20 VC 080: How VCs Can Differentiate Themselves with Patricia Nakache, General Partner @ Trinity Ventures

Patricia Nakache is General Partner at Trinity Ventures where she focuses on funding companies launching innovative online consumer and business services. Her portfolio of past investments is just astonishing with the likes of LoopNet and Care.com IPOing, PayScale being acquired by Warburg Pincus, Uptake being acquired by Groupon and many more. To be entered into the competition to win a signed copy of Brad Feld's legendary Venture Deals, all you have to do is click here and upvote this episode on ProductHunt and you will be automatically entered into the competition. In Today's Episode You Will Learn: 1.) How did Patricia get into the technology industry and then later make her transition into the world of Venture Capital? 2.) A recent study has shown that the total number of female partners has fallen from 10% to 6% in the time that you have been at Trinity. Why is there this gender misrepresentation and what can be done to improve female equality in the VC industry? 3.) Sheila has invested in some incredible female entrepreneurs such as Sheila Marcelo at Care.com, Illana Stern at Weddington Way and Anna Zornosa at Ruby Ribbon? What excited Patricia about these entrepreneurs and what can female entrepreneurs do to increase their chances of funding? 4.) With the increasing amount of capital available, VCs face greater competition between firms, what can VCs bring to the table to beat the competition? 5.) What elements of the on demand economy face danger in the coming years in a similar way to Homejoy? 5.) Which sector is Patricia most excited about and why? 6.) Why has there been a resurgence in the marketplace model particularly in ecommerce? What are the drivers of this change? Items Mentioned In Today's Show: Patricia's Fave Book: Good To Great by Jim Collins Patricia's Fave Blog: Strictly VC, Owler Patricia's Most Recent Investment: Mayvenn As always you can follow Harry, The Twenty Minute VC and Patricia on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session you can follow Harry on Instagram here!

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  This is the 20 Minute VC with your host, Harry Stebbings. And on today's show, I'm so glad to welcome a guest I've been desperate to have on the show for a while now. So it's a great pleasure to welcome Patricia Nakache. Patricia is General Partner at Trinity Venture Partners, where she focuses on funding companies launching innovative online consumer and business services. Her portfolio of past investments is simply astonishing with the likes of LoopNet and Care.com IPO-ing, and then you've got PayScale being acquired by Warburg Pincus, Uptake being acquired by Croupon, and many, many more. And in today's amazing interview with Patricia, we discuss the ever increasing competition between VC firms to fund the hot startups of the day, the rise of female entrepreneurship,

• 0:44Harry Stebbings?

  and the gender imbalance in the higher circles of VC today. Now, would you like the chance to win Brad Feld's amazing book, Venture Deals? If so, all you have to do is head on over to Product Hunt's podcast section and upvote the episode today. If you love the show, that is. Once you do that, you will be automatically submitted into the competition to win a signed copy of Brad's legendary Venture Deals. Also, check out Product Hunt's new podcast section. I have to say, it is my new go-to place for finding the latest and greatest podcast episodes. Really is fantastic. And speaking of finding new podcasts to listen to, if you haven't had a chance to check out Angel Insights, which is our sister show, where we interview the world's greatest angel

• 1:26Harry Stebbings?

  investors to discover their tips, tactics, and strategies, then do find it on iTunes under Angel Insights. But enough from me, so without further ado, it's time to welcome Patricia Nakache, General Partner at Trinity Ventures.

• 1:47Speaker 01

  You have now arrived at your destination.

• 1:50Harry Stebbings?

  Patricia, I'm absolutely delighted to welcome you to the 20 Minute VC. Thank you so much for joining us today.

• 1:56Speaker 02

  Thank you for having me. I'm excited to be here.

• 1:58Harry Stebbings?

  Now, I'm really curious about how you got into the technology industry and then later made your transition into the world of venture capital.

• 2:06Speaker 02

  Yeah, so I, you know, I grew up around the technology industry. My father was one of the first employees at Computer Sciences Corporation, which is a big systems integrator, and...

