Soraya Darabi on Social-Media Startups (Podcast)

extra special guest. Her name is Soriah Durrabi. She is a venture capital and impact investor who has an absolutely fascinating background working for Verset with the New York Times social media group, then with a startup that eventually gets purchased by Open Table, and then becoming a venture investor that focuses on women and people of color lead startups, which is not merely a way to quote unquote do good, but it's a broad area that is wildly underserved by

the venture community and therefore is very inefficient, meaning there's a lot of upside in this. You can both do well and do good by investing in these areas. I found this to be absolutely fascinating, and I think you will also if you're at all interested in entrepreneurship, social media startups, deal flow, how funds um identify who they want to invest in, what it's like to actually experience an exit as an entrepreneur, I think you'll find this

to be quite fascinating. So, with no further ado, my conversation with t M VS Soriah Dorobi this is mesters in Business with very renaults on Bluebird Radio. My special guest this week is Soriah Darraby. She is the co founder and general partner of t m V, a venture capital firm that has had a number of exits despite being relatively young. Six of t MV startups are led

by women or people of color. Previously, she was the co founder of food Spotting, an app named App of the Year by Apple and Wire that was eventually purchased by Open Table. Soriah Darabi, Welcome to Bloomberg. Oh my goodness, Barry, thank you for having me. I've been looking forward to this conversation since our previous discussion. We were on a Zoom call with a number of people discussing blockchain and crypto and it was really quite fascinating, and I thought

you had such an unusual and interesting background. I thought you would make a perfect guest for the show. Let's start with you were manager of Digital Partnerships and Social Media at the New York Times when social media was really just ramping up. Tell us about what that was like. Well, tell us what you did in the late aughts at the Times. Oh. Absolutely, I was fresh faced at a University.

A had recently graduated with mostly a journalism concentration from Georgetown and did a small stint conte Nast right around the time they acquired Reddit for what will soon be nothing because red it's expecting to i PO around fifteen billion and m that experience it read it really offered me um a decent understanding of convergence, you know, what was happening to digital media properties as they partnered for the first time with nascent but scaling social media platforms,

and so The New York Times generously offered me a role that was originally called Manager of buzz Marketing I think that's what they called social media in two thousand and six, and then that eventually evolved into Manager of Digital Partnerships and Social Media, which in that sence meant that we were aiming to be the first media property in the world to partner with companies that our household named today but back in the day were fairly unknown

to facebooks and the Twitters, of course, but also platforms that really took off for a while and then um plateaued, but potentially you know, the Tumblers of the world. And it was my responsibility to understand how we could effectively generate um an understanding of the thing demographics of these platforms, have a kid potentially bring income into The Times for working with them, but more importantly, how the journalists could

authentically represent themselves on new mediums. And so that was a really wonderful role to have directly out of university. And then you know, introduced me to folks with whom I still work today. Huh. That's quite interesting. So when you're looking at a lot of these companies you mentioned Facebook and Twitter and Tumbler, um, how do you know if something is going to be a Facebook or my Space, a Twitter or a tumbler, what's gonna survive or not?

When you're cutting deals with these companies on behalf of the Times, are you thinking in terms of, hey, who's going to stick around? That wasn't that much earlier that the dot com implosion took place prior to you starting with The Times. It's true, although I don't remember the dot com implosion. So maybe that naive Ka helped because all I had was enthusiasm, unbridled enthusiasm for these new companies, and I I operated then and now still with a

data approach to business. You know, testing out new platforms and and trying to track the data. What scaling at? What velocity is this platform scaling? And can we hit your ride on a rocket ship if they will still allow.

But a lot of our partnerships then and now as an investor are predicated upon relationships, and so you know, it's most I think terrific investors that I listened to who I listened to in your show, like at least we'll talk to you about the importance of believing in the founder and the founder's vision and um And that was the case back then, remains the case today. So when you were at the times you your tenure there very much overlapped the Great Financial Crisis. You're looking at

social media? How did that manifest the world of social media when it looked like the world of finance was imploding at that time? Well, it was a very interesting time. I remember having quite literally thirty second meetings with certain um as. He would run upstairs to my floor and the eighth floor to talk about a deal book app that we wanted to launch, and then he would run back down to his death to do much more important work. I think um in in reviewing the financial crisis to

the world. So thirty second meetings aside, uh, you know, it was considered to be in some ways a great awakening for the web two point oh era. Um, as the economy was bottling out like any recession, it also offered a really interesting opportunity for entrepreneurs, many of whom had just been laid off or um, we're looking at this as a sizeable moment to begin to work on

a side hustle or a life pursuit. And so there's you know, it's unsettling, of course, any recession or any great awakening, but you know, lemonade lemons, when the opening door closing, there was a there was a true opportunity as well for social media founders, UH, founders focusing on convergence in any industry really, many of which were predicated in New York to begin, um, you know, tinkering on

an idea that could ultimately become quite powerful. Because if you're at the earliest stage of the riskiest asset classing venture, there's always going to be seed funding for a great founder and a great idea. And so I think, um, some of the smartest people I've ever met in my life, I met at the onset of the aftermath of that

of that particular era in time. So you mentioned side hustle. Um, Let's talk a little bit about food Spotting, which is described as a visual geolocal guide to dishes instead of restaurants, which which sounds appealing to me um and it was named app of the Year by both Apple and Wired. How do you go from working at a giant organization like The Times to a start up with you and a co founder and a handful of other coders working

with you. Well, five or six minutes a week after my day job at the New York Times, I would go to networking events with technologist and entrepreneurs after hours.

