How Venture Capital Really Works (No Filter) | The Check Writers Room + More

Added: 2026-05-28

[00:00:03]What's up? It's way up Angela He and I am excited for this wealth Wednesday for all of the entrepreneurs out there. For everybody who is maybe thinking they need a check written for their company and want to get [laughter] some funding, I'm here with my girl Stacy Tisdale.

[00:00:17]Happy wealth Wednesdays everybody. And there are some powerful women in this room. You can feel it in the air because we have the host of the Check Writers Room podcast. We have Shelanda Armstrong, Sydney Thomas, and Yasmin Finine.

[00:00:34]We'll get back to that in just a [laughter] second.

[00:00:36]>> Sorry about that. No, wait, that was totally funny. Um, so these ladies are female founders and their general partners and their own fund. And we talk about venture capital sometimes on this show, but if you know how difficult that is, it is just unbelievable to be in the same room with you all. So tell us about that and how you came together for the check writers room. And I'm I'm just looking at everyone. So I'll start with Shelanda.

[00:01:02]>> So this is actually Sydney bringing us all together. We've all crossed paths in the industry at different times. But Sydney decided that you know you know how do we actually bring women of color that's in this industry? There's less than what a hundred of us. And then when you talk about >> you can fit us all one group text. Yes.

[00:01:24]>> When it comes to venture, there's less than 100 of us um in venture. And then when you talk about check writers, right, principal or general partners, there's less than 50 of us. And then when you talk about those that actually own their own firms, it's less than 30.

[00:01:39]So there's not that many of us. And so Sydney was the brainchild of this of like how do we come together? How do we support each other? Because venture is hard and we need community just like everyone else. So she's actually the brainchild of all of this.

[00:01:51]>> Yeah. Sydney, how did this happen?

[00:01:52]because it's also hard to get all of you on a schedule, [laughter] >> you know, to actually be able to record this.

[00:01:59]>> Yeah. Okay. So, thank you and you and you and you [laughter] because, you know, it was really I'm going to say it was actually us together when we um actually launched this thing. So, backing up a little bit, I've been in venture now for a decade. When I first got into venture in 2016, the numbers were even worse, if you can believe that. and five.

[00:02:21]>> I mean, [laughter] >> well, actually, so I actually built out a list of the black women in VC. That was one of the first things I did when I got into VC because everyone when I met them, I'd be walking around in San Francisco and folks would be like, "Oh, you must be the only one, huh?" And I just be like, "No, there's at least five, but I think there might be 10."

[00:02:42]And there might maybe there's 30. And so I built out a list of all of us both from analysts, operations assistants, all the way to GPS and started hosting these really low-key women in VC just happy hours.

[00:02:57]>> Mhm.

[00:02:57]>> And saw how much that meant to me and the other women because so much of this game is resilience because we don't know if we're good for another 10 years. when we're investing into these startups, we won't see a return in that company for a decade. And so if you're not here to play the game in 5 years, you already lost, >> right?

[00:03:19]>> So I was like, I need to get my crew because I know that together I can stay.

[00:03:26]But alone, it's just going to be too much. So you're thought of as the other the other because people you are black women in this field but also when you talk about venture capitalists the people writing the check they're always oh those people the other people. What are the biggest miscon misconceptions people have about how those decisions are made.

[00:03:47]>> I think one is that most businesses should strive to achieve venture capital when it's really not a prize. It means that you can scale and it means that you can scale quickly. Even though we said 10 years, you need to exponentially move your revenue in that in that first inning >> and the stages that you go through in venture capital. We start I start at the very beginning in my firm at preede and I know you both also do seed which is the next step and you really have to get like I would say 10 million in revenue from from [clears throat] zero to 10 million in revenue and you've got to do that really quickly these days and so people think oh I should you know we I should be um going after venture capital for the tool and the capital they use But really, maybe they should be bootstrapping cuz the business is only going to get to maybe $10 million ever.

[00:04:51]And that's actually great.

[00:04:52]>> That's great.

[00:04:54]>> There's nothing wrong with that.

[00:04:55]>> I want to ask you guys this, all of you, because um listening to the podcast, and so for some people, this is all brand new to them, right? We talk about preede, seed, series A, bridge funding, and all of that. And you guys break it all down in a way for people to understand like what it means when you go in for these requests. even if like you said and maybe it's not going to last. How do you know when to say, "Okay, it's time to call it. It's not going to happen." But can you just for people listening because I was listening to the podcast >> with uh while I was getting my makeup done one day and she was like, I don't know what any of this means. And so for people VC for dummies, right? And that could be me too. Just kind of breaking down what the different rounds are because you guys do a great job, but I also know you know more than we do. I'll let Yas start because she does preede and we all have a different definition of what preede is, especially today in today's market. So, I'll let her start.