• 2:18Speaker 02

  You know, was was a startup in its time. Um, and then when I went to college, I was a physics and chemistry major and I I um, you know, spent my summers mostly working in labs, but um, but for example, the summer after my sophomore year, I worked at a telecom startup and you know, had sort of a microcosm of the startup experience where midsummer, uh, the CEO got fired, um, a new guy was brought in, they had to cut costs and I got laid off. All of the course of like, all of the course of sixteen weeks, I experienced all the upheaval you can possibly experience at a startup in like, whatever. But yet I was not deterred. I I still thought startups seemed interesting. Um, after, after I graduated from college, I went to McKinsey

• 3:01Speaker 02

  um, in San Francisco in Silicon Valley and I served um, a bunch of technology clients. And then in nineteen ninety-nine, I left McKinsey and I joined a startup briefly. Um, but at the same time, I was actually writing freelance for Fortune magazine. It was the height of the dot com bubble and and Fortune was really interested in kind of getting a lot of content about what was happening in Silicon Valley. And I had always been interested in in writing. It's actually one of my, my, my, my loves. One of the things I enjoy doing is writing. And so I was writing about management best practices in Silicon Valley and as part of that, I I was interviewing venture capitalists.

• 3:40Speaker 02

  And um, and a friend of mine introduced me to the partners here at Trinity and I interviewed them for a couple of articles. And and they kept mentioning how busy they were. I mean, literally, they were, you know, this was nineteen ninety-nine. They, this was still in the day where people would send in, you know, paper, paper business plans, not, not just email. And they would point to these piles of business plans on their, on their desk. Anyway, I, I um, they kept telling me how busy they were and at one point I said, hey, you know, I can come help you guys out if you're so busy. And uh, and they just kind of looked at each other and they thought about it and and uh, they're like, hmm, that's an interesting idea. So I actually joined Trinity Ventures as a contractor. Believe it or not. So I started as a contractor.

• 4:25Harry Stebbings?

  Best stories I've ever had.

• 4:27Speaker 02

  And then, and then three months later, I converted to a full-time, you know, principal was my title and uh, the rest is history. But anyway, it was very serendipitous, as you could see. But but I, you know, a lot in my background that sort of pointed me towards, you know, working in, you know, in the technology industry, obviously. Um, but uh, but I think that often hap- you know. Oftentimes in careers, right, it's it's um it's kind of you have to just be opportunistic and you know when doors open just walk through them um you can't necessarily plan everything.

• 4:59Harry Stebbings?

  And what made you decide that that was the right route for you at the time, you know, you're a contractor in those three months, I think you said, what made you go, I want this permanently?

• 5:09Speaker 02

  You know, what I really loved about venture capital was uh was getting to meet such phenomenal entrepreneurs and getting exposed to all these really interesting ideas. It's I mean, there is there is no shortage of things to kind of keep you keep your brain active and engaged in venture capital and that's what I that's what I really loved about it and kind of coupled with that, uh you know, I I felt like the fit with the culture here at Trinity was excellent and I and in small partnerships, that's really important, you have to you there's there it's not a big company, there's no place to go hide if you don't get along with somebody, there's no there's no there's no kind of other division you can transfer to or other group you can transfer to, you have to make

• 5:51Speaker 02

  sure you really fit in with the culture and and in the three months, I I I, you know, I felt very much um very much at home here, felt like it was a place I could really thrive.

• 6:01Harry Stebbings?

  And it must be said that you're part of a rare breed, um a recent study has shown that the total number of female partners has fallen from ten percent to six percent in the time that you've been at Trinity.

• 6:12Speaker 02

  Yeah.

• 6:13Harry Stebbings?

  So why do you think there is this gender imbalance and what do you think we can do to improve uh female equality in the VC industry?

• 6:22Speaker 02

  Yeah, it's I mean, it's been a disturbing trend, I I would I uh why I believe there is this misrepresentation, I I I point to something I call the two Ps, um the first P is is pipeline and um you know, when you look at where uh partners and venture capital are come from, um they generally come from two sources, they're either uh nurtured through an apprenticeship model, um that you know, they're hired early in their career and they're nurtured through an apprenticeship model um to the point where they can become a partner, um or they're hired directly from industry at a at a more senior level, um and and I'm

• 7:05Speaker 02

  an example of the former, I'm sort of a, you know, was was brought on in a more junior role and sort of nurtured over the years and and and trained, if you will, in in in the investment industry.

