Lisa
Welcome to the Atlanta Startup Podcast. I’m Lisa Calhoun, the founding general partner at the Atlanta venture capital firm, Valor Ventures. It is my complete joy to host a conversation today with Valor’s newest, youngest, and first full-time investor, William Leonard. William, thanks for joining me on the program.
William Leonard
Lisa, thanks for having me. How are you today,
Lisa
I am really excited to have this conversation with you. I’m also excited to be warm in the coziness of a fairly wintry day outside. I hope that our listeners are also really enjoying some comfortable surroundings for this conversation because we’re going to talk about something that a lot of people are curious about: how you broke into VC? I just love to turn it over to you and ask when did you even think you wanted to be in VC?
William Leonard
Yeah, that’s a loaded question. I think I first discovered my initial curiosity for venture capital during my senior year of undergrad. That is August of 2020 when I first started working at the Mercer Innovation Center as a fellow there and really experiencing what it takes to not only build a startup, but help grows sales, improve on marketing, carry out the operations, and really think strategically about growing a startup from zero to 10 then from 10 to 20. It really generated a lot of thoughts in my mind about, “Wow, venture capital is really interesting.” From there, I just started taking a deeper dive into the industry on a personal level and really understand how I could break into VC.
Lisa
Where is Mercer? For those who are listening and don’t know.
William Leonard
MercerUniversity actually has two campuses; the main campus is about an hour and a half south of Atlanta, Georgia. That’s where I went. They also have a graduate campus about 15 minutes north of Atlanta.
Lisa
What did you study there?
William Leonard
I actually majored in finance and entrepreneurship at Mercer. I started out as a risk management major. That was an interesting experience but I didn’t find myself really adhering to the material and envisioning myself down that career path. I took a step back, talked to some friends who were in entrepreneurship courses, and got their feedback on what they were learning about. Of course, you can’t teach entrepreneurship practically. But you can build up a skill set and a toolkit to help you succeed as an entrepreneur. That’s what the curriculum was really doing. Hearing my friends rave about their professors, the projects they were doing, the speakers that they were having, it was almost like a no-brainer for me to really jump and add entrepreneurship curriculum to my course load.
Lisa
Is entrepreneurship in your family? Did you get associated with it before school?
William Leonard
My dad, when he retired from the Marines, he actually started a photography business in tandem with his corporate career which has been a great undertaking for him. He’s not a huge or nationally known photographer, but he does it on the side and he absolutely loves it. I also have a family who has become real estate investors. Seeing them leave the corporate world to really go be a wholesaler full time, a landlord, or a tenant manager is really inspiring to me and I was able to just see how they took a risk. Because that’s what entrepreneurship is, you’re really leaving the comfort of what you know to go start something that can be life-changing, not only for you but for the world.
Lisa
It’s interesting that you were studying risk management. I know you’ve moved a little bit away from that. But there are certain schools of thought that would say the venture capitalists are risk managers focused on the small side of entrepreneurship. It’s an interesting perspective. When did you think you would study risk management what was motivating you then?
William Leonard
I grew up and I’ve had some insurance salesmen in my family. That’s what the Mercer curriculum was really centered around. Insurance, casualty insurance, surplus lines, and things like that. I had a keen understanding of what it was. But as I began to dive into it, I saw that it just wasn’t for me. I thought risk management was something more so on a strategic level. That’s what I was really looking for. I had the finance knowledge and the finance curriculum that I was taking, but I also wanted to pair it with something more strategic. I really was searching for that aspect of things.
Lisa
Tell me a little bit more about the Innovation Center and some of the work you did there. It sounds like you got a lot of exposure to the basics of building a startup.
William Leonard
Yeah, I actually started working at the Mercer Innovation Center, like I said, during my senior year in August. One of my good friends I had met actually on my first trip to Mercer when I was doing a tour. He actually had built a startup through the Mercer Innovation Center. The center actually pairs students with founders on campus to help give them support, operations, marketing, sales, and things like that. I joined Jabril, who was building Royalty Headwear at the time, as their sort of Swiss Army knife intern. Jabril really threw the book at me when I first started which was great. I was a little overwhelmed at first. But he really threw the book at me and really gave me free rein to help with the sales strategy, help with their marketing strategy on social media, think about digital marketing, SEO, and things like that. It was great. I had never had this type of operational experience before. But as I began to really cherish what I was doing, understand it, and see the tangible impact of it on the business, that’s when I really fell in love with the startup ecosystem and the impact that somebody like myself can have on a business. I sat down with Jabril once a week and we just talked about what I wanted to learn. I was like, “Jabril, I want to learn everything about this man. Like how you’re thinking about acquiring customers, how you’re thinking about your business model, how you’re thinking about ordering from vendors, and things like that.” Jabril really exposed me to it all. After that, I became a champion of the Mercer Innovation Center. I tried to get as many of my friends who were marketing majors or even psychology majors to come in and try and work with some of these student-led startups on campus to really serve in an impactful role.