[00:05:53]>> Honestly, you have to have a billion-dollar market, right? And that's part of what we want to see as kind of the the bar even from the beginning. And even more importantly, I think we need to know that you have a non-obvious insight because one of the things that I think gets this going is you have a perspective. And we meet so many founders and they all have this problem slide and they go on and on and on about the problem, but at preede your plan's going to change. And so what I care about is that you have an insight. You have a real reason to start this company. And so once I know that it's called founder problem fit that you are the person on the planet that can solve this problem we can go from there and >> give us an example of what that would be.

[00:06:41]>> So I would say if you >> or like a company that you've worked with that fit that description.

[00:06:47]>> I so I will just take a generic one which is um it's hard to save right. So if you come to me and you haven't started a company, you're the founder and you spent a lot of time on, it's so hard to say, but I need to know that you have an insight that is not obvious about how what is the what's one example of what you know about why saving is hard for a specific demographic. Okay?

[00:07:16]And then you can you can say, "Oh, actually um you know I I gained insight working at AMX, right? And I have and this is kind of a product I already built at AMX, but we were missing a spec a specific kind of approach to it."

[00:07:33]Okay, then I'm intrigued because if you just come to me and you say, "Oh, saving is hard." You know, I just talked to five other people. Or if you say, "Oh, in healthare it's hard to get reimbursement for insurance." We see a lot of those decks these days. Everyone wants to help be able to get ROI on insurance. But I need to know why you have an insight because I just looked at 50 decks in the last month that all say the same thing.

[00:08:00]So that's just I would say the starting point. I got to get you to get to m maybe three million in rev minimum. And depending on your business models, the the engagement and the usage needs to be solid. Like there needs to be evidence of traction. That's what I'm looking for. And then I pass you on to Sydney and Shelanda.

[00:08:19]>> Okay.

[00:08:19]>> What are some things you think that early stage entrepreneurs should stop doing immediately? I actually want you to touch on two things. When you said you have to have a billion-dollar industry, I know a lot of people I'm out. But they're usually healthc care or beauty. There are a lot of billion-dollar industries. A lot of entrepreneurs I don't think even realize that they're operating in a space where are applicable. Coffee. [laughter] >> I want to tell you about a brand called [laughter] that has a fabulous online business which you can buy at Target.

[00:08:51]>> Billion dollar industry.

[00:08:52]>> It is a billion dollar industry. A lot of people when they heard that they zoned out but they shouldn't.

[00:08:57]>> Yeah. So one thing too, we were talking about this earlier on the market sizing.

[00:09:04]It's easy to say for example, I see this with healthcare. It's a $4 trillion market opportunity. Everyone says that.

[00:09:10]But do you know how much was spent on IT decisions is it that's that 4 trillion is servicing and labor that's not on digital transformation.

[00:09:22]And in AI for example, like they're adopting, you know, and spending more money on tech than they have for a really long time. Like this is an era where where digital transformation is a big investment. So that market is growing.

[00:09:37]But I wouldn't if you quoted me the four trillion, I would tune out because it is a big market. But I need to know exactly what is your serviceable sliver of that market.

[00:09:50]>> Wow. All right. And we also talk about emotion when it comes to as a founder, you have something that you're very tied to emotionally. How do you detach yourself or what do you tell founders about detaching yourself from something you've been working on so long, so hard, invested so much into uh to just taking yourself outside and looking at it from a bird's eye view?

[00:10:12]>> I think it's a great question. Um because it is incredibly emotional usually when you're launching a company.

[00:10:19]I mean, the founders who are listening know this. You're first pitching it to your friends, then maybe your family.

[00:10:25]You might have put your life savings into this thing. Whether or not this thing grows or dies is incredibly meaningful to your own net worth. So, I don't want to ignore the emotion that is a part of it and think that it is important. At the same time, when we're coming into play, we're generally looking for, to Yas's point, your ability to scale incredibly quickly under an immense amount of pressure. And so, if you're coming and pitching to me and you're crying, you're cut. [laughter] And so, okay, our own little We have our own wealth Wednesdays. Wealth [laughter] Wednesdays tank. YOU'RE RIGHT. Wealth Wednesdays tank. Okay. Number one, don't cry. I think the other part of this is [laughter] you have to come to terms that you are signing up for the most traumatic experience of your life. You are volunteering to be traumatized every single day because you are building a company and you have no idea what's going to be thrown at you. So you have to be growing as a person faster than your company. And if we're talking venture scale, that is accelerating like your own personal growth. So, you got to get rid of everything and all your bad habits because if you don't deal with them, they find their way into your company and you can't deny that.

