William Leonard

Welcome, everyone. I’m William Leonard. I’m an investor here at Valor Ventures. We’re an early-stage fund in Atlanta, Georgia. And for the Startup Runway Foundation this morning, I’m really elated to have a group of dynamic and inclusive venture capital investors here for a conversation to share more about what they’re looking for in founders today. We’re just gonna dive right into it. I’m gonna let them introduce themselves, share a little bit about their funds, their backgrounds, and if you don’t mind,  De’Havia, I’m gonna ask you to kick us off here.

De’Havia Stewart

Thanks, William. Yes, I’m De’Havia Stewart. I’m part of SB Opportunity Fund, which is a fund that was launched a little over a year ago with the pieces of investing into underrepresented founders. We define that as founders that identify as black, Latino, Latina, and Native American. We are a generalist, so investing across various sectors at the seed, series A, and Series B stages.

Maria Velissaris

Hi, my name is Maria Velissaris. I’m a Founding Partner of SteelSky Ventures. We invest in companies that create better access care and outcomes in women’s healthcare. We invest from early-stage to about to Series C. We invest in companies across the spectrum from drones that deliver prescription medicine to telemedicine platforms to products and retail stores. Excited to be here today and to meet all of you.

Vernon Lee Jr

Hello, everyone. Vernon Lee, I’m a Partner with The Marathon Fund. We’re a pre-seed, seed, and pre-Series A fund based in Washington DC. We have a local focus in terms of sort of Mid Atlantic DMV, Mid Atlantic, but we do invest across the country, and with our colleagues. We do like to leave most of our deals but we’ll co-invest and follow on with some of our peers. In terms of industry focus, we really lean into Ed-tech, FinTech, Digital Media, Health Tech, GovTech, and Real Estate Tech. Those are the verticals that we really lean into. We are opportunistic in terms of opportunities and like some other peers here, we are very much focused on underrepresented entrepreneurs, Black, Latinx, disabled, LGBTQ, women, and veteran entrepreneurs.

William Leonard

Awesome. Well, again, it’s a pleasure to really have you all here. I kind of want to kick it off where Vernon just left off. As you think about other early-stage investors, other funds out there that maybe aren’t investing, or have a focus on underrepresented founders, what should they know about underrepresented or overlooked founders? What are some of the traits and characteristics that you all love about these founders and entrepreneurs?

Maria Velissaris

One of the things that I love about underrepresented founders is they are also looking at underrepresented sectors, and they’re focusing on areas that the majority of the population isn’t focusing on. Because so many founders tend to be very homogenous. Founders who are diverse will come up with diverse ideas, diverse solutions, diverse products and services, and also can create better services to meet the needs of their own communities. Because who understands black maternal health better than black maternal moms? People that are going through those who better know how to serve these types of population than the people that are a part of those communities? That’s why I really love the different perspectives that they bring to the table.

Vernon Lee Jr

I would agree. I mean, if you really just look at the data, there’s so many reports and studies and it’s been proven over and over again, around the diversity of thought, diversity of approach, diversity of teams, and problem-solving within the corporate world, and the entrepreneurial world just has better results. When you really look it almost says, undervalued asset class, right? If we’re talking about even just returns basis, you have an asset class of black, brown women, underrepresented entrepreneurs that have been underfunded, and underfinanced for decades. As an asset class, that provides a great opportunity on the upside, because there’s more opportunity just on a return basis when you think about the amount of talent that exists within that sector.

William Leonard

I can certainly agree with those. Those viewpoints are there every single day, I’m speaking with underrepresented founders and I’ve worked with two or three cohorts now of Startup Runway, and definitely can echo what you all are saying in terms of targeting those underrepresented markets, markets that are targeting unbanked Americans. We think about those demographics, you think about it largely being African-Americans, older African Americans have that younger African Americans without access to WiFi, and education and things like that. It’s really interesting to see that viewpoint. I want to transition here a bit. We all are investors, right? And so we’re speaking to founders, I’d say on a weekly or monthly basis. We hear a lot of pitches, and we hear good pitches, we hear bad pitches, we hear pitches where a founder can really take an opportunity to emphasize their story and to emphasize their unique insight into a particular industry. My question to you all is what practical advice do you have for underrepresented founders on how they can really bring out their story in a pitch? Is there any advice for pitching your specific fund as well?