• 7:17Speaker 02

  So, so the pipeline issue, I don't think applies to the apprenticeship side because there are plenty, I think, of very bright, uh, young women who are, um, who are working in the tech industry, who are getting their MBAs, um, who, you know, might even be getting, you know, degree, you know, technical degrees. Um, the, I think the issue is more in the, the latter model, which is when people, when, when partners are hired directly from industry into a senior, um, role in a venture firm. And, and there has been, and it's, you know, it's been publicized more lately, I think it's good there's been a spotlight on it,

• 7:59Speaker 02

  is that there's a, there's a relative dearth of women executives in, in the tech industry. Um, and so I think that's led to, um, this pipeline issue. And then the second is, because, because I will, I will tell you that in, in the venture business, that second route to joining a venture firm has become more popular in recent years. Yeah. Um, that you come out of, out of, um, either a bellwether technology company or a successful startup. Um, the, the second P, um, is, is what I call pattern recognition. And that's just the notice, a no- notion, and it applies to, to investment decisions too, but it's the notion that decisions are made, um, based on, um, uh, recognizing

• 8:41Speaker 02

  attributes, um, that have worked for you in the past or have been successful for you in the past. And so, in the, in the context of deciding who to bring on as your next partner in a venture firm, uh, pattern recognition would consist of, well, you know, when we hired Joe, you know, Joe had, um, this degree in computer science, he had founded this successful startup, um, and we need more people like Joe. And if I can't find, and, so I'm looking for people like Joe, and if, if fewer women have Joe's profile, um, uh, you know, you're, you're just less likely to, to hire a woman. And so, I, I think that's why, I think that's why there's a, a dearth right now and why it's declined.

• 9:23Speaker 02

  I think there was a, when I joined, um, it was, uh, higher, I believe, because we were in the middle of the dot com boom. And, um, and in growth times, that's when opportunity exists, actually, I think, for minorities to make progress. Um, I think in retrenchment, times of retrenchment is when it's kind of, um, last in, first out. They, you know, they, they tend to suffer in those retrenchments and I think that's what happened after, after the dot com bust. But in terms of what can be done to improve the situation, you know, obviously, I think focusing on this apprenticeship model can be helpful because I think that there are plenty of good candidates coming in that direction.

• 10:04Speaker 02

  I think a lot of the technology companies are, have launched initiatives like Intel, Intel's initiative, where they're, where they're committing to try, you know, to, to increase the number of women in their ranks. And there've been a number of micro VC funds that have been started by women GPs. And, you know, like Teresa Gao and Jennifer Vonset started Aspect Ventures, Ali Lee started Cowboy Ventures. I mean, there's actually a, you know, a handful of them. And that's increasing women's representation in the industry. So, so I think that there's a, there's a number of trends that can be helpful that

• 10:46Speaker 02

  I think if we, we encouraged, could, could reverse, could reverse that, that disturbing trend of the decline that you mentioned.

• 10:55Harry Stebbings?

  And one way to reverse the decline is obviously to invest also in female entrepreneurs. And you've done that with several female entrepreneurs over the last few years and some amazing entrepreneurs in Sheila Marcelo at Care.com, Illana Stern at Weddington, and Anna Zornosa at Ruby Ribbon. So what makes you excited about these entrepreneurs? I mean, what, what, what do you look for in these entrepreneurs?