[00:11:42]>> We were talking about founders depression.

[00:11:44]>> Yes.

[00:11:44]>> Because it's mental health awareness month, a special type of depression entrepreneurs get. They are like three times more depressed than the overall population and all these different things. I loved in one of your episodes you said, "Don't be a founder if you're looking to confirm that you're terrible."

[00:12:01]>> Yeah.

[00:12:01]>> What did you mean by that?

[00:12:03]>> Yes. Okay. So that was referencing an article that a founder who I backed wrote and she was essentially writing a letter to herself if she was to launch a company again today. And one of the things she shared was if you are looking for a role to confirm your >> flaws frankly exactly >> don't sign up for founder this founder role. If you're looking for an opportunity to every day grow and look for actually self an opportunity for self-actualization founder life is the life for you. And I love that because I think that as a founder it is incredibly hard. I mean, I see you as a founder. I feel like all of us know it. It's like you are in the trenches every day. But if you're actually learning and growing with all of those different touch points, >> it's amazing. I think I wouldn't trade this for anything. I love >> an extension of yourself. And and one thing you also talked about was communicating because if you're getting this funding and this money and then you said we don't hear from you for a few months until you need some more money >> because the money ran out um then that's an issue. And so can you talk about the importance because I think people got to stress this too. We may be trying to run our business on a day-to-day let's say you've gotten some preede funding but now we haven't heard from you and then you call up because this happens all the time. We need more money, right? All right. So, can you talk about that and what is the proper etiquette?

[00:13:37]>> So, I'm gonna kick it off and I'll let you ladies chime in.

[00:13:40]>> Founders absolutely need to update their investors monthly at minimum. We need to know what's going on in the business, how we can be helpful. A lot of founders feel like they get the check and then they want to go heads down and then they pop out. Uh sometimes I get quarterly updates, sometimes our founders are given yearly updates. That's not going to cut it because we are not able to help you. We have networks. We have folks you that we can connect you to, but we have to know what you need, right? And I think sometimes founders feel like the updates are status reports and so they only want to give you the good news. And we're not here for the good news. We need to know what are the problems so we can help solve those.

[00:14:18]>> They're used to isolating. We were talking a lot about that and working in isolation.

[00:14:22]>> That part I think they tunnel. They're like, "Okay, I got this money. I need to hustle, do all the things that I told them I was going to do and I'm going to run so hard at this goal and I'll let them know when I'm done. And actually, the reason why we invested in you is because we want to be a part of the journey, right?

[00:14:39]>> But you need to let us in which requires a certain level of vulnerability which requires a certain level emotional secure like emotional maturity which I think that is important when we're diligencing companies.

[00:14:50]>> Not to mention we are audited. Yes. And we need [laughter] we we so we all manage other people's money. This is not our capital. So we need to provide reports to our LPs what's happening in the portfolio. So if I have to chase you part of it is yes I might be able to introduce you to new customers but another part of it is don't make me look crazy out here not being able to provide information.

[00:15:19]>> Now what do you say to people right now?

[00:15:20]This was another great and people you have got to turn into tune in to this um podcast because you'll learn so much um but AI right and there was a whole conversation on the latest episode about AI and how that is affecting business and is this something that's going to take over how does this affect founders when this AI um can go ahead and do the same thing that your company was saying it could do but they developed it in a week when it took you years to get it done.

[00:15:51]>> And you guys were talking about AI breaks.

[00:15:53]>> Yes.

[00:15:54]>> And and also knowing that you can be able to do the things that AI [laughter] does if Claude isn't around or Clawudette as you call.

[00:16:01]>> We call that. Uh yeah. And so AI is it's here. It's here to stay and we have to navigate through it. Um, I think for founders who are trying to build what we would consider SAS companies or you're going after a certain niche, you have to really test, can you build this fast enough then anthropic can release another clawed version, right? Because we've seen with was it Opus 4.7?

[00:16:24]>> Uh, it took out a thousand startups overnight of just its capability. So, this technology is is accelerating faster than we've ever seen anything and it's taking out companies overnight. So you really have to know really what your mode is and it can't just be one thing anymore which traditionally it has been.

[00:16:42]>> Building on what Shelanda just said that AI is not optional at this point we're all using it. When AI kind of came on the scene like I don't know call it three or four years ago before it was more mainstream there was a lot of talk about AI being an equalizer because it helps with productivity. It helps. It actually lowers the cost to start a company, right?