Vernon Lee Jr

I guess I’ll kick this one-off. This has probably been said a lot, very often, but do your initial research on the fund. We heard health care is the focus for Maria, it’s fine. I mentioned from an industry that we tend to lean into the heavier talked about being more generous, do the research upfront before you approach any fund. Also try to understand what stage and investment because if you don’t even have I know, for The Marathon Fund, you got to already have some market acceptance and some MVP when funding ideas as much as we would like to but out of Fund One, that’s not our focus. I would encourage founders to really do research before they approach any investor. Once you get the meaning and opportunity for us, we’d like to see a good a nice one or two pages after summary to really summarize the problem that you’re solving. You know what, if we move beyond some executive summary, and we decide to have a meeting or conversation, one of the things that I find a bit of a challenge for some founders is when he talks about there’s no competition that what we’re posting to, there’s one out there doing it now, so they’re doing it. Someone’s out there doing it, maybe they’re not doing exactly how you’re describing it, but please come in and have a good slide on your, I love to say, a nice matrix that shows your competition and you know, checkmark or X over your functionality to opportunity exists. I would just say this data can’t be one extra 2x better than your competition. It should be for high growth companies, which you should be looking at 6-10x better in terms of the problem that you’re solving.  That’s how we would look at it in terms of evaluating opportunities.

William Leonard

Hey, Vernon. I wanted to expand on that point a bit. Is the bar higher for underrepresented founders? Is that how investors kind of see them through that lens, like the bar needs to be higher for them?

Vernon Lee Jr

Now for us, I mean, the bars are higher. In fact, we take probably less volume base, if you will, like we really take more time to get to know the entrepreneur. We’re okay with that. It takes some time to really assess sort of decision making, even if you’re a first-time founder, it will take the time to really get to know you. For us, the bar is not higher, it’s just in terms of trying to save the entrepreneur time. And this time, we’re going to articulate our area of focus first, so they can be better prepared when they first engage, but for us, we were okay with there being a little hair, if you will, on an opportunity and it’s not perfect, but there are some fundamental things we want to make sure that the founders have been able to articulate and as thought through as we engage them.

De’Havia Stewart

I agree. Sometimes founders when they pitch to different firms, they may even decline that because their business is not attractive, but for other reasons, such as portfolio construction, stage of investment, investment conflicts, and you know, sometimes the firm may be going after certain themes that the company just doesn’t fit at the time. But I think some things that founders should prepare before pitching investors is understanding how much capital they need to raise. Having a good idea of your current burn rate, and then also the future burn rate is given new additions you may be adding to the team and new expenses. Also having a good idea of the goals of the fundraise. How will you be using the funds? Is it going towards your team marketing and so forth? And then ultimately, what are some of your goals with the fundraiser like, hey, maybe I plan to acquire 10,000 users experience 10% month over month growth and to get to 1 million ARR by my Series A. Having a good plan is also very important, I think. And then right now I’m in Ponce City Market helping with some of the pre-seed startups in a TechStars cohort. We talk a little bit about developing assets, so pitch decks and financial models. Building a financial plan that yields an interesting company to people. ultimately crafting a narrative using your financial planning deck and helping us understand how the business is in your strategy for the next 18 to 24 months.