I saw that as as a priority UM to be able to partner from the earliest infancy with interesting companies for that media entity, I needed to at least know who these founders were in New York and Silicon Valley, and so, without a true agenda other than you know, keen curiosity to learn what these businesses were all about, I would go to the New York Tech meet Up, which Scott Hyperman of meetup dot com is now a cherished LP and my fund would create and back then

the New York tech meet up with fewer than forty people. I believe it's in um, the tens of thousands now in New York City alone, and so UM it was there that I met some really brilliant people, and in a particular a gentleman my age who was building a cloud computing company that UM you know it was was essentially architraging aws to repopulate consumer facing UH cloud data services for enterprises BT BBC play and we all thought it would be Dropbox. UM the to be ultimately wasn't.

But I will tell you the people whom I worked at that startup because I left the New York Times to join that startup, so this day remained some of the most successful people in Silicon Valley and Alley. And actually one of those persons is a partner at our firm now darsh and he was the co founder of that particular company which was called drop TODAYO. So I stayed there very quickly. I was there for that six months.

But as that startup, I observed how a young person my age could build a business for his bc UH.

He was the son of a VC and so he was exceptionally attuned to the changing landscape of venture and you know how to position the company so that it would be attractive to the ore ease of the world and the the b f j's and define those for us are pardon UM still today very relevant and very successful venture capital firms UM and in particular, they were backing a lot of the most interesting ideas and a whip two point out era when I joined this particular

startup in in two thousand and ten. Well, that startup was acquired by Facebook and I often say no thanks to me, but the mafia that left that particular startup continues to this day to co invest with one another and help one another's idea succeed. And it was there that I began to build the confidence I think that I really needed to explore my own entrepreneurial ideas or to help accelerate ideas. And Food Spotting was a company that I was advising UM while at that particular startup

that was really taking off. This was in the early days of when Instagram was still in data and we observed that the most commonly posted photos on Instagram were of food, and so by following that lead, we basically built an app around and activity that continues to take place every single day. I still see food photos on Twitter every time I opened up my stream and decided to match that with an algorithm that showed folks wherever they were in the world, and in Greece, I'm I

want to Bendi Coopka, or I'm in Japan Okinawa. We helped people discover not just the Michel unrated restaurants or the most popular local kant in New York City, but rather what's good dish that they should be ordering. And then what the app was extremely good at was populating beautiful photos of that particular dish and then mirroring them with accredited reviews from the zagats to the world, but also popular celebrity chefs like Marcus Damilton in New York.

And that's why we took off, because it was a cult beloved app of its time. Back when there were only three geolocation apps in the iTunes app store, it was We and Twitter and four Square, so there was a first move advantage. Looking back in hindsight, I think we sold that company too soon. Open Table bought the business a year and a half later, Priceline bought Open Table. Both were, you know, generous liquidity events for the founders

that enabled us to become angel investors. But sometimes I wish that that app still existed today because I could see it being still incredibly handy in my day to day life, to say the least. So so did you have to raise money for um Foods spotting or did you just bootstrap it? And how did that experience compare with what that exit was like we did. We raised from tremendous investors like I didn't thinking of Felicia's Ventures, whom I think of as being one of the best

angel investors of the world. He was on the board, but we didn't read that much capital before the business was ultimately sold. And what I learned in some of those early conversations, I would say, but may have ultimately led to l Oyes and term sheets, was that so much of m and as about whining and dining. And as a young person, particularly for me, you and I discussed before the show variable from New York. I am not from a business oriented family to say the least.

My mom's in academic my father was a cab driver in New York City, and so there are certain elements of this game raising venture and ultimately trying to exit your company that you don't learn from a business book, and I think navigating that as a young person was complicated. If I had to speak economically, m quite quite fascinating.

What is purposeful change? Well, the word purpose, I suppose, especially in the VC game, could come across as somewhat of a cliche, but we try to be as specific as possible when we allude to the impact that our investments could potentially make, and so specifically we invest in five verticals at our early stage New York City based

venture fund. We invest in what we call the care economy, which is companies making all forms of care of elder care to pet care to healthcare more accessible and equitable. We invest in financial inclusion, so this is a spin on fintech. These are companies enabling wealth creation, education, and most importantly literate see for all. Something I think is really important the democratization as financed. We invest in the future of work, which our companies creating better outcomes for

workers and employees alike. We invest in the future of work, which are companies creating better outcomes for workers and employers alike. We invest in purpose as it pertains to transportation, so not immediately intuitive, but companies creating transparency and efficiency around global supply chain and mobility. I can talk about why we pick that category in a bit. And sustainability to tech enabled sustainable solutions. This is our companies optimizing for

sustainability from process through product. With these five verticals combined, we have a sub species, which is that diverse founders and diverse employee bases and diverse cap tables is not charity. It's simply good for business. And so in addition to being hyper specific about the impact in which we invest, we also make it a priority and a mandate at our firm to invest in the way the world truly looks. And when we say that on our website, we linked a census data and so we invest in men and

women equally. We invest in diverse founders almost all of the time, and um we track this with data and precision to make sure that our investments reflect not just one zip code in California, but rather America at large. And you have described this as non obvious founders. Tell us a little bit about that phrase. Well, not obvious is a turn you hear a lot when you go

out to Silicon Valley and uh, I don't know. I think it was coined by a well known early Kapal employee turned billionaire turned investor who actually have a conference centered around non obvious idea And I love the phrase. Um I love thinking about you know, investment PC that our countrary because when you have a contrary point of view, contrarion point of view, you often have outlier results because if you're right, you're taking the risk and you're capturing

the reward. When you're investing in non obvious founders, it should be that exact, exact, same outcome. And so it always sort of befuddled me as a person with hard

to pronounce name in Silicon Valley. Why it was that we're an industry that prides itself on investing in innovation and groundbreaking ideas and the next frontier of X, Y and Z, and yet all of those founders in which we were investing collectively tended to kind of look at the same They were coming from the same schools and the same types of families, and so to me, there was nothing innovative at all about backing that Wharton g SB HBS guy who was second or third generation finance.