[00:17:04]>> But what is sort of discouraging and I want to see how it plays out is that I'm not really seeing it be an equalizer.

[00:17:12]The people who have stronger networks are the people who are building AI companies who have access to talent from the same schools that we all say all the time. And it's a tool and I want to see that AI can actually be an equalizer. I have hope cuz I'm a tech optimist but at at this point I haven't seen that. And so that's something I think we need to pay attention to.

[00:17:39]>> Okay, this is a I think this is actually might be a hot take because I think that yes, true.

[00:17:44]>> We love a hot take.

[00:17:45]>> Love [laughter] right here.

[00:17:47]>> That's a segment in the podcast by the way. You guys got to listen to this.

[00:17:50]It's great >> cuz what I think Yas is talking about is AI native companies. So AI native companies means that the full stack you're building a a net new large language model which will require a lot of computing costs and tons of engineers like you just it's expensive. There's a reason why OpenAI is paying their engineers like a million dollars a year.

[00:18:13]At the same time, I think there's actually a lot of opportunity for AI enabled companies to launch in this space, which is essentially a company that is leveraging AI technology to scale and grow. So, I hear you and I think there's like a some nuance to it.

[00:18:29]>> I think the takeaway though is you cannot put your head in the sand when it comes to AI. It's here >> and you have to figure it's not optional. it's coming to every doorstep and you have to figure out how to get comfortable with it, how to use it, and how to leverage it um in the right way for you.

[00:18:45]>> Now, I also know and we've had conversations about this and that sometimes when we look at as black women, black women founders um and say a business doesn't work, we know that it happens all the time in the white world, white men, they could fail, get back up, do it again, get funding immediately.

[00:19:03]Um, do you think, and have you seen this, when it comes to black female founders, there's a lot more put on all of us when one thing doesn't work?

[00:19:11]>> Absolutely. Um, there's just not that many of us, right? And so, we don't get that many shots at goal. Um, I think the there's just a higher expectation. And then also, as the company continues to scale, there's just more eyes put on the company of can you actually hit your revenue targets? Um, can you continue to get the right strategic partnerships?

[00:19:30]And then we have seen recently when some of these founders have exits how sometimes our community has a knee-jerk reaction to the exit of why did you sell the company? Well, when you take venture dollars, the goal is to provide a return to your investors. It is not to have the company forever. So, it's actually required that you are going to have to exit at some point. I know that a lot of folks feel like especially when we have a brand that we're really tied to that we want to hold on to that as long as we can.

[00:19:59]>> Black owned. Yeah, we agree with this company where their audience responsibility is real >> and and I I absolutely understand that.

[00:20:08]At the same time, we also need to make sure that that company can sustain itself long term and sometimes you do need to sell to a larger conglomerate so that you can actually be able to keep that um brand in the marketplace because it is expensive to continue to scale. I don't think people realize how hard it is to grow continuously 20 to 30% year after year after you get to growth scale.

[00:20:33]>> I I think you have a good example of an exit that is a is a model, right? I do think Angela there's asymmetry when we don't fail forward in the same way. But there's also another component.

[00:20:46]>> We want people and employees to be able to get liquidity. So we always focused on the founder. Did the founder sell?

[00:20:55]But many of them [snorts] have given their employees. That's the way that they paid them early on.

[00:21:00]>> Equity.

[00:21:00]>> Equity. And so they they own I can't cash out my equity. What is it?

[00:21:04]>> So exactly. So we should stop just seeing it just as the founder sold out.

[00:21:09]They're providing liquidity to their employees. And there's another wealth Wednesday tip which is sometimes people need to diversify. And if all your wealth for your family is tied up in one asset, uh, you know, we talk about other people that we compare against, that's not how they run their portfolio. They got real estate, they got hedge funds, they got, you know, >> we talk about that all the time.

[00:21:31]Diversification.

[00:21:32]>> So, in order to diversify, folks need to be able to sell, too.

[00:21:36]>> You got tough sisters in the house. I love this. I love this. [laughter] This has to weigh heavy on you guys because in the black community, it's just different. you do have that cultural layer of someone needing to be the business icon and like you were saying blackowned and we've seen some very popular female founders fall from grace recently. What are the lessons learned from that and put just put you guys on the hot seat a little bit as investors?

[00:22:04]Do you need to step out of that traditional model a little bit when you know the respons the impact that these founders have on the community?

[00:22:12]>> Oh, that's interesting. Okay, before we go to the >> That was heated in a lot. I'm sorry.