• 11:17Speaker 02

  So, you know, in each case with, with each of those women entrepreneurs, I, I resonated deeply with the problem they were solving. And, you know, it could be that one of the reasons I resonated with the problem they're solving is because, because I am a woman. I mean, for, you know, I'll just give you the example of Care.com. Um, it's a marketplace for care services. Um, so if you're looking for um childcare for your children, um they have a um they have vetted profiles of caregivers um with whom you can communicate and um and potentially hire. Um, and and you know, having, I have three children myself and and you know, I've been

• 11:59Speaker 02

  a a long time employer of of um of caregivers and um and you know, one of the thing, one of the pain points I experienced was this massive gap that exists between Craigslist, which is free, um but is, but you need to do quite a bit of work um in order to vet the people that approach you on Craigslist. Um, and at the other end of the spectrum, nanny agencies that are very expensive and frankly have an agency issue, you know, there's, there's, they're not uh in a uh an impartial party to a transaction happening. Um, and so, uh you know, it felt to me like there was a, a big opportunity for a service

• 12:41Speaker 02

  that provided more vetting than a Craigslist, but was way less expensive than an agency. Um, so anyway, that was the gap that, that Sheila was filling at she her care dot com. So, so, long story short, I think in each of the cases of these women entrepreneurs, I resonate with the problem they're solving and they really inspired confidence um in their um ability to, to tackle uh the problem at hand. Um, you know, I, I, I've, uh, you know, for example, in the case of Anna Zornosa at Ruby Ribbon, uh before I invested in her company, you know, she and I did due diligence on the concept of Ruby Ribbon together for about a three month period and I saw the learning curve she went on and, and sort of my, my thought bubble at the time was, wow, if she

• 13:25Speaker 02

  continues on this same trajectory of learning, uh, you know, th- this company's gonna do great because, you know, that's what entrepreneurs need to do. They need to be able to iterate and learn and, and pivot and adapt um as they bring their product to market and understand their um product market fit. So, a- anyway, i- in, in, I'd say it's a combination of just resonating with the problem they're solving and being inspired by their ability to solve those problems, both because of domain expertise or their ability to learn, um, or their, and their ability to lead.

• 13:56Harry Stebbings?

  And since you started the investing game, have you noticed any common red flags that keep coming up that always concern you?

• 14:03Speaker 02

  Ah, sure. I mean, there are, um, let's see, um. Ah, you know, oftentimes, um, you know, a, a, a. Ah, really high burn rate can be a bit, you know, can be a yellow flag if it's. If it is out of proportion with um, the stage of the company. Uh, meaning, um, you know, if it, if the company has not yet reached a stage where there's product market fit. Um, and yet the burn rate has been ramped up. To me, that's a yellow flag. And it's interesting, you know, it's what I'm thinking about a lot today in the context of the current environment because. Um, there has been quite a bit of capital available to early-stage companies.

• 14:48Speaker 02

  And so companies have raised probably more money than they might, than they would have in the past at a similar stage. And therefore ramped up their burn rates. And, and I think the wiser entrepreneurs, um, who realise that. Uh, you know, if you, if you put the pedal to the metal from a burn perspective before a company. Has achieved product market fit, um, you know, it, it's, uh. It's very possible that you're, you know, you're not using that capital wisely, um.

• 15:19Harry Stebbings?

  And how, how did the founder determine then how much money to raise?

• 15:24Speaker 02

  Well, um, I think the, the best approach is to think about it in terms of what kinds of milestones they wanna try and reach. Um, and sort of, you know, and, and, and sort of back it up from there. Um, because the, the, if you raise, if you raise, you know, say, say you, you're, you know, you've just launched your product and you have, you know. Four or five months of data and it all looks positive, but it's all limited. Um, and you raise a lot of money, the expectations for growth. Are go- from the, from your investors are gonna be quite high. Um, and so that is going to. Um, encourage you to spend more, to chase that growth, even if.

• 16:06Speaker 02

  That growth uh might not be, say those customers aren't retaining um or if there's some issues with the product. And so you don't, it doesn't give you, i- if you raise too much, it doesn't give you um as much leeway to slow down. I mean, uh oftentimes, you know, board members are very rational and if if presented with the data. They might be disappointed that you can't put the pedal to the metal, given how much they've invested. But they're probably not gonna want you to waste it. So I'm not saying it's a lost cause, but it's something that, you know, entrepreneurs can get in denial about.

• 16:40Harry Stebbings?

  When would you say is the right time to put the pedal to the metal, as you said? Uh is it when you've achieved that mass product market fit? Or is it when you're really trying to get your early customers? Or when would you say it's time to spend the money?