And what really excites me about venture is, you know, capturing a moment in time that's young, but also the energy is palpable around not only the idea in which the founder is building, but the categories in which they're tackling. And then that sounds vague. I'll be a little bit more specific, and so at t MV we try to

see things before they're even coming around the bend. For instance, we were early investors in a company called city Blockhealth, which is offering best in class healthcare specifically for low income Americans. So they focus on the most most vulnerable populations which are underserved with healthcare, and they're offering them best in class healthcare access at affordable pricing because it's

predominantly covered through pay A relationships. And this company is so powerful to us for three three reasons because it's not simply offering how health care to the elite. It's democratizing access to care, which I think is absolutely necessary and turnamount for success of any kind. We thought this was profoundly interesting because the population which they serve is also incredibly diverse, and so when you look at that investment over say a comparable company I won't name, means

that offers for profit health care out of pocket. You can see why this is an opportunity that excites us as impact investors, But we don't see the diversity of the team as impact. We actually see that as their unfair advantage because they are accessing the population authentically that others might ignore. Let me see if I understand this correctly.

When you talk about non obvious fine founders and spaces like this, what I'm hearing from you is you're looking at areas where the mare kid has been very inefficient with how it allocates capital. That these areas are just overlooked and ignored. Hey, if you want to go into Silicon value and compete with everybody else and pay up for what looks like the same old startup, maybe it'll be successful, maybe it won't. That's hyper competitive and hyper efficient.

These are areas that are just overlooked and there is This is more than just do good ay for lack of a better word, There are genuine economic opportunities here with lots of potential upside. Absolutely. Um So, my business partner and I, you know, she and I found each other twenty years ago with undergrads at Georgetown, but we went into business after she was successful and being one of the only women in the world to take a shipping business public with her family and and we got

together and we said, we have really unique access. She and I um and the first STV that we collaborated on back in Keen was for a young business at the time started by two women that was focused on medical apparel predominantly for nurses. Now it's nurses and doctors, and they were offering a solution to make medical apparels

of scrubs more comfortable and more fashionable for nurses. I happen to have nurses and doctors in my family, so doing due diligence for this business was relatively simply called my aunt who's nurse practitioner and nurse for life, and she said, uh, absolutely, when you're you know, working in a uniform at the hospital, you want something comfortable with extra pockets that makes you look and feel good. The VCS that they spoke to at the time, and they've

been very public about this in the beginning. Anyway, we're less excited because they correlated this particular business with a fashion company. But if you look back at our original memo which I saved, it says figs now public on the New York Back Exchange, is a utility business. It's a uniform company that can verticalize beyond just medical apparel.

And so we helped value that company at teen million back into two thousand and sixteen, and this year um they went public at a seven billion dollar market cap. And so what is particularly exciting for us, going back to that conversation around non obvious founders, is that particular business, BIGS was the first company in history to have two female co founders public. And when we think of success at t MP, we don't just think about financial success and I are are you know, cash on cash return

for our LPs. Of course we think about that, but we also think who are we cheerleading and with whom do we want to go into business and what's the story on the other side of the sense that we want to tell And uh, you know, we measure non obvious not just based on gender or race, because I think it's a little too precise in some ways. Sometimes for non obvious is around geography. I was I'm calling you from Athens, as you know, and in Greece yesterday

I got together with a fund manager. I'm lucky enough to be An LP and her fund, and she was talking about the average size of a seed round in Silicon Valley these days, hovering around thirty millions. And I'm scratching my head because at our fund TNV, we just

don't see that. You know, we're investing in Baltimore, Maryland, and in Austin, Texas, and the average price for us to invest the seed round is closer to five or six million, and so we actually can capture larger ownership of the pie early on and then developed a very close knit relationship with these founders that might not be as networked in the valley where there's thirty DC funds

to everyone that exists in Austin, Texas. And so yeah, I think I think you're you're right to say that it's about inefficiencies in market, but also just around about you know, being persistent and looking where where others are not that that's quite intriguing. Your team is female lead. You have a portfolio of companies that's about six five women and people of color. Tell us how you go about finding these non obvious startups. That's a good question.

You know. TMV celebrates its five year anniversary this year. So the way we go about finding companies now is a bit different than the way we begin five years ago. Now it's systematic. We collectively is a partnership. There are many of us take over fifty a month with tier one venture capital firms that have known us for a while, like the work that we do. Believe in our value add because the partnerships them prize to former operators, and

so we really roll up our sleeves to help. And when you've invested with these firms enough times, they will write to you and say, I found a company that's a little too early for us for X, y Z reason, but it resonates and you know, I think it might be for you. So we found some of our best deals that day, but other times we found our deal flow through building our own communities. And so when I first started as a as a e M an emerging manager of a VC firm, and roughly of LP capital

goes to e M each year. But that's sort of an outsized percentage because when you think about you know, the lea fixles of addition capital, taking one point three billion of that pie, then you recognize the definition of an emerging manager might need to change a bit um so when I was starting as an e M, I

recognized that the landscape wasn't necessarily leveled. If you weren't what's called the spin out UM, somebody that has spent a few years at a traditional, established blue chip firm, then it's harder to, you know, develop and cultivate relationships with institutional LPs who will give you a shot, even though the data absolutely points to there being a real opportunity at capturing lightning in a bottle if you find the right e M with the right idea in the

right market conditions, which is certainly what we're in right now. And so I decided to start a network specifically tailored around helping women fund managers connect to one another. And it began at the WhatsApp group and a weekly Google meet and has now blown into something that requires a lot of dedicated times. We're hiring an executive director for this group. It's called Transact Global UH two D fifty women X fund managers globally from Hong Kong to Luxembourg

to Venezuela, Canada, um, Nigeria, you name it. There are women fund managers in our group and we have one of the most active deal flow channels in the world. And so two of our TMV deals over the last year a fintech company combatting student debt and helping young Americans day for retirement at the same time, as an example,