Maria Velissaris

And I agree with everything. Number one, if you’re a FinTech company, if you do crypto, Bitcoin, I am not the VC for you. You would be surprised how many people reach out to us. And they were like, “Oh,  I’m making a tennis racket or I have a cupcake shop.” I’m like is that women’s healthcare? Don’t make me feel like a mean bully by when I don’t respond to you because you didn’t do your research. It puts us at a disadvantage because I don’t want to say no to you. I want to say, “Yes, this sounds like a wonderful idea.” Of course, we want to hear your pitch and yes, we can help you scale and grow your business, but today at this point, that’s not going to happen every single time. You could be too early. We could have a conflict. But don’t hold that against the investors. I think that sometimes people are like, “Oh, well, the investors don’t get me there.” “They’re hating on me because I’m black.” No, sometimes it’s not because you’re black. Sometimes it’s because you didn’t do your research. Make sure that you are really deliberate about who you’re approaching, when, why, and how because I think that can go really far. It also can not only help, but it mostly can hurt you. When we see people coming to us and they are completely off thesis, and then they ask, “Oh, well introduce me to somebody else.” No, you weren’t even thoughtful enough to approach me correctly. Why would I introduce you to my contact?  I would really steer away from doing that. I know, there was a lot of advice out there that says if somebody says no, just ask them for more intros only do that. If you have a relationship with a VC, I don’t know you and you didn’t make a good impression, among the likelihood that I’m going to say anything good about you, as I pass you on to the next VC is not very high. I think it’s important to be self-aware when you’re out fundraising because you only have one chance to make a first impression.

Vernon Lee Jr

Can I just echo what Maria is saying because the other part of that is there are a lot of great founders, entrepreneurs that are actually doing exactly what she’s describing. There are ones that aren’t doing that and that’s why I just want to echo part of what she’s saying is that the good founders are doing their research, they’re coming in prepared. If there’s any perceived perception around, “Oh, well, I’m making the first shakes.” No, your peers, who you’re competing against other founders are doing that level of research in that engagement.

Maria Velissaris

And then they’re also telling me, why would want to invest in them? And they say, “Oh, because you invested in 23andme. I know you like diagnostics, we’re doing something similar that’s addressing these types of needs, then it really gets my wheels turning, and I’m like, this is the kind of thoughtful entrepreneur that I want to engage with.

William Leonard

I wish I could retweet that 20 times because that is so true. You know, I think I get at least four to maybe eight inbound emails a week. It’s just like a random idea and this has nothing to do with that thesis at all. You can tell who is thoughtfully crafting these messages versus who’s not. It’s evident. And then I think, to the point of lining out, or lining up your milestones, and outlining them in your deck, and then the investor conversation is critical. You don’t see a lot of that. You just see people saying, “Hey, I need $3 million. We’re gonna hire. We’re going to build out our sales team.” What type of strategy are you going to use? How specifically are you going to use that capital? You need to get pretty granular with it. Because VCs are going to want to see that, especially as we dig in a little bit later.  I think that’s unique advice there. We kind of talked about the inbound process of how they can pitch you. But now, let’s say somebody has pitched us. We know that VC is really a lot about pattern matching.  One or two to three traits in founders that you all really look for that consistently show you, “Okay, this person has x, y, and z down. I think this may be a great leadership team to help lead this company to get to X, Y, and Z milestones.” Are there two or three particular traits that you all look for in the founder?

Vernon Lee Jr

I mentioned one, and I briefly touched on it earlier in my decision-making. Even if you’re a first-time founder, we’re looking for evidence of your decision-making capability, whether it’s industry knowledge, whether it’s something unique about the way that they are proposing to solve a particular problem. We’re really trying to get to know the entrepreneur founder on whatever their past history or background is around decision making. Because ultimately, whatever the saying is about best-laid plans once they had an impact starts to change, because we want to be able to understand how the founder is going to think through and process information, and potential adversity, which they’re all going to have. We really try and look for ways to understand how their decision-making and thoughtfulness around whatever it is that you’re approaching. We actually have a founder rating system, a nine rated out across several different categories, as some aspects are subjective, but we actually use that rating to try and drive when we do our investment memos to determine is it what we thought it was when we look at those categories? That’s just one area that we really focus on around decision making?