[00:22:17]>> No, it was good. It was good. Not >> heated. I'm not heated.

[00:22:19]>> I love a hot take. We have We love hot.

[00:22:21][laughter] >> I love your I was actually just going to take it away from too much of the focus on the female founders, black female founders who have failed and talk more about black female founders who have succeeded because I think you hosted one of them recently, the founder of Honeypot.

[00:22:39]>> Obsessed with her, obsessed with her product. girl. Yes.

[00:22:44]>> Oh my god. And I don't think we talk enough about her, >> right? You know, it's interesting because I remember when she got a lot of flack. Um, and that's when communication was key and she actually reached out to me like I want to come on the show to explain this and then she also has a book out that's really amazing right now and I do enjoy her so much. Um, and she's so transparent. Her story is fascinating and amazing and even the reason why she created Honeypot, which is why these founders are so important, right? because we know with our bodies and different things that we need um for ourselves cuz she needed it. But um I remember when she did get some flack when people like she sold the company, she changed this and this changed and x y and z. That was really hard for her mentally to have to deal with that, you know. And so I do think like you said, we have to she has a successful company, you know, Myel Organics, Myel also as well. Um, I think she did a great job with her company and and successfully showing us how how things can happen for a black women female founder because she had a really tough time >> uh you know initially and I think also knowing when to get funding because she talks about that too because people also think I have this great product, great idea, it's doing really good like I'm selling you know on Instagram and I'm in stores now I need to get some funding.

[00:23:58]How do people know when it is? I I know we talk about hitting numbers and things like that, but it's other than just that, like the the deck that you need to put together. That's another thing I think that's really important because that's what people see first, right? And sometimes that's really hard for people.

[00:24:13]It literally can take them like so long to figure that out. But now we have AI that can >> call Claude. [laughter] >> Yes.

[00:24:20]>> Clawette. Clawette. Clet.

[00:24:22]>> So [clears throat] I think I think the deck is definitely that that starting point, right? Telling the story. You really need to just tell the story to the investor of what are you building?

[00:24:31]Why are you uniquely positioned to continue to build this? And how are you going to show up in this market differently that you are going to capture so much of the market share that is just unbelievable. So like uh some of the examples that I think about is when you think about the last financial crisis that we had. We had two companies that came out of that that fundamentally changed the way that we operate and it went against how we were raised and that was we don't get in cars with strangers and we don't sleep at strangers homes and now we have Uber and Airbnb. Right?

[00:25:02]So like that's and their decks when they started off they were trying to tell this story and a lot of investors thought they were crazy because they were like what is this? This goes against everything that we know, but they were able to find the right investors who understood the story that they were trying to tell and that's why they were able to to eventually go and continue to >> That's a non-obvious insight.

[00:25:21]>> Yeah. Okay.

[00:25:22]>> That they knew the customer and they had tried it that they knew people would sleep in their homes >> and they knew that in certain markets there's not enough taxis, right?

[00:25:31]>> And you do need another form of transportation.

[00:25:34]>> Remember Brooklyn 10 years ago you couldn't get a taxi. Well, you have to call a place >> and [laughter] then they'll be like hanging up on you and you be like, "Oh my god, I can't get a cat. I got to go now. I'm so late." And you calling, they leaving you a hole, hanging up. And now it's just like, forget those businesses are done now.

[00:25:52]>> I felt like, I need to go pay someone at the dispatch to hook me up. [laughter] >> What do you think about the equalizing of being able to sell online? Like Tik Tok Shop. I mean, there are companies that literally are like, I don't have to be in stores. We just go live, do our Tik Tok shop, and you know, it's like a QVC. I love it.

[00:26:09]>> I love it. I think it works. I think and this is kind of some of the things that we talk about um in our in our calls, but >> there is a space for CPG and that is consumer product goods to get venture funding.

[00:26:22]>> It's not for all consumer goods though.

[00:26:25]And I think that's the problem is that founders sometimes see one brand get funding and they think that that's the route that they need to take and it just doesn't fit every consumer product business.

[00:26:36]>> What fits you guys? is because as we hear this conversation, you're telling us, you know, the deck and the starting points and everything, a lot of people say it's just difficult to get in your room in general. It's hard. This feels so out of reach for so many people because it's it's hard to get a meeting, >> right?

[00:26:52]>> It's hard to get a phone call returned.

[00:26:54]>> I [laughter] know, >> for goodness sake. So, what's the real story on that?

[00:26:57]>> Yeah, it's a great point. Um, I'd say the first point, the first place I'd start is it's because not a lot of companies should raise venture capital.