came from this WhatsApp deal flow channel. So I think, you know, creating the community, being the change, so to speak, has been incredibly effective for us as a proprietary deal flow mechanism. And then last and not least, I think that, you know, having some sort of media presence really has helped. And so um, you know, I had posted a podcast, and I worked on building up what I think to

be a fairly organic Twitter following over the years. And you know, we we surprise ourselves by getting some really exceptional founders called pitching us on LinkedIn and on Twitter because we make ourselves available as next gen e M. So that's that's a sort of long winded answer to your question, but it's not the traditional means to say the least are you the companies you're investing in? Are they? And and I'll try and keep the simple for people who are not all that world versed in the world

of venture. Is it seed stage, is it the A round, the B round, how far into their growth process do you put money in, So it is a dominantly seed fund. We call our investments core investments. So these are checks that average between and one and one point five million, for about one point to five million on average, we're capturing ten to fiftent of a cap table and in this era that's called a seed ground. It would probably

be called a series A ten years ago. And then we follow on through the Series A and it macs um take our pread at the B. So our goal by a Series B is to have on average ten percent at a cap. And then we give ourselves a little bit of wiggle room with our modeling. We take mars and moonshot investments with smaller checks, so we call these initial interest checks, and initial interest means I'm interested, but your idea is so audacious it won't prove itself

up for three or four years. Or to be very honest, we weren't the first to get into this cap. Or you know you're picking us a court over us, and we understand, but let's see if we can just promise you a bit of value add to edge our way into your business. And oftentimes when you speak as a former founder yourself at a high level of compassion, and you promise with integrity that you're going to work very

hard for that company. They will increase the size of their round and they will carve out space for you. And so we do those types of investments rarely ten times in any given portfolio. But what's interesting in looking back at some of our outliers from fund one, it came from those initial interest checks. So that's our model in a nutshell. We're pretty transparent about it. What we like about this model is that it doesn't make us tigers.

Were off the board by the b but we're still owning enough of the cap table to be a meaningful presence in the founders live and in their business, and it allows us to feel like we're not spraying and praying. Spraying and praying is an amusing term, but I'm kind of intrigued by the fact that we used to call it's smart money, but you're really describing it as value added capital. When a founder takes money from t MV,

they're getting more than just a check. They're getting the involvement from entrepreneurs who have been through the process from startup to capital raised to exit. Tell Us a little bit about how that works its way into the deals you end up doing, who you look at, and what

the sort of deal flow you see is like. Well, years ago I had the pleasure of meeting a world class advertiser and I was at his incredibly fancy office down the wall street to that agency, and he described to me with pride how he basically bartered his marketing services for one percent of the unicorn and he was sort of showing off a bit about how for very little time and effort a few months he walked away

with a relatively large portion of a business. And I thought, yes, that's clever, but for the founder, they gave up too much of their business to right And yeah, I came up with an idea that I floated by Marina back in the day where our original deck for TMV Fund one began with the slide marketing is the future of venture. Adventure is the future of marketing, meaning e f A VC fund were to position itself more like an ad agency, but rather than charging for its services, it's go to

market services. You offered them free of charge, but then you were paid in equity and you could quantify the value that you were offering to these businesses, and back then people laugh at us, even though all around New York City ad agencies we're really doing incredible work and benefiting from the startups in that ecosystem. And so we sort of changed the positioning a bit and now we say to our LPs into our founders, you're both clients of our firm. So we do think of ourselves as

an agency. But on one side of our marketplace you have LPs and what they want is crystal clear. The value that they derived from us is through community and connect ativity and co investment, and that's it. It's it's pretty cut and dry. Call me up once a year when you have an exceptional opportunity, let me invest alongside you. Invite me to dinners four times a year, give me some information and a point of view that I can't get elsewhere. Thank you for your time, and I love that.

It's it's a great relationship to have with incredibly smart people. It's cut and dry. It's so different. What founders want, it's something more like a family. They want a VC on their board, you know that they can turn to during critical moments. Two am on a Saturday is not an uncommon time for me to get a text message from a founder saying what do I do? And so what they wanted more like seven services for a period of time, and they want to know when that relationship

should start and finish. So it's sort of the Montessori approached adventure. We're going to tell them what we're going to tell them, tell them what they're telling them, tell them what they told them. We say to founders with a reverse pitch deck, so we pitch them as they're pitching us. Here's what we promised to deliver for you for the first each and twe four months of your infancy,

and then we promise you will mostly get lost. You can come back to us when your business is growing if you want to do a tender and and we'll operate an SPV through you, or if you simply want advice. We're never going to ignore you. But our specialty are our black belt, if you will, bury is in those first twenty four months of your business that go to market.

And so we've staffed up TNV to include, well, it's punching above our weight, but the co founder of an exceptionally successful consumer marketing business, a growth marketer, a recruiter who helps one of our portfolio companies higher forty of the earliest employees. We have a pr woman you've met the as she's exceptional, who whom I don't know how we would function sometimes because she's constantly writing and re editing Prince releases for the founders with which we work.