• 16:54Speaker 02

  I I think it's when you have achieved product market fit with the mar- market defined fairly broadly. And and I'll give you an example that I, you know, I'm um I'm an investor in a company called Eat Club. Which is um which provides um meal services to companies. And so um you know, you could have a hundred person company. Uh every employee can individually go on the app and pick from their s- menu selection every single day. Pick what they want and uh but and they provide a lot of variety in terms of choice. And then all those meals are delivered at one time to the company.

• 17:34Speaker 02

  And uh and you know, when when I invested, uh you know, it was clear that that they had achieved product market fit in the Bay Area. Uh actually, more specifically on the peninsula in the Bay Area. Yeah, yeah, so so I, you know, so so I was excited to say, hey, let's turn a card here. And let's let's see if this is a broader market. And you know, lo and behold, um you know, they're, you know, they're going gangbusters in San Francisco. Uh they're they're starting to grow very nicely in Los Angeles. And so I think we're starting to prove that it's not just a, you know, Silicon Valley phenomenon, that it can work more broadly um in other markets.

• 18:16Speaker 02

  Um and so now I feel like, I feel very comfortable putting the pedal to the metal with Eat Club.

• 18:22Speaker 02

  But but you know, it it, you know, three years ago, when I first invested, I wasn't at that place. Does that make sense?

• 18:28Harry Stebbings?

  Yeah, no, absolutely, it does. And and then with the increasing amount of capital that we mentioned earlier, VCs face stiff competition between firms. So what can VCs bring to the table to beat off other competition for the hot startups like care.com and Ruby Ribbon?

• 18:47Speaker 02

  You know, I so domain, so domain expertise is key. Um, you know, having having a sharp point of view um is uh uh on this, on the, on the space in particular, I think is important. I the days of sort of the generalist venture capitalist uh is is, I think, mostly gone. Um, it exists in some rare pockets, but you know, I think when I, and that's been a transition that's happened during the time I've been in venture capital. I think, you know, the wasn't too terribly long ago, you know, one to two decades ago, where you you venture capitalists invest in a in a broad range of industries um or spaces. Now, people are fairly

• 19:31Speaker 02

  um, you know, uh have have become more focused. And I think it's because, one of the reasons is because there's greater competition and you really need to bring that experience base to the table for entrepreneurs in order to be differentiated and and to compete. Um, at the end of the day, I'd tell you, Harry, I think it I think the most important factor continues to be for entrepreneurs trust and mutual respect with their investor. And um and that trust and mutual respect um is often established over time. And so we really try to build relationships with entrepreneurs well before they're going to be raising money, um so that they get to know us and and how we can help them.

• 20:13Speaker 02

  And um and we really encourage them to check our CEO references because um CEO to CEO, you know, that's when they can ask all the questions that they might be too polite to ask you directly. And they can really find out, hey, you know, when when there's bad news, how does this board member react? Um, and, uh, you know, when the going gets tough, you know, how does how does this firm, uh, you know, stand behind its portfolio companies? Um, I I would tell you, um, today, you know, one of the biggest pain points entrepreneurs face is on the hiring front. And so, um, you know, I think, uh, you you'll see you see a quite a few venture firms trying to differentiate and be helpful on the hiring front.

• 20:57Speaker 02

  I know that we've done a lot in that regard, too, to try and be helpful to our portfolio companies. Um, so so so, you know, I think I think it really comes down to domain expertise, trust, mutual respect. Um, and then some of these targeted needs, and and I think hiring is probably top of the list for most entrepreneurs these days.

• 21:17Harry Stebbings?

  Absolutely, which is why a lot of VC firms have director of talent now, is that it?

• 21:23Speaker 02

  Some have directors of talent, um, you know, in in our case, um, one of the things that we're doing is, um, we're sort of, we're we've created a, um, uh, a a newsletter that goes out to our CEOs on a regular basis with vetted resumes that we've all come across, um, so that we're sort of have a kind of a constant feed of candidates um, out to out to our portfolio companies, um, where we can make connections as appropriate if they see people on the list. Because in the past, you know, we would focus most of our efforts on executive hiring. Um, and and we still do that quite a bit, uh, in fact, we dedicate part of our partner meetings

• 22:04Speaker 02

  um, to discussing, uh, executive level talent that that that we know that that are available and try to see matches that could exist within our portfolio. But what we were finding is that our portfolio companies were also looking for support below executive level. And that's where this this, um, sort of, you know, regular email that we sent out to our portfolio companies has has come in really helpful.