[00:27:09]To Yas's earlier point, I think the majority of companies actually should be looking for debt financing, maybe it's a loan from your local bank, maybe it is a grant. It's really just maybe like less than 1% of companies who should be targeting venture capital. And the reason is because we are terrible bosses. Horrible. I don't know if I would want to be once we're once we start investing in your company, we are kind of your boss, which means that we are asking you to grow 3x month over month. It means we're expecting you to work incredibly horrible hours. We're expecting you to travel AC, do whatever it takes to build this company from idea, from that first product to a $500 million revenue rate within 10 years. I have an I have an analogy for folks. Okay, this is what venture capitalists are. We're essentially scouts for the pros. So if you have a business >> that you think can go NBA NFL analogous then you should be in the venture capital kind of trajectory otherwise you can you have to bootstrap or you should just you should over time your customers can be your best investors too. If the business isn't going to scale with speed then your customers are your best investors. Don't go after venture capital because like I've said, we are looking and we're scouting like we see thousands of decks and we know when we find and we can only write a few checks a year.

[00:28:53]>> So that means when we see something that looks like it's for the you know like the combine like you're running that 40 yard dash like is setting you apart from everyone else then we can write the check. Otherwise, your customers are your best investors. And in three years, unfortunately, maybe you can get a loan.

[00:29:14]There's revenue based financing. There are other tools outside of there are grants that are more appropriate. But I I want to answer your question on how to find if you think your business is going to scale fast, >> then we have a program in my firm called VHNYC. We have another one in Boston because not everyone has the networks >> that they can manufacture privilege to get in front of us. So at my firm we have not just kind of like referrals which is majority of venture capital you know our firms included comes from referrals and back channeling. So for my firm what we do is we have programs. So there's one in New York um the NYC EDC that can put you in front of venture capitalists and we spend a few weeks with you. So there's a way that we can meet founders who aren't already a part of our network. That's really really great to hear. So someone a lot of people think they have the next NFL NBA scale kind of company. [laughter] >> What's the reality of that? I mean how or how can people self-evaluate before they go down this path?

[00:30:22]>> I would say first step is understanding that the moment you take a check from a VC we are married for 10 plus years. I know a lot of people who have VC money and they're like, "Don't do it. You lose control of your company."

[00:30:37]>> Possibly. Right now, we do have [laughter] If you don't know what you're doing, it's a possibility, right? If we have to do what's best for our capital because we have to return that capital back to our investors.

[00:30:50]>> You're responsible for other people's >> fiduciary duty. Yeah. It It's like And guys, we are held >> stress [laughter] >> and we are held to SEC guidelines, right? So if we see that you are not operating the company in the best way but it's still a a strong company.

[00:31:06]Absolutely. Sometimes the founder is removed. It doesn't mean that the VCs are bad or we're trying to take your company. We're trying to do what's right for the actual company.

[00:31:14]>> Oh my god. You have to know from your own company.

[00:31:16]>> You have to know that there's that risk too when you take that VC money.

[00:31:20]>> That usually happens later though at series B not. Exactly. And I do think you know when you're a founder too like though >> the role changes with every additional round that you take. And so to your question also earlier on about like what's the difference from preede seed series A series B preede is really I'm just trying to get from zero to.5. I'm just trying to prove that there is a market that exists. I'm trying to get a few customers. I'm trying to prove velocity that I can get customers quickly and that they will return and continue to buy from me. at seed you've proved some of that out. So you're raising at that point maybe it's $2 to $4 million to say like okay I have I have a few customers I can get more and we invest in you to run that play. Once you've proven that play and you get to product market fit then you're raising series A. At that point you're raising somewhere between six to $15 million.

[00:32:17]You have a company.

[00:32:18]>> You are a manager. That is a very different role than what you signed up for from preede to seed.

[00:32:25]Some people don't want to be a manager.

[00:32:27]Some people actually don't want to do that job anymore. They really good at it.

[00:32:32]>> Okay.

[00:32:33]>> I [laughter] think that's the other part that we're not honest about. There is a difference to be >> there are founders and there are CEOs.

[00:32:41]Those are two different roles. And as your company continues to grow, a founder may not be great at being a CEO.

[00:32:49]And so there may need to be a change.

[00:32:50]>> Stay in your zone of genius. You have to know where your strengths are. And that's why I always say you have to be growing faster than your company. A lot of founders say, "Well, someone's going to take the company away from you."

[00:33:01]Well, if someone takes a company away from you, it's because you stopped growing the company.

