Cleo Capital | Early Stage Fund Twitter – @sarahkunst | 21,000 followers Medium Blog | Instagram | LinkedIn | Wikipedia Relates everything to her love…
[Shoutout to Roy Bahat for the introduction!]
I love great conversations with people who speak with conviction. Sarah Kunst is one of those people. I felt immediately drawn to her throughout my research as I found her to be confident about who she is. Ravi Belani would say that it's a sexy characteristic! :)
Going through the big companies gave Sarah her corporate edge, working for Apple, Red Bull, and Chanel. After building her own startup and running out of money, one of her investors asked whether she thought about becoming a venture capitalist! I knew that this was always an option, but it was nice to hear a story where this was certainly the truth! She joined her first venture fund as an analyst after her first startup closing shop. From there she started another startup in the sports media space and also joined Sequoia capital as a scout, which gave her even more experience in the VC space. From wearing multiple hats and having a broad swathe of experience in the VC space, Sarah decided that building her own venture fund was the next big challenge as there were some unique holes that she believes she can fill:
"Scout investing in silicon valley is still an insider-thing, where you are angel investing on someone else's dime. The problem at the time was that they were all located in silicon valley and they were 90% male. I knew that when I built my fund I wanted to have a scout-element to it and decided to primarily focus on female scouts. Second, it's hard to find a fund that's really excited about writing early-stage pre-seed checks. I felt like there was a gap in pre-seed."Sarah Kunst | VC Hunting S3E2
So where is Sarah focusing her time? These days, she's focused a ton on marketplaces like Uber, Ebay, and AirBNB. These marketplaces are still young, and there is still lots of potential for 'shakeups' as Sarah says. While her 10+ female scouts have all the autonomy in the world to make good investment calls, Sarah feels like where she can shine is looking towards the future of marketplaces looking for really great investable ideas:
"It's kind of like making a souffle. You can have all the right ingredients in the room, but there has to be a little bit of magic that happens. Most baking is actual magic! I like marketplaces, I like pre-seed, I don't care where startups are based, it really comes down to is it something that I can be excited about."Sarah Kunst | VC Hunting S3E2
I appreciated that she relates everything to her dating life, especially that when it comes to startups, timing is everything! I suppose that metaphor can be stretched 9000 different ways!
"Maybe some guy I met 5 years ago, was in a lovely relationship and now it's over and then I run into him again and maybe the time is right. Timing in startups matters so much, and we think about hard work, execution, and all the things we can control, but in the early stage, timing is the thing you can't control.Sarah Kunst | VC Hunting S3E2
So what has Sarah learned since she closed her new mega fund?
"Fundraising for a fund is a lot harder than fundraising for a company. And running a fund is easier than running a company, so don't believe your VCs who say 'it's so hard!' It's harder than a random desk job, but it is certainly not harder than running a startup. I would say as a rule of thumb if you're thinking about raising a fund, assume that whatever you want to raise, you're going to raise 3X."Sarah Kunst | VC Hunting S3E2
I really appreciate these types of advice as they really help give me a broader perspective of the fundraising process! I'll need to remember this when I do a capital call for my future venture fund!
Pivoting our conversation a bit, I wanted to dig into a quote from her Marie Claire article from August 19, 2019 where she said: "There is a lot of data that shows that when women invest, you make more money." - I know this is true from a diversity standpoint as I've read plenty on this, but I also know that it's really hard to create causation, other than the idea that diverse people bring diverse ideas to the table. We can claim correlation, but not causation. It's still an area of culture where more research needs to take place, but I was curious as to what Sarah's answer was.
"Women as investors tend to have better long-term returns and diverse teams (not a team of all women), tend to perform better. This is not just in investing, but in business in general. When you think about why diverse teams drive better returns, partially because you have a bunch of different opinions around the table."Sarah Kunst | VC Hunting S3E2
One thing that many of our readers and subscribers may not know, is that Sarah was adopted at 2 weeks old. I wanted to dig in a bit and understand how that has shaped her worldview, however, being who she is, she answered very frankly, "I have no idea, as there is no version of me running around who is not adopted." A fair statement indeed. I'll let all of you listen to her explanation in the video!
So what is Sarah focused on in the next coming decade? According to a January 2, 2020 Medium blog post, she said that she's focusing on relationships for the next decade and that technology should enhance, not replace human connection. So what does that look like for Sarah in 2020 and beyond?
"For once I'm not talking about my dating life. It's the idea of most of what we do as humans is interact with other humans and where do we want to dial that up and have better interactions and where is it actually better to have less interaction that tech-enabled."Sarah Kunst | VC Hunting S3E2
It was my pleasure to speak with Sarah and I'll be tracking her progress as she goes. She's a real winner here, and I can tell she's going to be making a big splash (she already has!) in the future.
Enjoy my short retrospective!
May your aim be true.
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