De’Havia Stewart

I definitely agree. One of my favorite founders in our portfolio is a woman. Her name is Joanna. She’s the founder of an ed-tech company called AllHere. One thing that Vernon mentioned is having back a great background. It’s an Ed-tech company, and she spent around five years working in K through 12.   She brings a lot of industry knowledge and then just from the materials that she sent us over and over diligence in her company, they were very detailed and thoughtful. I was like, “Wow, this is crazy.” This reminds me of the stuff I used to do in consulting, where companies paid us millions of dollars and just seeing how she thought was just very attractive. I think another very good trait is founders that are able to attract top talent. As you guys know, the market is crazy. Being able to attract people from top high-growth startups or Fortune 500 companies is definitely something that can help companies stand out I would say.

Maria Velissaris

Founder fit is really important to us. I love a founder who is inventing something, they were a doctor for 20 years, and they were like, “If we just did this, I think we could get better results or something like that.” I love a great product founder fit. I think it’s really important. It’s really compelling that they uniquely understand the problem that they’re trying to solve. I also think it’s really important for founders to understand and have awareness of their weaknesses and their strengths. Like what De’Havia said, surround themselves with the necessary talent to fill in those gaps. I don’t need you to know all of the answers and to be able to solve everything. But what I do need you to do is hire the right people to understand where your gaps are in work to make sure that you can fill those gaps. Leadership is really important. And until I have to believe that you can lead a team that you have to be someone that can inspire people to work for you. Also, the third most important thing is transparency and honesty. You don’t know how many times that people want to be optimistic and overly ambitious, but there’s a line that you don’t want to cross and that’s a line that goes into being deceitful or not fully transparent. You want to make sure that when you’re approaching us all we’re going off of what you’re giving us in the data. Make sure your data is accurate. Make sure those market sizes are real, make sure your total addressable market makes sense. Because we’re relying on you for some of this information. I just want to make sure that if you’re saying we have 20 contracts, I don’t want somebody’s 20 contracts of ROIs that we’re kind of handing out. If you have a logo on that slide that says we have partnerships, you should have those partnerships. No, if you’re in talks, there’s no contract, there’s no revenue so please make sure you’re representing your contracts, your materials, everything, honestly and correctly.

William Leonard

I think that’s all really insightful advice. One trait that I look for is adversity, right? We were talking to a lot of founders who may have built their startup in 2019. Obviously, 2020 was a down year for a lot of people. Everybody’s plan got thrown out the window. You have to pivot. You have to think on your feet and you have to be pretty agile in the face of adversity. I had a founder come to me in this place, and he said, “William sales were down in 2020. But here’s how you counteract that. Here’s our plan of action to get back to this threshold of sales. And here’s how we executed that plan of action.” I think that really shows a lot about the leadership style of a founder in being able to really navigate adversity when that’s what you’re facing on a daily basis as a founder. Putting out constant fires, constant adversity, constant struggles. But like you all said, having a strong team around, being able to make decisions, concisely is really going to help you enhance that leadership style and continue to grow the business. Really great input from you all there.

Vernon Lee Jr

And if I could just add to that point. Because some founders may be looking and saying, “Oh, well, I don’t have the capital., I’m trying to get capital from you guys to hire the right team members.” There are other ways you could do it by having a really good solid advisory board. And that’s something I also recommend. Advisory board members can be deep subject matter experts in that particular industry or other areas, where they want to help founders, and you can work some type of equity deal as an advisory board member, but I’m sure a lot of founders may be saying, “Hey, I can’t afford to hire great people.” But oftentimes, a capital-efficient way to do that is to find a good advisory board.