And then u Anna our copywriter who came from I A C. And Sean our creative director, used to be the design director for Rolling Stone, and I could go on and on. So some firms called this a platform team, but we call it to go to market team. And then we promised a set number of hours for every company that we invested into that and as a result, UM No, that's just I'm I'm completely fascinated by that. Um But I have to ask, maybe this is an obvious question or maybe it's not. So you you sound

very much like a non traditional venture capital firm. Who are your limited partners, who are your clients and what motivates them to be involved with TMV because it sounds so different than what has been a pretty standard model in the world of venture one that's been you know, tremendously successful for the top tier farms. Our LP set is UM crafted with intention. It's of our investors are institutional. This concludes institutional sized family offices, the family offices, and

the multi billions UM. We work with three major banks fort of five hundred banks. We work with a couple of corporate fortune five hundreds as investors or LPs, and a couple of fund of funds, so that that's really run of the mill for fifty of our investors. And

that's why I'm in Athens today. Our family offices global family offices that I think are reinventing what venture is going to look like in the future because wealth has never been greater globally, there's a trillion dollars of assets that are passing through the hands of one generation to

the next. And what's super interesting to me as a woman is that historically a lot of that asset transfer was from father to son, but actually, for the first time in history, over fifty of those assets inheritors actually women. And so, as my business partner could tell you, because

Sheet herself as the next gen. In prior generations, women were encouraged to go into the philanthropic or nonprofit side of the family business, and the sons were expected to take over the business with a family office, and all of that is just comple weekly turned around in the last ten years. And so my anchor investor is actually a young woman. She's under the age of thirty five. There's a little bit of our firm that's Indie rock because we're not playing by the same rules of the

establishment is played by. But certainly we're posturing ourselves to be able to grow into a blue chip firm, which is why we want to maintain that balance of fifty percent institutional and fifty percent. I would call it the spoke capital. And for the LPs that are the spoke, we work with an Australian family office, and UM Venezuela and family office, and the Chilean family office, and a

Mexican family office, and and and so on. For those family offices, we come to them, We invite them to events in New York City, We give them personalized introductions to our founders, and we get on the phone with them whenever they'd like. We host zooms. We call them the Future of Everything series. They can learn from us and we get to know them as human beings. And I think that there's a reason why UM two thirds of our Fund one LPs converted over into Fund two

because they like that level of access. It's what the modern LPs is really looking for. Let's talk a little bit about some of the areas that you find intriguing. What sectors are really capturing your attention these days. What

are you most excited about. Well, there i am. I'm most excited about five categories for which we've been investing for for quite some time, but they're really being accelerated due to pandemic and um a looming recession, and so we're particularly fascinated by not just health care investing has it been called in the past, but rather the care economy. I'm not a huge fan of the term fem tech.

It always sounds like fembot to me. But care as it pertains to women alone is a multi trillion dollar opportunity. And so when we think of the care economy, we think of healthcare care, elder care, community care, personal care as it pertains to young people, old people, men, women, children. We buy for CAPE and we look for interesting opportunities that don't exist because they've been undercapitalized and undervalued for

so long. Cave in point, we were early investors in kind body, a reproductive healthcare company focused on women who want to preserve their fertility, because if you look at twenty ten cents is data, you can see that the data has been there for some time that women in particular were glaying marriage and childbirth. And there are a lot of world famous economist who will tell you this.

You know, the global population will decline because we're aging and we're not necessarily having as many children as we would have in the past. Plus it's expensive, and so we saw that as investors as a really interesting opportunity and UM jumped on the chance to back China Bartosi, who's incredible when she came to us with a way to make fertility preservation less expensive. So she followed the DTC playbook and she started with a mobile clinic UM

that helped women freeze their eggs etensively. That company has gone on to raise hundreds pretty and that company is now valued in the hundreds of millions UM. And for us, you know, it was as simple as following our intuition as women fund managers. Now we know what our tears are thinking about because we talked to them all the time.

And uh, and I think the fact that you know, we're bringing a new perspective to venture means that we're also bringing a new perspective to what has previously been called STEMPEC. We invest in financial inclusion. Everyone in the world is investing in fintech um the self directed financial mobile apps are always going to be capitalized, especially in a post Robin Hood era. But we're specifically interested in

the democratization of access to financial information. And we're specifically interested in student debt um and alleviating students debt in America because not only is it going to be one of the greatest challenges are our generation will have to overcome, but it's also you know, prohibiting us from being out the American dream. One point seven trillion dollars a student that in America that needs to be alleviated. And then we're interested in the future of work and long have been.

This certainly was very much accelerated during the pandemic, but we've been investing in the ten economy and remote work for quite some time and so really proud to have been the first check into a company called Braveley, which is an HR chatpot that helps employees inside of a company chat anonymously with hr reps outside of that company.

So that's ten ninety fine about issues like the EI and inclusion and upward mobility and culture setting and what to do when you're all of a sudden working from home. So that's an example of a future of work business. And then in the tech enabled sustainable solutions category, it's amountful.

So let's call that sustainability. We are proud who have been early investors in a company called Riddwell out of Seattle, Washington, focused on not just private privatized recycling, but upcycling and reconnaissance. Where are our things going when we recycle them? You know,

for me, always been a pretty big question. And so Ridwell allows you to re and up cycle things that are hard to get rid of that of your home, like children's eyeglasses and paint, battery and you know, single use plastic, and it shows you where those things are going, which I think is super cool and there's good reason why it has one of the highest MPs scores net promoter scores of any company either were worked with people

are craving this kind of modern solution. And last but not least, we invest in transportation in part because of the unfair advantage my partner, Marina brings to t MV. She comes from a maritime family, and so we can pilot transportation technology within her own ecosystem. That's pretty great.

But also because we're just fascinated by the fact of the world commodities move on ship and the biggest contributor to emissions in the world outside of you know, corporate is coming from transportation, and so if we can sort of figure out this industry, we can solve a lot

of the problems that our generation are inheriting. Now, these categories might sound massive, and we do consider ourselves a generalist firm, but we stick stick to five core sectors that we truly believe in, and we give ourselves room to kick out a sector or to add a new one with any given new fund. For the most part, we haven't needed to because these remain the categories that are not only most appealing to us as investors, but

I think paramount to our generation. That's that's really intriguing. Give us an example of a moon shot, or what you called earlier a mars shot, a technology or a company that can really be a game changer but may not pay off for for quite a while. We just backed a company that is focusing on uh food science. Oh gosh, I can't really too much because they haven't they haven't truly launched in the US, but maybe maybe I'll kind of allude to it. They use crushed produce

like crushed potato skins to make plastic but biodegrades. And so it's a Mars shot because it's a materials business and it's a food science business rolled up into both a CpG business and enterprise business. This particular material can wrap itself around industrial plates. Even though it's audacious, it's not really a Mars shot when you think about the way the world is headed. Everybody wants to figure out how do we consume less plastic and recycle plastic better.

