hi I'm Scott Carey, I'm an editor at Techworld.com welcome I'm joined today by Check Warner
one of the founding partners at ADA Ventures hi check hi thank you for
joining us we sat down and spoke last year for this same series about the work
that you were doing at diversity VC since then you've gone off and you've
founded your own fund how was that process for you what went into that
process yeah it probably sort of seems like it was a faster process from your
perspective but when we did last speak I was in the midst of our fundraise so it
was about 17 month process and it was really about kind of coming up with a
strategy around why investing in overlooked founders and overlooked
markets was going to generate fantastic financial returns and then it was shoe
leather it was just meeting hundreds and
hundreds of investors around the world and ultimately we ended up with a thirty
four million dollar fund we've got investors from several continents and we
were really delighted to be starting to invest in January of this year yeah and
so the way I understand it is a lot of the work that you did diversity VC which
was really focused on shining a light on the issues in the industry where there
is not enough diversity and inclusion at the VC side but what that obviously
showed you was on the founders side as well there was this this gap in this
funding gap and what you wanted to do I guess is come in and fill that gap is
that broadly correct yeah I mean it sounds when you kind of post rationalize
it like that a little bit more kind of strategic and like it was all planned
out but it really wasn't I think it was a real gut feel that myself Lilly and
Travis and all of us who do diversity VC had around something has to be done to
try to make this problem go away or address this problem in some way of lack
of diversity in the VC industry but also I was lucky enough when I was working at
my last fund to invest in quite a few companies that were led by diverse
founders and in many cases I saw their experience in terms
they're fundraisers and how much more difficult it was for them than it was
for the a typical the typical founder so it was a kind of combination of both
things and then it was a shared passion for this topic that I had with my
co-founder Matt as well and you talked about the experience of going out there
and raising your first fund a lot of shoe-leather a lot of meetings can you
talk a little bit about that process and what was it like for you as well from
someone that has talked a lot about the gaps in the industry you know the
networks tend to be kind of boys clubs and you know these people and that's how
you get your institutional investors how was it for you as a woman getting out
there and getting involved in that process
yeah it was incredibly expensive it's one thing which I think people don't
necessarily know about but you know one aspect of that is the GP commits which
is the amount of money you have to put up if you're raising a fund which is
typically 1% of the fund so if us it was three hundred thousand
pounds that we had to kind of somehow come up with in a whenever we went to
speak to our first perspective investor that was a question that they would ask
plus it was all the expenses of 17 months of living without an income you
know plus it was the flights it was the regulation it was a legal work it was
everything that goes into raising a fund so that was really eye-opening
I think another part that is kind of the same as what founders experience when
they fundraise raising is that it's so reliant on networks and who you know and
we didn't really know very many people it turned out we thought maybe knew more
than we did but we had to kind of do everything from scratch and I think we
came across you know a whole range of different characters in that fundraising
process some of which some of whom didn't really believe in diversity and
inclusion all that it would make any money or that women could make money and
you know we really heard everything you can imagine in terms of types of no and
in fact from a lot of people we just heard nothing so from sort of hundreds
of people at we spoke to you just never ever got back to us so I think it's been
you know we made a film about it because we wanted to
share our experiences and make that more open and transparent so that other
people could hopefully learn from it we're also about to write a blog and
publish it on what our learnings have been so few people that have to go
through it but I think it's given us a it's a cliche but a huge amount of
empathy for what founders experienced it makes like the process of saving for a
mortgage sound small-fry yeah that that that's gone on the back burner very
firmly yeah that's good to see where your priorities huh did the work that
you had done with diverse we've done STV see help put you on the radar of some of
these people did that open any doors at all yeah you mentioned that it may be
closed a few doors in people that you know weren't kind of bought into the
into that idea but yeah absolutely it's been a phenomenal platform and to
get to know the industry be more visible in the industry and that's a huge part
of building any kind of personal brand so I'm kind of grateful I guess to the
opportunity that I've had with our CBC to get exposure to people I wouldn't
otherwise be in rooms with I think it's it's there's not that much overlap in
terms of the limited partner community to what we're doing with diverse PC but
I hope there'll be more in the future and hopefully the experience with ADA
has opened my eyes to how much more work needs to be done around enabling people
who come from diverse backgrounds to be able to raise funds so for example the
financial supports with GP commit or getting some kind of stipend so that you
can cover living expenses because another thing that it was really visible
when we were raising our fund was how few fund managers are women or people of
color or have any kind of diversity and I think until that changes it's going to
be really difficult to change it lower down the stack and write what's your
future involvement with their SDBC look like it's obviously a massive passion
project for you but you it sounds like you've got other kind of pulls on your
time now yeah it's sort of always been that way in that myself Lillian and
Travis and Ben and Seb and everyone else kind of who works on diversity BC we do
it kind of voluntarily alongside their jobs and
that just is kind of continuing as it's always been but we are really excited
because we've just hired someone on diversity BC so we've got some more
support than we've ever had before so I hope that's going to mean that we can
move forward more quickly in that we don't you know become the roadblocks to
progress yeah and let's talk about your funders to Abeyta ventures you mentioned
the experience you've had in terms of you know finding under-represented
founders in the past and I know that you've got a fairly unique approach to
kind of unearthing those gems that's always been something I've been
interested in as you know it's a great idea in a theory but how do you actually
find these people yeah and that's also what we thought it
was a great idea in theory and is it gonna work and when we first started