• 22:27Harry Stebbings?

  And if it's okay with you, I'd love to dive into a quick fire round now.

• 22:31Speaker 02

  Sure, yeah.

• 22:32Harry Stebbings?

  So how do you measure your success as a VC?

• 22:35Speaker 02

  So uh that is um pretty simple, um either on two fronts, returns to LPs and on the entrepreneur front, um you know, uh helping them achieve their dreams, helping them build companies that that change people's lives for the better.

• 22:50Harry Stebbings?

  What's your favorite book and why?

• 22:52Speaker 02

  My favorite book, oh, I I love books and so I have I have a lot of favorites. Um, let me see.

• 23:01Harry Stebbings?

  What's your favorite business book?

• 23:04Speaker 02

  Oh, oh, my my favorite, oh, well, that that there is a dad quite a bit. Um, uh, well, you know, I've always been a fan of Jim Collins from from the from my days in Stanford Business School. And so, yeah, so good to great, I would have to, I'd have to put that on the list.

• 23:23Harry Stebbings?

  And then what do you think is the next hot space or trend?

• 23:29Speaker 02

  Well, I, you know, I am very intrigued by the impact of millennials um on across all industries. Um, you know, I they and and you're you're probably just on the cusp of that generation, right? I mean, they're and you know, I think they uh millennials have a very distinctive approach to life. Um, you know, they they seek immediate gratification, they look for flexibility, they look for, they care a lot about the mission. They care a lot about the, you know, the story behind the brand, um they don't necessarily want to own products um that they want access to them. Um, so so I I've been, uh what I'm intrigued about is sort of their impact of across of, you know,

• 24:12Speaker 02

  uh whether it's e-commerce or education, or I'm looking more and more at services like financial services. Um, because I think all these industries are going to have to think differently about how they how they reach out to and provide their services to the millennial generation.

• 24:30Harry Stebbings?

  And you said that that they like flexibility and they don't mind not owning their own services. Does that mean you're very bullish on the on-demand economy?

• 24:38Speaker 02

  I am, I am bullish on the on-demand economy. I, I will tell you, and I wrote this in a TechCrunch article at the end of the year. I also think there's gonna be a shakeout in the on-demand economy.

• 24:48Harry Stebbings?

  Wow.

• 24:49Speaker 02

  Well, I do, you know, I'm very, I'm bullish there, there are a bunch of services that are going to thrive. But I think there've been a lot of services that have been funded under the auspices of on-demand that people don't actually really need on-demand. And so, um, you know, I think we're already starting to see a little bit of that shakeout, um, starting to happen. I mean, we saw Homejoy shut down.

• 25:09Harry Stebbings?

  What is the on-demand that people don't need? I'm intrigued by this.

• 25:13Speaker 02

  Well, what I mean by that is that there are services, and I would put home cleaning as, as, in, you know, in that category, that I think in the past have been, uh, generally, people, uh, uh, are fine, um, scheduling them. Uh, you know, you're kind of scheduling them on a, you know, kind of repeat basis, like, you know, hey, come every two weeks or come every week. It's not, a- a- as opposed to, they sort of just need, uh, there, there, I'm sure there is a segment of the population, but I'm not sure it's the majority who just kind of need the random cleaning on-demand within a few hours. Uh, um, and in fact, when you looked at services like Homejoy, they weren't provide, you know, you actually needed to book it in advance.

• 25:54Speaker 02

  So it wasn't clear what the cellphone, uh, you know, what kind of what the mobile experience really added to the, to the process. I, I think it added more on the cleaner side than on the customer side. So, so I guess that's what I mean, which I think there are a lot of services that you don't, there, there's not an immediacy, uh, associated with, you know, it's not like hailing a taxicab, um, you know, or air hailing a ride, like in the case of Uber. Um, there, there's just less of a need for it to be, um, to be, to be truly, you know, an immediately delivered service.