And so if there are new materials out there that will not only disintegrate but also in some ways feed if the environment, it would be a no brainer. And then if you add to the equation the fact that it could be maybe not less expensive, but of comparable pricing to be alternative. I can't think of a company in the world that wouldn't switch to this solution. This is plastic that you don't throw away, you just toss in the garden and it becomes exactly exactly it should

help your guard and grow. Um. So yeah, so that that's what I would call them mars shot in some ways, but in other ways, it's just common sense. Right. So, so let's talk a little bit about your investment vehicles, you guys run. I want to make sure I get this right to funds and three vehicles. Is that right?

We have two funds. They're both considered micro funds because they're both under a hundred million, and then we operate in parallel four SPVs UM that are relatively evergreen and they serve as opportunistic investments to continue to double down on our winners. SPVs special purpose investment vehicles. Yes, in in UM the PE world, they're called side cars. That's that's that's really interesting. UM. So how do these get structured? Does everything look very similar? UM? When you have a fund,

how quickly do you deploy the capital? And typically how long are you locked up? For our investors luck up? For well, investors are usually in private equity or we see funds locked up for ten years. That's not unusual. UM. We have shown liquidity faster, certainly for fund one, it's it's well in the black and uh and it's only five years old, less four and a half years old.

So um, you know how do we make money. We charge standard fees two on twenties is you know, the rout brick that we operate by, and then lesser fees for sidecars or direct investments. So that's that's kind of how we stay in business. When you think about an emerging manager starting their first fund, you know, management fees are certainly not so we can live a lavish rock and world life on the ten million dollar fund with a two percent management. See, you're talking about two k

for the entire business to operate. So Marina and I not only you know, anchored our first fund with our own capital, but we didn't pay ourselves for four years. It's not glamorous. I mean there's some friends of mine that think the venture capital life is glam and it is if you're on Sandhill Road, But if you're an e M, it's a lot more like a startup where

you're burning the midnight oil. Um, you are bartering favors with your friends, and you are begging the smartest people you know to take a chance on you and to invite you into their cap table, but it somehow works out because we do put in that extra effort. I think. I think the metrics, certainly for Fund one, have have shown us that you know, we're in this for the long hall now, so you have FUN one and FUN too.

Are there any plans of launching Fund three? Yes? Um, I think that you know, given the proof points between Fund one and Fund two, um, and a conversation that my partner and I recently had, you know, five years out early in this do we love this? We do? Okay,

this is our life's work. So you can see larger and more demonstrable sized funds, but not in an outsized way, not just because we can raise more capital now, but because we want to build out a partnership and the kind of culture that we always dreamed of working for back when we were employees. So we have a very diverse instead of colleagues with whom we couldn't operate. And we'll be adding to the partnership in the next two

or three years, which is really exciting to say. UM. So yes, the T and V will be around for a while. That that's really interesting. I'm going to ask you the question I ask any venture capitalists that I interview. Tell us about your best and worst investments, and what did you pass on that perhaps you wish you didn't. Oh gosh, the film all list is so long and so embarrassing. UM, let me start with with you know

what I passed on that I regret. Well, I don't know if she really would have invited me to invest, but only I had a wonderful conversation with a peer from high school, Katrina Lake, when she was in beta

mode for spitch Fix. I think she was still at HBS at the time or had just recently graduated from Harvard, and Katrina and I had coffee in Minneapolis, where we went to high school, and she was telling me about the Netflix for clothing that she was building, And certainly I regret um not really picking up on the clues that she was offering in that conversation. UM, ditch Fix had an incredible IPO and I'm a proud shareholder today.

And UM. Similarly, when uh, my friends were starting cloud Flare, which luckily they did bring me into pre I PO and I'm grateful for that. But when they were starting cloud Flare, I really should have jumped on that moment or UM when my my buddy Ryan Graves, whom I still chat with pretty frequently, UH was starting out uber in beta with Travis and Garrett as another opportunity that I definitely missed. UM I was in Ireland when this

year is a term sheep assigned. So there's such a long laundry list of name dropped, name dropped, missed, missmissed. But in terms of what I'm proud of UM, I'd say far more. You know, I don't like Sophie's choice. I don't like to cherry pick the certain investments to just brag about them. But we've we've talked about someone the call today, I'd rather kind of shine a light look at my track record. Right there's there's a large

realized I r R that I'm very proud of. But more on the opportunity of the companies that we more recently act Preventive, which is a CRM for oncology patients that helped them navigate through the most strenuous time of their lives and by doing so, get better access to healthcare.