William Leonard

I agree with that. And you think about a lot of the companies that our audience today is pre-seed companies. The funds may not be there. But you have to think about how can you hire contract tech talent. You could put somebody on a three-month trial, put them on a specific project, see their execution, and then maybe bring them on another three-month or six-month project. Things like that are really kind of efficient when you think about hiring talent and being able to see a plethora of talent at the early stage without making that full-time commitment yet. That’s a really unique insight they’re burning. I guess the next point I want to pivot to is we’ve interacted with a lot of founders in terms of investments. When you first make an investment in a team and a founder, they’re likely going to be different a year from then. You’re going to see that growth trajectory, they’re going to be doing things that are more essential to the business. I’m curious as to what are some of you all’s favorite Founder Do’s? What are their mannerisms, their traits that are saying, “Okay, we’re excited to see where x leader is gonna lead this company.” I’ll kind of kick it off here. A founder Do that I really enjoy is, I think Vernon touched on this earlier, was acknowledging the competitive landscape and being hyper-aware of the core differences of your competitors business model, their go-to-market strategy, how your product is differentiated, and simply not just downplaying the competition. Because when you do that, that shows an investor that you’re kind of being lazy, right? You think that you’re the first one to the market but you’re likely not. But if even if you are, you have to always be on your feet, thinking, what is the competition? What is our blind spot? Those types of things are really my favorite Founder Do-s in terms of being hyper-aware of your weaknesses and your strengths as a team? What are some of your favorite Founder Do-s?

Maria Velissaris

Communication. I don’t like when we don’t know what’s going on. We have information rights, we sign all these things in our contracts. And then sometimes we’ll give you a check and then you know, it’s five months later, and where are you? We really like communication. We’re very active. I meet with a lot of my founders, even weekly, to check in with them, if not monthly, because the more you communicate with your investors, the more we can help you, the more we can understand what you’re going through and resource help you hire, help you do analytics projects. We have teams of whole people that just work doing projects for a portfolio company. And we won’t know what your needs are if you don’t communicate with us. Those quarterly updates are really important, whether somebody has invested in you or not. That’s also how I keep in touch with founders that I haven’t invested in yet and that I want to track. In those quarterly reports, there was actually a founder here in Atlanta who had reached out to me three years before, and I wasn’t ready to invest. She showed me her progress over two years quarterly reports are great. I got to see that she can build. I got to see that she could deliver and follow through on her milestones. And so after two years, we made that investment because we understood that she was a founder that we could trust to communicate with and that she can get the results that we were looking for. I think it’s really important to maintain communication with those who have invested very importantly, but also those who haven’t yet.

William Leonard

To kind of pivot off of that, Maria, I think that is one of the unknown gems out there. Like if an investor is passing on you at the moment, or it’s not a pass, but it’s more of nurture or a “wait and see”, keeping that investor in a loop is one of the most important things. That’s actually how we made one of our investments here at Valor. They were a little early for us. But we stayed in touch on a monthly basis, they sent updates, they sent carta information, we followed each other on Twitter, which is a unique medium as well, but we were able to keep that communication going. When you’re working with an early-stage founder, Maria, how do you determine that communication cadence? Is it something that’s kind of more on your principal or their principal? Or is it more so just what’s best for the team here? Is there a standard type of communication cadence that you prefer?

Maria Velissaris

It usually comes from the bounder side. I usually say, “Okay, you’re too early but I still want to track you.” Then that means send me an update quarterly, or when you have news, I don’t need you to check in just to be checking in and tell me about your summer plans. I want to know that you just have a new partnership, you’ve just hit a new milestone with your customer acquisition, or you’ve gone into a new channel. If you have really relevant updates, that’s great, if not, a quarterly check-in on your progress is good, too.

Vernon Lee Jr

Definitely. I know there have been a number of Do-s, but just for the audience, just to double or triple down on this. There’s some founders that are doing monthly updates, either investors or advisor that goes out on a bulleted, quick update, here’s what we accomplished last month, here are some things we may have missed on. The minimum quarterly, but there’s some that go out monthly that I like. The ones that I really liked, whatever the template is that you’re using, once the template is set up, I really like to see that progress. Because we’re not necessarily speaking directly, or meeting, to me, I feel like I’m so connected to the founder by getting those monthly updates. And typically, the ones that I really like, will actually have an ask, it’ll say to the advisors and investors, and in my partners, we may not have made an investment but we will make an intro based on, “Hey, we’re looking for a new head of sales.” Or, hey, we really like an intro to whoever I mean, for the ones that we think could get there, but it’s just not a fit for us at the moment, we may actually take action on that. Again, communication, the monthly email updates, are effective for me to stay engaged.

