How Venture Analysts and Women Play Key Roles in the VC Ecosystem
Insights from Anna Khan on Harry Stebbing’s ‘The 20 Minute VC’
A recommendation heard frequently is that founders seeking funding should only talk with partners at a Venture Capital (VC) firm – you know, the ones who make the big decisions. Anna Khan is a General Partner at CRV but she will convince you otherwise. She makes a strong point about why the role of a venture analyst is so crucial.
Anna herself grew up in Pakistan, moved to the US and studied at Stanford University. She has worked in financial corporations, startups, and at various levels of the VC ‘food chain’. Those startup experiences gave her a first-hand feeling for the highs and lows of startup life and offer her perspective of both sides of the table: founder and investor.
In addition to her role at @CRV, Anna is also the CEO and founder of LaunchX, which offers female entrepreneurs an immersive opportunity to learn how to raise capital for their businesses. As such, she has a lot of actionable wisdom. She defines VC as if the “finance and the startup ecosystem had a baby…” She also has firm views on why more women in VC matters.
Harry Stebbings of The 20 Minute VC recently interviewed her where she talked about her intent to have real impact and her sincere hope that we will reach a place of more women in VC. This will mean more female CEOs and founders pitching their ideas, companies, and products.
Anna has inspirational knowledge that translates into useful advice, which I’ve summarized below. You’ll find ways to tighten the link between founders and VC and methods to help more women advance within VC.
Let’s start with some useful general reminders:
- The act of sourcing founders is at the heart of venture capital; don’t forget it and no, it’s not beneath you.
- First impressions matter, and so do your words. Founders remember how and what you communicate so be mindful of what you say.
- A founder’s response to the first contact by a venture analyst says tons.
Anna believes venture analysts have a key role in VC as a conduit between founders and investment firms.
Here are 8 pieces of advice for venture analysts (& everyone else):
- Don’t waste time going to countless events but rather spend time getting to know a small group of people in your industry with whom you connect and can have an open conversation. In her case, she connected with other female VCs and they could discuss sourcing funnels and internal fund dynamics, among other topics.
- Hang out with product and engineering leaders. It’ll be time well spent because they are actually using the software products themselves; in her case software is central.
- Blog about topics both as a way to get your voice out, but also because if you write about areas you want to invest in (in her case, finance as a service and open-source), you generate a great source of potential founders.
- When looking for founder-market-fit, and product-fit for modern times and circumstances look for other early signs in startups, not just Annual Recurring Revenue (ARR) and net dollar retention.
- Spend more time with entrepreneurs. Established partners are busy since they are committed to the portfolio or funded entrepreneurs already. Younger partners or analysts may have more time for new entrepreneurs and they can convincingly say to founders: “my success is aligned with yours.”
- Always show up with more information for founders, ie. deep sector experience. Offer to do something for founders when conversing via email. If you are truly helpful, it says a lot about your firm, too.
- Understand that real-early stage investment means that you have to make the right call early on, a call that aligns with founders’ interests, and this forms a deep bond. It’s hard to forget the first person who took a bet on you when no one else would.
- Get to know founders personally, rather than just their traction. “Great founders can make new markets.”
The ‘pipeline problem’ ? 💣
In response to the suggestion of a ‘pipeline problem’ in regards to female numbers in VC, Anna Khan is whip-smart with these recommendations:
- Address the issue from every angle, top to bottom. VC firms who want to bring change can start a program or work with LaunchX that targets high-achieving female entrepreneurs and educates them about access to VC. Specifically, help define for them what it takes to raise a great round, and distinguish between seed-stage and multistage firms.
- Pull up female analysts to partner ranks by not only promoting women just for past success but equally for their potential. Take a chance on them too. They will potentially bring more women from their networks as well.
- When you have a female GP on your team, you are signaling that you are sharing the ‘carry’ with them and also that you trust they will make good investment decisions. Both of these factors are significant progress in the VC space.
Go to Sleep & Role Models
In closing, Anna swears by getting 8 hours of sleep and referenced two of her role models who hail from the media: Oprah Winfrey and Christiane Amanpour. She says both of those women know how to ask the right questions and get to the truth and a deeper understanding of people. This ability to emphasize and connect with people serves Anna well in building relationships — so crucial to successful investment decisions.