Lisa
What happened? Basically, you’re there, but you’re a senior at your school and it’s coming to an end? Take us back to that time in your head. Were you thinking about breaking into VC then? Were you thinking about starting a company on your own? Are you thinking about joining a team? What was your decision-making process like?
William Leonard
It was probably October/November when I really started thinking about how to practically get into VC. I started researching ways online, YouTube, of course, and really just saw how difficult it was to break into the industry, even for students who went to the top, target schools in the northeast and west. How difficult it was for them, let alone myself from a small private school down in Middle Georgia that most people probably have never heard of. I began researching other alternative ways to get into the industry. I saw that there is an apprenticeship route. I began to really research a lot of the apprenticeship programs across the country. I applied and I was accepted into a few. But ultimately, I chose to go with one in New York City with the VU Venture Partners. This was a unique experience in that you have to pay to be a part of this apprenticeship.
Lisa
You didn’t take a job right away. You paid someone to teach you more about how to do things.
William Leonard
Correct, correct.
Lisa
That’s an unusual choice.
William Leonard
Especially as a senior in college who doesn’t have that much money, I took on-campus jobs but didn’t equate too much. I spent a great sum of my personal savings to really participate in this apprenticeship which started the following semester, so January 2020. This apprenticeship was based in New York City. There was a virtual component to it but I really wanted that in-person experience, because that’s where I thrive the most, I believe. It was unique. I was traveling really back and forth from New York to the campus from January to March, and I’m really grateful to my professors and the deans on campus, who were truly understanding and supportive of what I was really trying to do here. Going through that 11-week apprenticeship with VU Venture Partners, was a really robust program. Every week, something new was added to our plate. It really helps shape the framework of how a VC thinks, how a VC evaluates opportunities. It was really just a mental exercise that I fell in love with because each company you’re looking at is so different. For each opportunity, whether it’s domestic or international, you have to think about so many varying factors. I really love that. Working on the FinTech team with VU Venture Partners was an amazing experience. At the conclusion of that 11-week program, I still didn’t have any VC offers or anything like that.
Lisa
Do other people in the program tend to get offers? Give us a sense of what’s normal? For those who are listening, who’s never tried to break into VC, or maybe thinking about it someday, what did you learn normal was coming out of a paid fellowship like that?
William Leonard
When I was doing my initial research, I saw that most entry-level, junior team members in VC had two to three years of investment banking experience, some type of consulting background, or they come from the operational side of things. I had none of those things. It kind of made sense. “This kid only has 11-weeks of venture experience. He has some experience working with the student-led startup but we don’t think he’s ready for VC full time.” Which was fine but I really took a bet on myself and I was confident in my skill set that I had built, not only through VU Venture Partners but working with the Mercer Innovation Center as well. Some of my cohort members, I was a member of cohort seven, did have some full-time VC offers, but it was unique because VU Venture Partners has the cohort system where you can roll your membership over to the next cohort if you’d like. Some of my teammates had been there for two or three cohorts prior. That experience and that combination of building a network, having a sense of deal structure, deal-making play to their benefit, and they were able to take that and really roll that into a full-time role whereas I had 11 weeks of experience.
Lisa
Right. I guess you didn’t choose to roll it forward into cohort eight?
William Leonard
Yes. As I said, you had to pay to be a part of this program. It’s a little capital intensive, but you know, it was worth every penny in my opinion. If I had to do it again, I certainly would. I recommend that to a lot of young individuals, as well as older individuals looking to make a career change, do it as well.
Lisa
What’s something that surprised you when you learned through that program? Like you, I’m a constant learner. Sometimes I get my mind blown and I love that feeling. If you could take us back there, what was this sort of “opened a new door, opened a fresh landscape” moment of learning for you?
William Leonard
I think it was just the scale of thinking that you have to have as a VC. I remember when the general partners were talking about we’re only looking for investments in $10 billion markets. I was like a $10 billion market? Coming from a small town in Middle Georgia, those numbers don’t get thrown around very often. I was really thinking about, “Okay, $10 billion is a lot of money.” It’s a huge market opportunity. I was really thinking on that scale of companies that are operating in particular spaces that have a market cap and a size, capable of fulfilling these needs, which was interesting to me. It was just such a unique experience every day. We walked through financial modeling. We did a lot of hypothetical situations, in terms of modeling out returns. It helped to shape my understanding and my perspective, as to the entire investing process from what it takes to the source of a quality company, to have that first call with a founder, to pitching that company to your weekly partners’ meeting, garnering feedback from the partners, going back to having another call, bringing partners on that call, and then going into diligence than just the work required to really diligence a company that you’re about to pour a significant sum of capital into, and then pitching it to the Investment Committee, drawing up deal terms, deal structure, and then you know, wiring those funds. Seeing the entire investment lifecycle, over that 11-week apprenticeship was just amazing. It did a lot for my confidence as well.