[00:33:05]>> And it happened in a board meeting, right? And that's how it happens. And I think what gets you to one point won't get you to another point. And the beginning of startup life is chaos, right? I thrive under chaos. But I personally am not great at managing people because that's about processes and that's the difference. Sometimes people are removed because they thrived under the chaos but they can't create processes.

[00:33:29]>> We were just talking about that everything you're describing entrepreneurs we just have to unwire this. They really try to do everything.

[00:33:36]>> Yeah. Right. Exactly.

[00:33:38]>> Exactly what you're talking about. And that's that growth process is a it's a like everything. It's a letting go.

[00:33:44]>> Yes. We recommend there's actually an article written by someone at First Round Capital called giving away your Legos and that's how we describe entrepreneurship inventor. You are consistently giving away your beautifully crafted Legos that you just spent hours literally [laughter] build it, you give it away. You build something else, you give it away. That's >> you guys tell some harsh truths on this podcast that people need to hear.

[00:34:07]>> Al one of those is that a majority of these businesses will fail. Now, percentage-wise, what's a majority like >> if you had to put a number on it?

[00:34:18]>> Well, it depends at the stage that you're investing in. Yas is Yas is the risk. He's the risk.

[00:34:26]It's the majority. It's probably going to be, I don't know, maybe two to three companies out of even a hundred that actually do well. But here's the other thing that I want people to distinguish a nuance.

[00:34:39]If you build a solid business, then I might be able to help you be sold.

[00:34:46]>> And that's an exit, too. But we're not talking about not in many cases. Very few companies kind of around my stage that are sold are close to a billion dollar outcome. We usually get our money back at that point or maybe, you know, 3x the money that we invested um would be a great outcome at selling pre- series B essentially. So, we help you sell to a competitor. So, you may not go all the way to the billion dollar, >> that's still a success, but you can still have a success. [laughter] And I think also, and what I love, and this was not something I had thought about that you guys bring up, is that sometimes a founder can be amazing, but the business just didn't do what it could have done. and you may be able to figure something else, you know, or if they have something else they want to bring to you, we still want to work with you. Yes.

[00:35:37]>> Because we really saw what you did last time, maybe market, whatever happened, it didn't work, but you work.

[00:35:45]>> We've seen that happen a few times. Um, there was just a company that raised a series B, blackowned company in the grocery space. I think it's called Vory.

[00:35:54]Cherry Rock did it. Did you guys see this one?

[00:35:56]>> I know that.

[00:35:57]>> Shout out to Cherry Rock. Shout out to Terry Rock, another black womanowned VC firm. And um the founder I met a decade ago when he was building some completely different called Grio at Stanford >> and [clears throat] it failed. And now he built this other amazing company just raised what was it? It was like $15 million in a series B. And so I think we are also just from a generational standpoint, I actually think we are at a place where we're able to see more of us getting the opportunity to fail and actually come back again and build something else, which and I think I attribute it to the fact that there's more of us in these seats. So we can see what's really behind the failure, learn >> from that founder and um you know still trust that they can take a risk somewhere else and grow something really incredible.

[00:36:50]>> There's a lot of things people can do to enhance their business success and enhance their probabilities. You're making me remember some very very proud wealth Wednesdays moments. And when you know when we're socially aligned with brands, >> we share them with our audience. And we were um working with a credit builder and then there was a very natural conversation about um women particularly women entrepreneurs, you know, needing, you know, credit support. And while we were in this interview, this company became the 30th most downloaded app in the app store.

[00:37:30]>> Oh wow. Wow. and completely uh change the trae trajectory of the company and we've had you know those moments and when you look when you're evaluating a company when someone's trying to evaluate themselves those I mean those things it's the extra things that they can bring to the table how how do they build those relationships how much do those relationships mean to their conversations with you >> oh that's a good question you >> well I was going to like can you capitalize on the relationships? Right?

[00:38:03]So, >> one of the things they ran into, they came back year a couple years later because they weren't ready for that moment.

[00:38:08]>> Yeah. So, that that's the thing that we're looking at is like I can put you in front of all types of people, but can you capitalize on it? Right? Do you know what to do next with it? So, that's one of the things that we're really evaluating is are you mature enough to know what to do once you get in the room or are you going to freeze because you're just not ready for the moment?

[00:38:24]>> We literally just talked about this on our most previous podcast. We scrapped that part.

[00:38:29]>> Yeah. [laughter] But I think it's a really good part.

[00:38:33]It's a really good point because essentially you're saying like before we invest in the company low key we are putting you through a series of tests.

[00:38:41]Just you know FYI all the founders. One of those tests is when I introduce you to someone else. What do you do?