De’Havia Stewart

In our team, as of today, we have around 60 portfolio companies. It’s a lot of companies, and it’s hard to manage when it gets to that amount. And so internally, we decide which companies would be high touch or low touch depending on where they are in their lifecycle, and what type of assistance that they need. And then also considering our investment dollars and opportunities for ownership. But as others have mentioned, we try to stay close by investor updates, but we hope to have at least a quarterly meeting because the market is crazy right now and a lot of companies are being pre-emptive early. We don’t want to like lose out on the following on but also just trying to make sure that we are providing value. We have a dedicated value creation team that can assist with finding a key hire. Also partnership introductions, and like other go-to-market initiatives. We at least try to stay close and stay up to date by having a quarterly meeting.

William Leonard

Awesome. I want to know what each of you is excited about. As you look at the investments that you’ve made, let’s say this year, I really want this to be more of a personal answer. We discussed a lot about your funds, themes, your thesis, you know where their scope is, but I think it’s imperative for our audience today to get insight into you all the judges through the lens of individuality. If you’ve just done an investment that you can share about, that’d be great, or just as a particular space that you’ve invested in recently this year, just to let our founders see what energizes you all each day? What gets you up in the morning?

Vernon Lee Jr

There are two companies we’ve invested in. One is a FinTech opportunity and the other one is a voice AI. With the FinTech opportunity, it’s a company that takes prepaid or unused cellular airtime and converts it to a digital currency that sits on a theory and blockchain. We think that’s really exciting. I’m really excited about it, because it gets us some exposure in the FinTech space, particularly for the unbanked and underbanked. There’s just a huge opportunity there in terms of the total addressable market, and using that as a source for banking. We’re excited about that one. The other one is a company called Yobe that provides that algorithm at the edge we all know, especially with COVID, and other reasons, to touch things, how we’re trying to minimize that as much as possible. Voice recognition, and human speech communication versus having to speak very slowly, when any particular device to get the device to operate or execute, and do what you want, this algorithm really, really is cutting-edge. We’re excited about that. But the thing I get to also get excited about which we haven’t made an investment yet, but things that take unstructured data. We look at both. We evaluate opportunities, both from a consumer-facing standpoint, and enterprise perspective. And those metrics are a little bit different when we look at the problem being solved. But we haven’t made an investment in this space yet but unstructured data, there are so many legacy systems that are out there from so many companies were really opportunities that could take unstructured data and make it in a more structured way to be able to make better decision making. Some of these companies are saying our customer data, client data, they’re just not actually in any way. That’s an area that we haven’t made an investment yet but are excited about.

Maria Velissaris

For us, digital health is really taken off post-COVID. There’s a lot to see. We’re really excited about the innovations in digital health. And as it relates to women’s health, especially maternal care, some of the companies that we’ve invested in this year, we’re helping to mitigate bad outcomes for black mothers who are dying at three to four times the rate of white women. And in areas like New Jersey and New York, black moms die at 7 to 10 times the rate. This is a national crisis. We’re really excited about funding and backing companies that are trying to create different types of care platforms for this vulnerable population. Another opportunity that we have in women’s healthcare is to invest in new categories that haven’t been created yet. When we were saying, there’s always competition out there, yes, but in women’s healthcare, no one’s been investing in it really for the last 60 years. There is an opportunity to create new categories and one of those is actually sourced from the De’Havia. It was a company called Ruby Love that does period underwear and period apparel. That’s a new category. We’re excited to kind of have a horse in that race as that category continues to grow.