Lisa
Awesome. You came back to Atlanta. What was the next step after you come back with 11 weeks of, “Wow, I really know what I’m getting into.” Are you still excited about ventures or are you kind of like, “I might explore other opportunities.”
William Leonard
Yeah, so my apprenticeship ended within the first week of March. We know how the first week of March started out. COVID really started to take over the world. I was actually in New York City when the city announced its first COVID case so I was really trying to jump back to Atlanta as quick as I could.
Lisa
You were ready to get out.
William Leonard
Yeah, I got on a red-eye flight at like, 11:30 at night and had my parents pick me up at the airport. That was unique. After this apprenticeship, I was like, “This is really where I want to be.” Because that experience I had was truly invigorating. This is where I see myself starting out my career, and I did have a job offer at the time, not in the venture, but in finance with another bank. I really had a decision to make here. I was like, “Wow, I have a full-time offer right now from the bank, an amazing role that a lot of people would likely kill to have. Or I could turn down that role and pursue my dream of venture in the startup world.”
Lisa
Did you apply to that role?
William Leonard
Yes. I actually got that role when I interned with this bank in my junior year summer, heading into my senior year. They made a full-time offer going into my senior year in August. I was pretty comfortable. It was smooth sailing. I was like, “I have a full-time offer so I don’t have to stress too much.” But as I really thought about things, my mindset began to shift. It’s March/April now. I’m really contemplating what I’m going to do. It really came down to how do I want to start off my career and thinking about that, starting off your career in a field, or an industry you’re not fond of or you’re not most comfortable in is fine. Because you’re 21/22 years old, you can easily make a transition. I have so much conviction in myself and my abilities at the time, that I really wanted to break into a venture. I started doing a lot of networking, organic networking, of course, which is so important in VC. Because people can oftentimes tell when it’s not genuine when you’re really trying to just establish a one-sided relationship. I started building genuine networking skills and genuine relationships to help make these introductions. I actually started working at a startup in April in New York City that I had come across through a friend. I worked there in an unpaid role. But it was amazing because of the experience I got. It had two founders. They were working on a prop-tech company and so I was able to work with them across sales, marketing, business development, and even help them refine a few of their pitch materials. That was an unpaid role like I said, and I really was able to see the work that I did, and how it really translated to advancement for the startup at the time. A few weeks later, after that, a paid opportunity with Dynamo Ventures came along. That role was a fellowship in Chattanooga, Tennessee. Ultimately, I was offered the role. I relocated to Chattanooga in June of the summer of 2020. Dynamo’s a supply chain mobility VC, and I had no prior knowledge of either of those industries but I joined the team with just an open mindset on how I can come in and be a value add and bring unique experiences, and actively contribute to the team. That was kind of my path there from the last few weeks I’ve been to university, to navigating through COVID and thinking about the job process and landing at the startup in New York City, to landing at Dynamo then.
Lisa
Chattanooga, okay, that is a unique place as well to work in VC. There are some amazing companies, there are just amazing investors there. But again, like Mercer, it’s an unusual choice. It’s one that you’ve really made work for you. What are some of the things you learned in Chattanooga at Dynamo about investing?
William Leonard
Yeah, definitely. Chattanooga is an amazing city. I would encourage all of our listeners to really visit Chattanooga and understand the city, the dynamics, and understand the ecosystem of that place because it is so special. Chattanooga, they call it freight alley, because it’s a key inflection point of freight and goods coming in from the port of Savannah, coming in from the Gulf Coast, and really moving into the heartland of the country. There are deep supply chain routes there. The Dynamo team really took advantage of that and made that their niche. Our listeners can definitely research the Dynamo story. But working with Ted Berry, John and Santosh were one of the most pivotal experiences in my life, because those guys, know how to choose winners, and their framework as to how they think about the industry, how they think about investing in this industry, and on an international scale was really unique. I had never really thought about it like that before. As they think about building a brand for fun, because you’re in Chattanooga, it’s a small town, oftentimes when I was there, I was speaking with founders, they were like, “Wait, where are you again? Where’s Chattanooga?” I always had to use Atlanta as a reference point. But when I think when we look back in five years, people are gonna know where Chattanooga is. People are really beginning to know that now. Because the Dynamo team is putting them on the map from an international scale. Understanding the opportunities that you have with Dynamo as a fellow. They really prep you well, but they also let you make mistakes because you’re going to learn from your mistakes. As you learn from those mistakes, it becomes first-hand knowledge and you begin to really have an understanding of what it takes as a fellow to really build that knowledge as an investor. In that six-month time period with them, I was really able to look at an array of deals, hub diligence, a great number of those deals, and really contribute to how the team has created a more robust investment thesis over the last half of the year. Because the first half of the year, things were really silent on the venture front. As soon as June came around, it’s like the venture world exploded. We saw a record number, a record funding volume, especially within the supply chain and mobility. There’s a really great opportunity there. I hope that a lot of our listeners really do their research on Dynamo, and really understand what they’re all about.