You know, we just wrote that check a couple of months ago, but already it's becoming a company that I couldn't be more excited about because if they execute the way I think surely and Victor will, this has the power to help so many people in you know, profound way, not just in the Silicon Valley cliche way of this could change the world, but this could actually, you know, help people receive better care. UM. So so yeah, so I'm I'm I'm proud of having been an early investor

in you know, the Caspers of the world. Certainly we're all getting better sleep. There's no shame there. But I'm I'm really excited now today and investing in financial inclusion in the care economy and so on. M And let's talk a little bit about impactful companies. Is there any different when you're making a seed stage investment in a potentially impactful company versus traditional startup investing. Well, pre seed and seed investing UM isn't a science, and it's certainly

not a science that anyone has perfected. There are people who are incredibly good at it because they have a combination of luck and access. But if you're a discipline investor in any such class. And I talked to my friends who were in hedge funds and work for hedge funds about you know, the ten bets that they take a day, and I think that's a lot trickier than what I do. Because our due diligence process, on average, picks an entire quarter of a year. We're not making

that many investments each year. So even though it sounds sort of fruity when you look at a white combinator your demo day, why Com is, you know, the biggest accelerator in Silicon Valley, and they produce over three D companies three or four times a year. When you look at the outsized valuations coming out of why Com, it's easy to think that starting company is as simplest sort of downloading a company in a box Excel and and

and running with it. But from where we sit, you know, we're scorching the earth for really compelling ideas in areas that have yet to converge. And we're looking for businesses that may have never pitched a VC before. Maybe they're not even seeking capital. Maybe it's it's a company that you know, isn't so interested in raising a penny of venture because they don't need to. They're profitable from day one. Those are the companies that we find most exciting because

as former operators. We know how to appeal to them, and then we also know how to work with them. M hm, that's really interesting. Before I get to my favorite question, let me just throw you a curveball. Tell me a little bit about business school. The podcast you hosted for quite a while, So Synchrony thanks Um came to me a few years ago with a very compelling and exciting opportunity to host a podcast with them that

allowed me a fortunate opportunity to travel the country. I went to just under a dozen cities to meet with founders who have persevered past their startup pace. And what I loved about the concept of business school is that the seasons that I hosted were really focused on founders who didn't have access to BC capital. They put money on credit cards or took out SBA loans or you know as friends and family to give them starter capital, and then they made their business work through trying times.

And when you passed a five year marks for any business, I you know, I'm passing it right now for t n B, there's a moment of reflection where you can say, wow, I did it. You know it's it's incredibly difficult to be a startup founder. More than fifty of companies fail

and probably for good reason. And so um, Yes, I hosted Business School seasons two and three and potentially there will be more seasons um and I'm very proud of the fact that, you know, at one point we we cracked the top twenty business podcasts, and people seem to be really entertained um through these conversations with you know, insightful founders who were vulnerable with me about you know,

what it was like to build their business. And I'd like to think they were vulnerable because I have, you know, a good amount of compassion for the experience of being a founder, and also because I'm a New Yorker and I just like to talk. You're also a founder, so there's gonna be some you know, empathy that's genuine. You'r you went through what they're going through exactly exactly, and so um. You know, what you do, Barry is quite similar.

You're you host an exceptionally successful business podcast and you're also an allocator. You know that it's it's interesting to do both because you have I think that being an investor is a lot like being a journalist. You know, in both professions, you won't succeed unless you are confidently curious and if you are having conversations to listen more than you speak. Well, I'll let you in on a

little secret. Since it's so late in the podcast and fewer people will be hearing this, the people I invite on the show are essentially just conversations I want to have. If other people come along and listen, that's fantastic, But honestly, it's for an audience of one, namely me. The reason I wanted to have you on is because I'm intrigued

by the world of venture and alternatives and impact. I think it's safe to say that a lot of people have been somewhat disappointed in the result of E s G investing and impact investing that for it's captured a lot more mind share than it has captured capital, although

we're seeing signs that's starting to shift. But then the real question becomes, all right, so I'm investing less in oil companies and more in other companies that just happened to consume fossil fuels, what's the genuine impact of of my E s G investing? It feels like it's sort of diminimus, whereas what you do really feels like it has a major impact for people who are interested in

having their capital make a positive difference. Thank you for saying that, and I will return the compliment by saying that I've really enjoyed getting to know you on our Wonky Economists zooms um and I think that you're right. I think that E s G investing, certainly in the public markets, has had diminished returns historically because the definition has been still bizarre and so all over the place.

And I've read incredible books from people like company Book Levine, who helps coin the term Rockefeller Foundation originally can coin the term you know, you read about lower case higher are and iris plus measurement, and it's so hard to have just a standardization of what it means to be an impact investor, and so it can be the bother. But we don't bother. Rather, we kind of come up with our own subjective point of view of the world,

and we say, what is impact mean to us? Certainly it means not investing in sin stocks, um, But then those sin stocks have to begin somewhere. It has to begin with an idea that somebody had once upon a time. And so rather we are investing in the way the world should look from our perspective. UM. And with that in mind, it doesn't have to be impact like your grandpa's dc UM. It can be impact for a modern generation but simply thinks and behaves differently their votes with

their dollars. UM. You know, people often say, oh, well, my E S G portfolios under performing, But then if you dig into the specifics, are you investing in Tesla? It's a pretty good year. Did you back beyond Meat

had a great year. And so when you kind of redesign the public market not by a sleeve in um, you know, a bank's version of a portfolio, but rather by companies that you think are making demonstrable change in the world, then you can walk away realizing, oh, had I only invested in these companies that are purpose driven, I would have had outside returns. And that's what we're trying to deliver on at TMV. That's that's the promise,

really really very very intriguing. I know I only have you for a few minutes, so let's jump to my favorite questions that I asked all of our guests, starting with tell us what you're streaming these days? Give us your favorite Netflix, Amazon Prime or any podcasts that are keeping you entertained during the pandemic. While my family has been binging on on ft Wave on HBO Max, which is the story of Big Waves surfer Barrett McNamara, who

is constantly surfing the world's largest waves. And I'm fascinated by people who have a mission that's sort of bigger than success or fame. Um. But they're driven by something and part of that something is curiosity, and part of

it is insanity. And so not only is it visually stunning to kind of watch these big Waves surfers in Portugal, but it's also a mind trip, you know, what motivates them to get out of bed every day and potentially risk their lives doing something so dangerous and and so nannas but also at the same time so brave and heroic. So highly recommend um. I am um listening to too