De’Havia Stewart

An area that I’m really excited about is retail technology. When I worked in consulting, I had a lot of CPG and retail clients. I discovered that when companies come to pitch to us, the companies that get me the most excited are like the ones in the retail space, mainly because they’re usually solving problems that my clients face when I worked in consulting. We made an investment that’s kind of in retail technology into a company that is actually based out of Atlanta. It’s a company called Cloverly. It kind of sits at the intersection of ESG and also retail technology. Essentially, it’s in API verse that enables B2C brands to offset their carbon emissions. It’s really cool because it’s very similar to like a firm where it’s embedded into the checkout. I thought that was like a really cool, go-to-market strategy. Another company that I’m really excited about in our portfolio is a company called QuickNode, it’s a blockchain startup. I guess the way I like to explain it is blockchain is very complicated. Early on, like in the early 2000s, these platforms were built utilizing physical servers, and the barriers to entry were really high back then, and then after that these platforms are built on the cloud. And right now, these platforms are built on the blockchain. Quick notice kind of like AWS ADF, the cloud with node to the blockchain.  Those are a few companies that we are excited about.

William Leonard

That’s interesting. Vernon is really keen on FinTech and voice AI thinks taking unstructured data and making it more structured for replacing those antiquated legacy systems. Maria, you’re really focused on digital health, women’s health care. De’Havia retail technology. Maria, I have a question for you. You mentioned something interesting in terms of building in new categories. I think as a pre-seed founder, and maybe even a first-time pre-seed founder, how do you think about building in a new category like that where there’s not a lot of evidence that market adoption may be there in the snap of a finger, how, as a pre-seed founder, can you think about building in a new category and inverting into De’avia, feel free to jump in, if y’all have insights, as well, but I think this would be something interesting for our founders to listen to.

Maria Velissaris

Well, I can tell you as to when I was a pre-seed founder, how I built something. It’s not always that it doesn’t have to exist yet, you can also take something that exists and use it in a new market or a new channel. And that’s how you want to think about if it worked in that channel, maybe it hasn’t been proven in yours, but it could work. For instance, when I was in college, I started an online shipping and storage company for college students, U-haul already existed, there were a lot of shipping companies out there, but none that focus on the college market. College people moved in and out every four years. Somebody small like me five foot one, trying to haul my whole dorm room back and forth. That was really hard. And so what we did was we founded a company for college students, and it ended up becoming larger. U-haul eventually bought it and they run it but it wasn’t anything new, it was just innovation in an old category. To Vernon’s point, that’s what you have the opportunity to see is think about how to innovate in an area that has a gap, or that could use leverage another technology from another sector. I think it comes from consulting. I understand opportunities and gaps and how to fill those gaps. When we’re looking for companies in our portfolio, we’re looking for gap fillers for other companies sometimes. We don’t need to always invest in a company that’s going to make $5 billion, sometimes we can get a really good exit, and invest early on a company that’s going to exit at $400 million. Because we understand what gap they’re filling in a larger, bigger platform. That is kind of an approach that we take. When you’re starting your business are pre-seed really understand who the acquirer is going to be. And that might help inform how you build. Because if you think about who’s going to acquire you at the end, then you might not be able to integrate with them. And so there’s a lot of things that you might want to start doing now to make you a better a more attractive proposition for a potential acquirer later.

William Leonard

That’s really interesting. Thinking in starting your company with the end in mind, thinking about your potential acquirer, I think the right integration, their blind spot. Okay, that’s interesting. That’s a really cool insight.

Maria Velissaris

I mean, as investors, we want them to get bought, right? That’s what we get paid. Don’t you want to run your business by yourself for the next 20 years? I’m not the one for you, because we’re looking for exits.

William Leonard

Right? Exactly.