• 26:29Harry Stebbings?

  What's your favorite newsletter or blog?

• 26:32Speaker 02

  You know, I do read um strictly VC.

• 26:37Harry Stebbings?

  Yeah.

• 26:37Speaker 02

  Um, you know, eh every day. Um, I will tell you that one of my, I I will give plug for one of my portfolio companies, Owler. Which um.

• 26:46Harry Stebbings?

  With the Ow- Owler?

• 26:48Speaker 02

  Owler, yes, yeah, yeah, which um allows you to track. O W L E R.

• 26:53Harry Stebbings?

  Okay.

• 26:54Speaker 02

  And it allows you to track competitive intel- intelligence, competitive information. Um, and so I use it to actually uh track uh all my portfolio companies and I use it to track other venture firms and it. It sends me alerts on um all kind of news and uh announcements uh and fundings that happen across. All those companies and firms and so it's hel- it's actually much better signal to noise than Google Alerts. Um, so so that I is is a very helpful source of information for me too.

• 27:25Harry Stebbings?

  And then finally, your most recent investment and why you said yes.

• 27:29Speaker 02

  So my most recent investment is a company called Maven, um where I co-invested with Andreessen Horowitz. It's a, it's an e-commerce platform um uh for.

• 27:40Harry Stebbings?

  Hair, is it hair?

• 27:41Speaker 02

  Yes, yes, for hairstylists to sell, and and and there, it's mainly um today focused on the African-American community and they. And they today's uh focus on selling hair extensions into that community and. You know, I got excited about it for a number of reasons. First of all, hair extensions is a, is is a big market that, you know, most people are. Pretty unaware of, but it's a, it's, you know, it's it's over a five billion dollar market in the US, it's growing.

• 28:09Harry Stebbings?

  Five billion?

• 28:09Speaker 02

  Yeah, five billion dollar market in the US and it's growing and it's a market that is um. Uh, great for e-commerce because uh average price points are high. Um, in the case of Maven, you know, average price points um approached two hundred dollars. And the, and the, and and the value of the product relative to the weight and therefore the shipping costs. Um, are are are are very good, right? So it's a relatively low shipping cost um for the product. So from an e-commerce. Perspective, it has great properties. It's a, it's a replenishment product in the mean, in the sense that um. People who use hair extensions, replace them on a regular basis. So I got it, so that was all positive.

• 28:53Speaker 02

  I very much believe in the company's thesis that hairstylists, particularly in the African-American community, play a very central trusted role in their communities. And I like the mission of the business, which is to really empower these hairstylists to actually increase their income by selling products to their customers without having to hold any inventory themselves. And finally, I would say, you know, the team has been, and Maven's been incredibly scrappy. They were able to achieve significant revenue without much seed capital. So, take it all together, it was a pretty, it felt like a pretty interesting opportunity. I like underserved markets in general, by the way.

• 29:37Speaker 02

  Like, you know, there are certain markets that, you know, speaking of sort of pattern recognition and what people are comfortable with, you know, there are certain markets that lots of people on Sand Hill Road would be comfortable with, like golf. But hair extensions would be one that, you know, would not be obvious. Yes, it is not obvious on Sand Hill Road.

• 29:59Harry Stebbings?

  Well Patricia, thank you so much for coming on the show today. It's been an absolute pleasure having you on.

• 30:04Speaker 02

  Thank you so much, it's been great to be here.

• 30:06Harry Stebbings?

  Again, I'd like to say a huge thank you to Patricia for giving up her time to be on the show today. And don't forget, if you would like to be in with a chance of winning the legendary Brad Feld's Venture Deals, signed by Brad himself, all you have to do is head on over to Product Hunt's new section entitled Podcasts. And all you have to do is upvote this episode on the podcast section and you'll be automatically entered into the competition to win the signed copy of Brad's Venture Deals. The links to the episode can be found at the website on www.thetwenty minute vc.com and they can be also found in the description on iTunes. As always, thank you so much for your support and we look so forward to hearing what you think of today's episode

• 30:50Harry Stebbings?

  and seeing you in the next show.