Lisa
What changed for you, if anything, between what you learned at VU and then what you learned at Dynamo? Was everything completely coherent or did you find yourself holding two ideas, neither one of these things can be true at the same time? Where did you start to develop your own judgment calls about what’s the truth versus what’s convenient truth for the organization?
William Leonard
Yeah, that’s a great question. I think it’s something that’s still evolving for me. Thinking about market sizes is interesting. VU was a much larger syndicate fund. Dynamo was a little bit a smaller fund. You’re thinking about investment opportunities on a different scale. You’re thinking about return analysis, and then you’re thinking about acquisition opportunities, exit opportunities. Each fund is going to be different based on you know, a whim. Things tend to really shift back and forth in your mind. It’s really up to you as a growing young investor to really decipher between, “Okay, this is what I believe, and this is what the fund believes.” I would say it’s something that is constantly evolving as to developing my own investment framework, my own investment thesis, especially within particular verticals that I have some background knowledge of or some experience in.
Lisa
Did the fellowship come to an end after six months? How did you make the transition into Valor? In your own mind, how did you captained that for yourself?
William Leonard
The Dynamo fellowship is a six-month rotational program. They try to get new fellows twice a year to really help acclimate them and introduce them to the VC startup world. Dynamo did an excellent job of making introductions to other investors to other startups. They play an active role in helping the fellows really try to find a role after Dynamo. I went through the interview process, and the venture process is very long and drawn out. I would say it can be taxing at times because you’re given case study after case study. But I am truly grateful as to those experiences that I had, I did have with other venture firms to interview with them. I came across Valor while networking at Dynamo with Austin, and Rodney, and I kept an open line of communication with those guys. I had a bi-monthly check-in with Austin. We spoke late in December or early January and he said, “Hey, Valor is looking for a full-time hire here. I think you’d be a great fit.” I instantly applied to the role. I had a great initial call with you, Lisa, and then had a great follow-up call with more of the general partnership and some of the venture partners. I really fell in love with the thesis of the fund and in the makeup of the portfolio companies as well. Growing up in the southeast, I always hear about Silicon Valley, the Northeast, and how the majority of venture dollars go there. But I think really cultivating the ecosystem here is the appropriate thing to do. I think as you look at it, and especially as you look at Atlanta, I think we’ve had what three unicorns announced here in recent months. Atlanta is really establishing itself as a burgeoning tech hub that is not only going to be here for A five to ten-year period. I think Atlanta is here to stay, just because of the cost of living. Where we are in terms of geography, the weather is another big thing. Then there are more geopolitical factors as well that go into that really make Atlanta attractive to not only founders but to investors to pour their capital here as well.
Lisa
Spoken like someone who’s a true convert to Atlanta, but it also helps that I think you were raised here. We’re glad to get you back home after your tour of duty in Macon and Chattanooga in New York. For those listeners who were putting the story together, I want to point out that Austin was in New York at the time and in Valor’s intern program., to your point, William about organic networking. Austin was interning with Valor like you were in a fellowship with Dynamo. Austin was never in the set of people that were interested in a full-time role in the south because we’re really southeast-focused investors but we loved having him in our intern program and he’s an amazing investor. Whoever gets Austin Meacham is gonna be very, very glad they did. But to your point that organic networks have real stories between real people helping each other get to where they’re going, that is what makes startups and venture capital go around. What are you excited about investing in our time at Valor? As we sit and record this interview, we’re in the first quarter of 2021. You are looking at really dozens of deals a week, looking at your reports, which is exciting. What kinds of strategies are catching your eye? Do you have any personal theses that you’re pursuing within Valor’s fund mandate that our listeners should know about so they can bring you those deals?