doing it we were quite pleasantly surprised because what we've seen over
the course of the last in 17 months because while we were fundraising we
also were making investment through these special-purpose vehicles and we're
we're using this sourcing model and Tomatoes investments is that we saw
about 20% of our deal flow come from this network and even better than that
we've actually made two investments now that have come from introductions from
that network so I mean we find people through lots of different methods some
of them introduce others so if you run a community that's focused on LGBT tech
founders in North Wales you might know someone else who's running a community
who's looking at mothers in technology based in Edinburgh you know so sometimes
there's sort of peer to peer instructions sometimes it's people that
we meet through hello every day some types of people who come inbound and
contact us and say can we work in this way with you
so it really varies but it's it's exciting because we've got sort of 45 of
these communities now that give us this huge reach into something like 10,000
underlying entrepreneurs so it really leverages our time as investors and one
of the things we talked about when you were representing diversity VC on this
last year was making things more transparent is always going to help
bring new people into the ecosystem and how much of your time
aid goes in to kind of teaching these founders how
to play the game a little bit you know you get some founders who grew up in
this world of Oxford University and they went to McKinsey and they understand the
lingo and how to do it how much of it is an education piece as well yeah I think
it's a huge part and I think it's something that we're already finding and
it's super early days we've been kind of actually investing for about three weeks
or so you know TBC but one of the things that we're seeing is that we are ending
up spending quite a lot of our time doing things like giving talks or being
passive podcasts or video series or things that make venture capital not a
whole fundraising process more transparent and I don't think that
that's that sustainable so we're trying to find kind of hacks or ways to yeah
better leverage our time but one of the things that we've done is we published
our investments and decision making framework which has been great and
already we've seen that founders have taken that and actually like written
investment papers based on their company and send them to us so that's the kind
of thing that really validates that approach of if you put stuff out there
founders will take it and they will play it back to you and that makes your life
easier because you've got it in the format you want it yeah and I know that
you know your investment strategy is is on his overlooked founders but is there
any particular kinds of companies that you're really interested in at the
moment yeah so it's it's both overlooked founders but also overlooked markets so
for us at the moment the overlooked markets were really interested in our
women and in general non heteronormative populations which are not well
represented as we know in VC in tech so we think there are lots of kind of
underestimated problems that those populations face that haven't had
venture backed products and services addressed to them so fertility for
example as one kind of big area I think femme tech in general is another one for
women we are also really interested in the aging population as a overlooked
market so we are looking at a future of work solutions
in that space and then finally customers under the age of 23 which is a slightly
sort of different one but again because that population isn't represented within
venture we think that they face more more challenges to the sort of specific
products and services targeted to them than other markets yep and in your day
to day work at ADA how much of the stuff that you learn at diversity VC and a lot
of the practices that you know the best practices that you evangelize to be
brought to that side of the party in terms of not just the hiring you do as a
fund or the work that you do as a fund but also helping founders build that
diversity into their companies from day one you know without having to go back
and start doing it again later on down the line yeah I think lots and that's
the huge opportunity I think we've got not just our master strategy but the
kind of end to end of how do you do a versed in inclusion well throughout
both us operating as a fund but also the companies that we fund so to give you a
real example we've got built into our time sheets you know the company has to
have a diversity inclusion policy that we have to review and check and get
comfortable with within six months of us investing in terms of our process we're
slightly obsessed with decision making and how you can make really good
high-quality decisions so we've thought a lot and researched a lot into how do
you make those decisions objective and using kind of things like schools so you
can compare across using kind of characteristics around what founders and
qualities are versus where they went to school so we've started on all of that
but I think that there's like a lot more to come yeah
and finally I'd be remiss to not talk about kind of the broader industry
because that's something you've always taken such an interest in how quickly do
you see the landscape changing you know it's been a few years now since you've
been really focusing on getting more diversity and inclusion into the
industry as a whole and we've often talked about you know the the pace of
change being a little bit too slow for for
our appetites have you seen any kind of drastic changes there or does the work
keep going I don't know if drastic would be the right words to use
I think you know the level of engagement is certainly higher than it's ever been
I think something that's really encouraging is that we're seeing the
Treasury and government and the British business bank and big institutions
coming in and actually putting real policy in place around this even Goldman
Sachs exactly so what next yeah but but I think there is still a
long way to go and I think the issue as it's always been with venture is it is
such a small industry that when you're hires are being made at a pace of kind
of one a year or even less especially at part level it just ends up
being really difficult to see rapid change
yeah and that awareness level is certainly changing but yeah the actual
practical steps as your last report showed there's been a little bit of a
slowness or reticence to put those actual hard policies in so I guess we
can only keep you can only do keep doing what you're doing and keep advocating
for it and hope that change happens I guess yeah and we've actually got some
really exciting work in the pipeline that will be announced later on this
year that surround trying to make that um best practice policy really tangible
and really easy for those funds to put in place yeah because I think that
there's there's definitely buying but don't that's less good understanding of
what that actually means great I love to finish Iran at ease so we'll finish
there yeah but best of luck with all of your work at diversity BC under ADA for
the year ahead thank you so much thank you