many podcasts. I listened to I don't know, a stream of things from I'm a Big You know carriswsher fan as reclient fan, so they're both part of the New York Times these days, Um, and of course your podcast, Mary Well, well, thank you so much. Let's talk a little bit about who your early mentors were and who helped shape your career. It's gonna sound ungrateful, but I don't think in like a post lene and definition of

the word, I've ever truly had a mentor or a sponsor. Now, having said that, I've had people who have really looked out for me and been incredibly gracious with their time and capital, and so I would absolutely like to acknowledge that first and foremost. You know, I think about how generous Adam Grant has been with his time and his investments for TMV and Fund one and Front two, and he's the best selling author and worked in his highest

rated business professor. Um So, shout out to Adam if he's listening, or back Comstock, the former vice chair of che who has been instrumental in my career for about a decade and a half now. Um and she's also, um you know, really leaning into the t m V portfolio and has become a patient of Parsley Health and early investment of ours and and also an official advisor to the business. Um So, people like Adam and besth

certainly come to mind. But I don't know. I just I'm not sure mentors really exist outside of corporate America anymore. And part of the reason why we started Transact Global is to kind of foster the concept of the peer mentor people who are going through the same thing as you at the same time, and allowing that high mentality with an abundance mentality to catalyze people to kind of go further and faster. Let's talk about some of your

favorite books and what you might be reading right now. Okay, so in the biz book UM World, the as I know your your listeners are creating UM. I'm a big fan of negotiation Genius. I took a crash course with one of the authors, Max Bagamin, at the Kennedy School, and it was illuminating. I mean, he's one of the most captivating professors I've ever had the pleasure of hearing lecture. And this book has really helped me understand the concept of the ZOPA, the zone of possible agreement and how

to really negotiate though UM. And then for Adam, whom I just referenced UM, of all of his incredible books, my favorite is given Take because I try to operate UM with that approach in business. You know, give more than you take and maybe in the short term you'll feel depleted, but in the long term, you know, karma pays off. But mostly very I read fiction. UM. I think the most interesting people in the world, or at least the most entertaining at dinner parties, are all avid

readers of fiction and history. So I recently reread, for instance, all of my favorite short stories from college, from those Dioskis in Gentile Creature to Drown by one Odeas um Passing by Millah Larson, the Diamond, as Big as the Risk that This Gerald. Those are some of my very favorite stories of all time. And my retirement dream is to write a book of short stories. M really really quite intriguing. Are they all available in a single collection?

Or these just going back to your favorites and and just plowing through them for fun? Those are just going back to my favorites. UM. I try to reread Passing every few years. It just somehow seems to be more and more relevant if I get older. Uh and uh. One ideas has become so incredibly famous. Um. The first read Drown about twenty years ago. But it's his original question of short stories that you know, brought in my perspective of why it's important to think about a broader

definition of America, I guess. And yeah, now that's just that that was just sort of off the top of my head. Is a toil ring us few stories that I really love. That's a that's a good collection. Um, And we're down to our final two questions. What sort of advice would you give to a recent college grad who was interested in a career in either venture capital or entrepreneurship. Venture capital or entrepreneurship. Uh well, I would say, learned as early as possible how to trust your gut.

So this could mean a myriad of things as an entrepreneur, could mean under the halo effect of an institution university or high school, or maybe having a comfortable day job, tinker with ideas, get feedback on that idea, don't be afraid of looking or sounding dumb, um, and build that peer network that I described people who are rooting you on um and are also insatiably curious about wonky things. And I would say that for venture capital, similar play

on the same theme. But you know, whether it's putting small amounts of money into new concept block chain investing, or whether it's meeting with entrepreneurs and saying maybe I only have three thousand dollars saved up that I believe in you enough to bet a month's rent in Brooklyn on your concept if you'll have me as an investor. So play with your own money, because what it's really chief teaching you in return is how to follow instincts and to base Petter recognition off of your own judgment.

And if you do that early on, over time these all become data points that you can point to, and there are lessons that you can glean while not taking the risk of portfolio management. So I guess the real advice to your listeners is you know, more action, please, really very very intriguing. And our final question, what do you know about the world of venture investing today that you wish you knew fifteen or twenty years ago When

you were first getting started. Twenty years ago, I was a bit of a Pollyanna and I thought every wonderful idea that simply is built by smart people and has times the market correctly will work out. And I will say that I'm slightly more jaded today because of the capital structure that is systematically allowing the biggest firms in the world to kind of eat up the generous portion of what's called the lp PI, which leaves less capital

available through the young, upstart VC firms. And of course I'm biased because I run one that are taking outside risk on those non obvious ideas that we referenced. And so what I wish for the future is that institutional

capital kind of reprioritizes what it's looking for. And in addition to having a bottom line of reliable and you know, demonstrable return on any given investment, there are new standards put into place saying we want to make sure that a portion of our portfolio goes to diverse managers because in turn, we recognize that they are three times more likely to invest in diverse founders. Or we believe an impact investing can be broader than the s G e

s G definition of a decade ago. So we're coming up with our own way to measure what sustainability or what impact means to us. And if they go through those exercises, which I know is hard because certainly I'm not trying to add work to anyone's plate, I do think that the results will more than make up for it. Quite intriguing. Thank you so Ria for being so generous with your time we have been speaking with Soriah door Abi, who is the co founder and general partner at t

MV Investment. If you enjoy this conversation, we'll be sure and check out any of the prior three and seventy six conversations we've had before. You can find those at iTunes or Spotify or wherever you buy your favorite podcasts. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. You can sign up for my daily reads at Hults dot com. Check out my weekly column at Bloomberg dot com slash Opinion.

Follow me on Twitter at rid Halts. I would be remiss if I did not thank the crack team that helps me put these conversations together each week. Tim Harrow is my audio engineer, Paris Wold is my producer. Atika val Bron is our project manager. Michael Batnick is my head of research. I'm Barry Rihults. You've been listening to Masters in Business on Bloomberg Radio.