William Leonard
I think given my background and in the finance realm, I’m really captivated by a lot of FinTech startups right now, that are really seeking to serve underbanked and underserved Americans. I know we have a portfolio company, CapWay, that is really serving in that regard. There are so many other opportunities to serve those communities, whether it’s peer-to-peer lending or other lending structures. I think those are unique opportunities there. Because banking is going digital, I can’t remember the last time I use cash to really complete a transaction. Understanding the different vectors of what’s going on right now in terms of finance and banking and in this shift to retail investing that a lot of people are really undertaking right now. There’s a lot of opportunity in those areas as well.
Lisa
I couldn’t agree with you more. You know, FinTech is, of course, one of our really bigger sub-themes. Some of our portfolio companies like FundingU have a unique AI, which’s a behavioral risk model trying to replace the FICO score, and it should be replaced. It’s not that valid. It’s old-fashioned. Finance is a slow-moving industry. Today’s fast-moving tech has lots of opportunities to overtake the old process, make it much better, make it much safer, and reduce that risk. I know you’re a pretty perfect fit at Valor, if I may say so. William, I’m really, really excited about investing with you in the years ahead. Is there anything you want our listeners to know about you that would show they’ve listened to this podcast and done their homework so they could impress you on their first call?
William Leonard
I think it’s clear as a founder and equally, as an investor too, is to really articulate your vision in a clear and concise manner. I’ve been on a lot of pitch calls. Sometimes I still can’t seem to understand what the founder does, and what their vision is for the business. Being able to articulate that is key to an investor because you’re selling an investor on why your vision is going to change the world, and why they should financially back you to help support your vision. Articulating what you’re trying to do, having a clear and concise way of thinking about it. It is really just important. I see a lot of founders try and skip over that part, especially at the beginning of calls, or not necessarily skip over it but they tend to just say a few words here and there. But that’s what I want to know. I want to know about your vision, right? Because I think the best pitches are conversational. It’s not walking through a pitch deck. This is how this issue is affecting me. This is how it’s affecting you. This is my solution to solving this problem. Taking it from there, in a very conversational, articulate fashion, is really what we’re looking for.
Lisa
Final question, I know a lot of our listeners are younger people, let’s say under 30. Some of them feel like they truly have a calling into investing. They might not know the shape or flavor of that calling, but they do feel called into some type of investing. But they don’t know where to start. What advice would you give someone in that situation that they can do now to get started on that path?
William Leonard
I would say, do a lot of research and really look at the Internet and use LinkedIn as a tool. What I mean by that is, if you have an idea, and you say, “Well, I think I want to be a VC investor.” Do some research on VC investors online, go to their LinkedIn and look at their path to how they got there, where they are now and try to understand. Okay, they came from this university in this geography. They may have started out here at this bank, they transitioned here. Of course, everybody’s story is going to be different. But understanding some of the paths that these people took is really important because you can emulate that or you can put different pieces together and try to create your own path based on what they did. That’s what my friends and I did. I think it really pays dividends just to put yourself in that mindset. Also when I was really thinking about VC as a career, I am not an accredited investor. I can’t be an angel investor right now, I don’t have the capital. But I put myself in that mind frame by getting a group of friends together sitting in our apartment on a Wednesday night in university, and talking about some of the public companies that we liked, and really retracing their steps to IPO, looking at their fundraising journeys, and trying to get a sound understanding of r the different vectors within these businesses. Then we do the same thing for some of the public companies that we like, and really just trying to understand their journey from the pre-seed stage to Series B to the series D. Put yourself in an investor framework each day, and I think you’ll learn something new, and you’ll be able to apply that to your journey as you want to really seek to become an investor.
Lisa
Thanks, William. It was a pleasure diving into your story, which is still being written, the legend is being made. Thanks for your time.
William Leonard
It was a pleasure. Thank you, Lisa. for having me.
Lisa
Thank you for listening to the Atlanta Startup Podcast. You know, we’re not just a podcast, we’re a community, and we’d love to see you at one of our digital or physical events, go to valor.VC and sign up for an event that makes sense for you. We have events for founders and the investors who back them. Another event you might enjoy is Startup Runway. The Startup Runway Foundation is a Valor organization that provides $10,000 grants to founders who are women or people of color building next-generation software products. Applications are free and we’d love to hear from you at startuprunway.org. And as always, thank you so much to the organizations that make this podcast possible. Not only Valor Ventures, but also Write2Market, a tech marketing and PR agency in Atlanta, Georgia, and the Startup Runway Foundation and Atlanta Tech Park Valley’s headquarters, and also headquarters for over 100 local entrepreneurs, building global businesses. See you next week. Please bookmark the podcast and join us.