Vernon Lee Jr

That’s such an important differentiation in terms of there are some amazing small businesses that will grow to be very successful, but they’re not VC-type opportunities. And so just doubling up again, on that point, there are certain companies that are built for high growth and exit. And that also goes to the founder’s understanding of how we’re all beholden to our shareholders in LPs. And the only way that happens is through an exit and through acquisition to IPO, spec, whatever the exit opportunity is, but with that understanding to building something with that in mind, to get to a Series A and Series B, and again, beyond. It’s just hugely important. Yes, for founders that are watching this and engaging, and having that mindset and understanding that we need to be able to get our money back so we can get it back to our shareholders and LPs is is very significant. Also, I noticed that it seems like all of our backgrounds are in consulting because I was a consultant at PricewaterhouseCoopers for a number of years. 

Maria Velissaris

And I’m from Booz. I worked at Booz.

William Leonard

Awesome. As we wrap up this conversation, we’ve talked a lot about VC. But I want to get more into you. What are some of your personal passions? What are you doing on the weekends when you’re not out here, looking at deals when you’re not speaking with founders? What are you doing with your families, your friends, on the weekends and things like that?

Vernon Lee Jr

I do a lot of community things, or mentoring. Like a lot of it through my fraternity, Omega Psi Phi Fraternity, Inc. We do a lot of mentoring, particularly around black males. I co-chair our scholarship, an endowment at my church, and Baptist Church. We’ve got a lot of uptakes with online views. Now, that’s awesome. Because I need my brain to focus on something different. It shifts. And I think it makes me frustrated when I’m really looking at entrepreneurs and investors where I can focus on other things. I co-founded a nonprofit called the Hampton Roads Youth Foundation with a good friend of mine I grew up with. We do free football camps and bring a bunch of NFL players back to the Hampton Roads, 757 areas. I do a lot but I spend a lot of time on community service-oriented things, and definitely family time is absolutely at the top of the list.

Maria Velissaris

I’m a recent transplant to Atlanta. I’ve been exploring the city during the weekends and playing a lot of tennis because the weather’s really nice in Atlanta. But outside of that, we do a lot with education and giving. You’re working with students and underserved communities. Because I believe that the only reason we’re all here is because of the education that we have and the types of professional opportunities that we have received. And so trying to make sure that more people of color have access to those opportunities is the very top of mind and a place where we spend a lot of time and donate a lot of money.

De’Havia Stewart

I guess some of my personal hobbies, I really like doing creative things. I like photography. I’ve never got a return on investment on my camera. But yeah, I have like this Canon DSLR that I utilize just taking pictures. I like graphic design and those sorts of things. And other than that, as I mentioned earlier, I graduated from FAMU.  I majored in accounting and undergrad. Sometimes I mentored students that were in the organizations that I was in. I was a part of NABA.  I teach students how to do individual taxes, usually during the spring semester. And then beyond that, in terms of venture capital, I’m a part of two nonprofit organizations, HBCU.VC and BLK Foundation, where I’m on their investment committee. We’re helping college students, black and brown college students, get more experience with investing in venture capital. But then also on the flip side, helping more black and brown founders get access to capital at the seed stage.

William Leonard

Awesome. I think something rooted in there’s education. And that’s so important, as underrepresented individuals in the country to have that education. And lastly, before we end the call here, what are the best ways that founders can get in touch with you or have they heard your thesis is aligned with their startup? What is the best way to pitch you all in getting contact?

De’Havia Stewart

I think LinkedIn. LinkedIn works for me. 

Maria Velissaris

LinkedIn, email.

Vernon Lee Jr

I have to admit, I’m not as good on LinkedIn. I’ve got LinkedIn. I’m probably a little bit slower on my LinkedIn messages. But email was is definitely best for me. Again, if it’s the right fit, my emails vernon@themarathonfund.com.

William Leonard

Perfect. Well, again, thank you all for your leadership, your feedback, your insights, and I think our founders from this showcase, previous showcases, future showcases are going to look on this episode and find a lot of value. You all are amazing. Thank you for your time so much this week, and we really appreciate you all and what you’re doing in this ecosystem. Cheers.

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.