[00:38:48]>> Do you follow up really quickly? Do you make an appointment with that person? Do you take do you request and get all of the feedback, all of the juice from that orange that it can actually then make you better or do you just fumble the the ball? Sorry, I'm not in sports so I like try I'm trying to come up with all of the language.

[00:39:09]>> I think that works. Okay, thank you.

[00:39:10]>> Don't [laughter] don't fumble the bag.

[00:39:15]>> But that's definitely a space you guys have talked about too. Sports.

[00:39:18]>> I mean, yes. Everyone knows on the podcast I'm the sports head. Um, and so there's a podcast where I talked about women's sports as I am a huge fans of women's sports and I know that there's a lot of venture dollars now going into the space. Um, which I think is exciting. It also just doesn't fit the return profile for venture which I think on an upcoming episode someone has a hot take around >> it needs to be >> someone [laughter] >> has fragmented of of kind of how quickly you need to return that capital back.

[00:39:50]But women's sports is great but we also need to be mindful we have a 10year fund life that we have to return our capital back to our investors. And I think a lot of folks don't realize we have to return all of the money back to our investors before we see a dime. You got a job literally.

[00:40:07]>> We if we don't return that money back, it's not just that we lost our investors money. We didn't get paid now for 10 plus years.

[00:40:14]>> Yeah. So, we have to make sure that we're investing in things that we can actually return the capital back from and not just something that's cool in the moment. So, >> all right. Well, I appreciate this conversation. I know you guys are busy and catching flights. Did y'all pay attention to Emma and like her press run?

[00:40:30]>> Yeah, there's a there's an episode coming out about that. We have a so I think with this right there's a lot there's a there's a lot to say here [laughter] but one of the things that we talk about from our seat in tech is that with Twitter gone a lot of the audience that I think she was looking for was fragmented and we're all forgetting that she ran a PR agency >> a lot of people were talking about her and her uh in-person audience activation those city tours they were all sold out >> and So she did a phenomenal job of capturing attention in the attention economy. I think there's a lot of context. One of it is that a lot of black women are unemployed, right? And so >> forced founders, >> right? And so if a lot of women are unemployed and one way to re-enter the workforce is to work from home, I think she hit a nerve. I think it was more about the timing. I wonder if she said this when a lot of black women are not unemployed like we would have this visceral reaction from her. Um, so I think it's some of the timing. I think we've all said there's a lot to learn on kind of the PR component of it like from that. But you know I'm a mom and I definitely I don't think I get three hours away [laughter] from my kids on the weekend. I don't get to see them.

[00:41:53]>> Yeah. Right. And a lot of people don't have that luxury.

[00:41:55]>> Right. So, I think there's some context >> and a lot of people don't want that.

[00:42:01][laughter] >> I think the other thing, and this is on an upcoming episode, but I'll just start with the hot take with uh I think we all miss that she just ran the Kardashian marketing play all over again and just showed us that you don't need AI to do marketing anymore.

[00:42:17]>> Like, you can still run the same Kardashian marketing playbook and it worked, right? So, you know, I think there's a lot to learn from that as well. I think everyone got distracted with what she was saying. I was more looking at her just breath of station or type of like touch points that she had.

[00:42:36]I mean, she did everything from Joe.

[00:42:37]>> Say something shocking.

[00:42:39]>> Yeah. Yeah. And she did everything from Joe Button to Oprah, >> right?

[00:42:42]>> Like that's reach.

[00:42:44]>> Okay. All right. Well, good. Well, we appreciate this. Um, make sure you guys tune in. And you actually have uh people that are going to be guests on the podcast, too, that we can have a chance to hear from. And you even talk about like would you write the check? Yep.

[00:42:57]>> Which I love that because that gives people like a real life view of what goes on and why and the thought process, but this is helpful.

[00:43:05][laughter] >> No, I love it. I've been tell Shelanda, I'm so glad you're doing a podcast.

[00:43:11]>> Oh, here we go. [laughter] >> No, but I do. I think it's really valuable information. And people are like, "Are you talking about finances with your friends? Are you talking about investing with your friends?" And yes, we are.

[00:43:22]>> Yes, it's important. It's 2026. We We have to get comfortable talking about money. It's required now.

[00:43:28]>> Yeah.

[00:43:28]>> So, >> check writers room. You guys always talk about wanting to be in the room where it happens. Applaud these three women for giving you the opportunity. And I'm not letting you leave until you promise you'll come back.

[00:43:38]>> Absolutely.

[00:43:39]>> Absolutely. Love that.

[00:43:41]>> Indeed. A happy wealth Wednesday.