Why I Jumped on the Crazy Train of VC as an Emerging Manager

 Estoy loca. No, not really, but I know a lot of people think that when I tell them I’ve decided to raise my own fund. Why? Because the odds of failure are HIGH (not dissimilar from the startup failure rate), and the resources needed to succeed have typically only been afforded to white men with Ivy League pedigrees. Venture has long been an exclusive society that dared not let anyone in, let alone individuals with drastically different upbringings and credentials than what has become the typical VC. While disheartening, it is reality. But that’s alright, it just means this is a problem worth time and energy to solve, and that’s why I’ve come knocking on the doors of this crazy train of venture capital.

Allowing Entry into Venture Capital

Fortunately, venture capital as an industry is losing its ability to keep folks out, largely because we’ve found a key for entry – a key in the form of now democratized access to knowledge AND networks that were previously inaccessible. I can’t express enough how powerful those two things are in succeeding in venture and why the creation of resources to support diverse emerging managers has been instrumental in creating a new breed of general partners (GPs).

 These new GPs no longer fit the typical mold, which traditionally has been:

A) A white male,

B) Has Ivy League degrees, and

C) Dons crisp, brand name button-ups, perfectly tailored pants and shoes that scream, “I’ve never seen a puddle.”

Instead, you are now beginning to see GPs like me:

A) A first-gen American,

B) Holds degrees from the University of New Mexico and Dakota State University, and

C) Unabashedly/Proudly only dons clothing that was never paid for at retail, plus shoes that are painful to walk in, but I’m Latina and style matters sooo…. 

 The Value in Diversification

As intuitive as it should be for investors to see value in diversification, diversity amongst emerging managers didn’t become a focal point until the last few years. This shift occurred as organizations began promoting knowledge and funding resources, encouraging men AND women with atypical experiences, education, and ethnicities to explore careers in venture capital. Data shows that investors who avoid emerging fund managers in favor of more established counterparts could miss out on returns, particularly in difficult market conditions. For example, in the years immediately after the dot-com boom and the Global Financial Crisis, first-time funds significantly outperformed their established counterparts. Median net IRRs for first-time buyout funds were 16.3% and 15.6% in 2002 and 2003, compared to 12.3% and 13.0% for established managers. Similarly, after the GFC, first-time funds returned 16.6% in 2010 and 22.0% in 2011, versus 13.1% and 14.7% for their established counterparts. (Preqin News, 2023)

 This shift towards democratized access to knowledge, networks and capital for diverse emerging managers is largely thanks to organizations such as Recast Capital, Plexo Capital, Inicio, Able Partners, Capital Factory, Catalyst XL, Dash VC, GenZScouts, H2 Ventures, Pegasus Angel Accelerator, Sputnik ATX VC, Venture Cooperative, Venture Institute, Techstars, and Bank of America, who have seen the overlooked opportunity of portfolio manager diversification.

 This Passion of Mine

Those that know me well know that healthcare is my passion. I fell in love with this industry many years ago (first “real job” was working in home health while in college). Now I’ve found that investing in healthcare is more than just a logical “next step.” It is the most impactful way for me to drive the change I’m seeking. It is how I will create impact in the communities that I care about most, the communities that I grew up in. My focus in healthcare has always centered on underserved communities, primarily Medicaid. I devoted my career to this focus because I've lived the realities of the challenges these communities face. It is beyond being “low-income”. For many, it is about working day and night and still knowing that you will never have enough to give your families the life they deserve. A life that doesn’t sacrifice health to keep a roof over your head. A life that doesn’t have to weigh the risk of taking unpaid time off to see a doctor or “powering through the pain” so the electricity doesn’t get shut off. A life that affords equal opportunity access to health.

From Payer, Provider, to Vendor (and now Funder) – Oh My!

Having worked on the payer, provider, and vendor side of healthcare – I’ve navigated the complexities of this ecosystem and know it like the back of my hand. I understand all of the complex stakeholders, the evolving reimbursement system, where products do and don’t belong, and most importantly – why technologies in healthcare fail. The good, the bad, and the ugly that came with my industry roles – paired with the operator experience of building and successfully exiting a health tech startup – has perfectly equipped me to do my next favorite thing: supporting founders.

Anyone who follows me has often heard me say the following: “I believe entrepreneurship is the most vulnerable human experience anyone can voluntarily sign up for.” I believe this to my core, and as only one who has quit their full-time job with nothing but faith and conviction in their idea can understand. Entrepreneurship has been one of the most painful yet most rewarding experiences of my life (second only to raising children). This experience has created a deep-rooted respect and admiration within me for all founders. I know what it means to do the crazy and terrifying thing, I know what failure and success feels like, and consequently, I now know how to coach and empower founders to overcome obstacles and thrive.

 The Conviction to Succeed

 So here I go again, with that same conviction I had in 2017 when building my first startup. You all thought I’d lost my mind then too. “Are you sure about this?”, “What do you know about running a business?”, “The failure rate is so high.”, “Could you maybe dip your toe in first?” And the most memorable quote goes to a former spouse, “Hopefully this fails quickly so you can go back to work and get a real job.” In case you’re curious, we weren’t married for much longer after that.

I again have that conviction, commitment, skillset, and just a pinch of that delusional optimism required of any founder to succeed. So instead of doubting me because I’m cut from a different cloth, why not help me and other emerging managers succeed? You can start by sharing this post and connecting with us. Help build a more inclusive and impactful venture capital community. Our ecosystem only gets stronger because of it.

 References: Preqin News. (2023). Investors who avoid emerging fund managers risk missing out on returns. Retrieved from Preqin News