand out.”

Before she made any “hard ask,” Minhas thought about what she could offer. She had her own company, Montreal-based KoMedia, which she founded at 23. “I knew I could invest a little bit of the money I had saved up from the year of operating my company,” she says. Beyond that she could strategically supply “camera equipment-- I had a couple of 5D cameras and I had some audio equipment.” In her first email to Bagwell she outlined every provision she could make. Drafting what she called a “have-to reply.” Minhas says she “created an opportunity for Erin to respond, making the option of saying ‘no’ incredibly difficult.”

“I didn’t want to be overbearing,” she says. “I kept it light, but it was a rich ask and also, offer.” The response was not immediate. “It took Erin three days to reply after I sent a follow-up email. It felt like ages to me because I knew this was went I meant to do.”

Three nights later the two were on a Skype call. It was midnight in Naples, the connection kept cutting in and out, but where the internet failed, the synergy between the women succeeded. “We told each other our life stories, why we were each doing what we were, and I again reiterated the offer, the strengths I knew I had and what I could bring the partnership.” Bagwell, she says, “she was right there with me."

"Throwing it down, not being afraid to ask, but also, not being a crazy person,” that’s how she got in the door. “It’s a strange line to toe,” she says, but acknowledges, “I prefer more over less. Fortunately in this situation, Erin did too.”

From a Skype call, an in-person meeting, emails in between, and Minhas landed on set a couple of weeks later.

That first $104k gave the filmmakers enough funding to make it through about 8 months. “For the first time,” Minhas says, “I didn’t take a salary. It was almost a full year before I did because we were bootstrapping.” In the summer 2015, lead by investor Joanne Wilson, who appears in the film, they did a round of Angel funding. That raised another $100k. They did one final round of friends and family to “make it through the finish line.”  

Though Minhas had never raised for business, she had done work raising money for charity. For instance, while at university she spearheaded a campus fundraiser that raised over half a million dollars for the Canadian Cancer Society. “I knew how to magnetize money for a cause,” she explains, “but when it’s a business you have to include how you’re going to share long-term revenue projections, understand distribution, and we had to convince our investors that beyond the social impact mission of the film we would bring them returns, and hopefully great returns.” It was a “learning curve when we were starting to pitch.”

And then there was the big curveball. “Back in March,” says Minhas, “I was actually diagnosed with cancer. I am survivor and was diagnosed cancer free a couple of weeks ago. But when we got the news March 2nd our premiere was set for May 26th at the White House. We figured it out and did our best.”

Erin Bagwell, third from left and Komal Minhas, fourth from left at the White House screening. 

They premiered the film to a private, 190-person screening for women entrepreneurs, followed by a round table discussion led by Diana Doukas, the director of the White House Business Council.

The response was overwhelming and powerful. “It took two years to create the film and we’re anticipating it will take a full two to fully maximize the distribution. We’re not only creatives, but we made a film about business and we are running a successful business.” Since launching in June in New York, Dream, Girl has had over 100 screenings in seven different countries. They are planning to scale that number to over 1000 in the next year.

Another arm of the goal is to give young women “better examples of what wealth and what wealth in business looks like,” says Minhas. “We don’t want to be Wolf of Wall Street. That’s not our jam, but it’s a no-brainer that a woman can be in power.

"We don’t want to be Wolf of Wall Street. That’s not our jam, but it’s a no-brainer that a woman can be in power."

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Minhas and Bagwell are also turning the forty plus hours of unused footage into a web series called, Your Moment of Ambition, which they are looking to launch in 2017. The series will be 20 episodes at about 2 minutes each. "There are so many stories that couldn't make it into a film,” says Minhas. “Those of sexual harassment to a professor at Wharton talking about why it’s also a no-brainer that every man should be a feminist.”  

They are not only incredibly inspired by the people they interviewed, but by what Minhas says are “the next generation of feminists like Zendaya and Rowan Blanchard. These are really woke women. They have Queen B to look up to and some of them are just thirteen, fourteen years old.”

She says “Maybe Gen Z won’t see the work and effort it took to get here,” but “there will be no barriers in this generation's mind that they can be limitless.”

Dream, big. Dream, Girl.

For more information or to host your own screening and bring Dream, Girl to your community, visit the site here. 

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