Why I’m a Venture Capitalist, with Mucker’s Monique Villa

Mucker Capital‘s Monique Villa is pretty far from what we tend to think about when we picture a venture capitalist – the older white man who graduated from a prestigious university and went on to get his MBA. She’s none of those things, but maybe that difference in background and perspective gives her an advantage when evaluating startups to work with. On today’s show, Monique shares why she loves being a venture capitalist – and some of the parts of the job that aren’t her favorite.

Transcript

Voiceover: Welcome to First Check, a podcast so you can learn how to be the next great venture capitalist or angel investor.

You’ve seen the Uber’s, Google’s, and Pendo’s of the world; the 10 X to 100 X returns. And you want to know how you can get in on the action. As a partner at Cofounders Capital, Host of First Check, Tim McLoughlin has invested over $43 million in startups. And on this podcast, he’s going to share with you what works and what doesn’t so you can be ready to write your first check.

On each episode, Tim brings on investors and founders so they can tell you the ups and downs of venture capital and what lessons they’ve learned along the way.

Today’s guest is Monique Villa, Venture Capitalist at Mucker Capital in Nashville Tennessee. Monique is pretty far from what we tend to think about when we picture a venture capitalist – the older white man who graduated from a prestigious university and went on to get his MBA. She’s none of those things, but might that gives her an advantage when evaluating startups to work with. On today’s show, Monique shares her unique perspective on all things investing and why she absolutely loves being a venture capitalist.

Here’s the host of First Check, Tim McLoughlin. 

Tim McLoughlin:  Monique, how you doing?

Monique Villa: Doing well. Really can’t complain. How are you doing?

Tim McLoughlin: I’m also doing well and, and I’d like to complain. No one would listen. So Monique, why don’t you just tell us a little bit about Mucker and the investment strategy and what you guys do.

Monique Villa: Yeah. And first of all, thank you for, thank you for having me and, and thank you for welcoming Mucker into this conversation.

We’re an early stage venture fund. We’ve been around for a decade now, which is hard to believe. And we are focused entirely on early stage tech; so Pre-Seed, Seed, and Series-A.

And we have really designed our fund to be flexible and, and to meet the needs of people who have unique insights into market opportunities as it relates to tech. So, you know, when people ask what we invest in, we give the very frustrating answer of software and software-enabled companies. Both, you know, enterprise and, and consumer-facing, super diverse portfolio across industries.

And that’s typically not satisfying as much to people than giving really clear directives of Over Healthcare Investors, Over FinTech investors. It helps to narrow the pool. But the way that we really narrow our own lens is really around how unique the insight is of the founders starting the company and in what capacity are they looking to build a really big business one day.

And it’s aligning those types of objectives where we have a really, very close knit portfolio that when our founders see one another, they might be operating in different industries, but they have more in common than not. So that’s how I, I like to think about, you know, what really unifies the way that we invest in, in what we’re looking for.

Tim McLoughlin: Yeah, no, that’s, that’s great. And, you know, I think there’s a lot of overlaps with what we do at Cofounders Capital. I know you and I are working hard to get in a deal together here soon. So.

Monique Villa: Yes we are.

Tim McLoughlin: We’ll keep, we’ll keep working on that. So. Monique, I read, I read one of your articles that you wrote.  It was called, “Hi There, I’m a VC and Here’s Why,” and it was an awesome, awesome read. And to our audience, go check it out on LinkedIn and–

Monique Villa: Oh, thank you.

Tim McLoughlin: And take a look at it. But, but why don’t you sum up a little bit about why you are a VC and that’ll give us a little bit of your background too.

Monique Villa: Yeah. So, I don’t come from a background of, you know, a family of entrepreneurs, a family of VC’s. I didn’t know that venture capital existed when I graduated from college; let alone during college. You know, I see people that are getting internships in undergrad and following VC’s and startups on Twitter. That was not part of my vocabulary when I was in school.

I was a Visual Media major and I was really interested in communications. But, post-college, and in one of my first full-time roles, I stumbled upon VC because I was working with startups and many of our companies were seeking investment from VC’s. And I remember very vividly, the first couple of times I opened up a VC website and was completely lost.

And the more I dug in and eventually ended up joining a, a venture firm back in 2013, I found that venture capital marries all of my favorite capacities in which I like to support founders and work with startups; getting to be in the background, getting to be on the constant search for resources and little tidbits, whether it’s finding talent or identifying a potential customer or partnership opportunity.

And much of the work that I’d say a lot of consultants get to do. You know, but on the venture side, you’re also helping to equip them with access to capital, which then ultimately creates jobs. And that’s something I’m really passionate about as well. From an economic development standpoint, I really am long on the private sector as a, as a way to facilitate change and in society.

And so, if you put all of those things together, and tie it with a bow of, you know, getting to have the conversation with people every day of, “Hey, what could the future look like?  What would that look like? What, what types of products or services could we dream up and then try and go and do it?” I just think it’s the greatest, greatest privilege in the world to, to be able to do this work.

Tim McLoughlin: Yeah. No, that’s, that’s great. It’s a lot about what inspires me. And sometimes when you have those tough days, you got to remind yourself why you love what you do, right? And so when I read your article, it was, it was like, “Oh yes! Let me get back to this is why I love doing what I do.” So.

Monique Villa: And those tough days are real.

Tim McLoughlin: Yeah.

Monique Villa: And I think it’s an underappreciated piece when people say, “Hey, I want to go invest. I want to be a VC.” You don’t know quite how tough some of the days will be.

Tim McLoughlin: This was a question I was going to save for later, but I guess now’s the appropriate time. I wanted to know. So all these great things about why you want to VC. Tell me what the, what you think, maybe I’ll share some of the same thoughts, but what do you think the toughest parts about being a venture capitalist and an investor are?

Monique Villa: Yeah, I mean, I think it depends on in what capacity you’re showing up as an investor for your founders. I think there are investors that are more passive. And that can work out great. And it works great for both sides, right? It can work well for the founders. They need some capital, someone doesn’t really bother them much, they’re just on the cap table, friendly and not detracting, right?

And, that’s great. And then, you know, sometimes I’d say that founders are really looking for more active investors. And, and with that comes, you know, more time and attention. And, and I think also, a personal investment of, of energy into those companies. And so, you know, you can have a company that you believed in since the minute you first spoke with that founder; fully on board, fully emotionally invested in, in the success of this company. And there’s going to be a lot of road bumps along the way. And I think, you know, one of the most crushing moments can be contending with things like market timing.

Everything can be done right, the founders could be just right, the team could be just right. You could have this alchemy that’s cookie cutter, perfect, textbook everything, but maybe wrong market timing and sort of the soul crushing that comes along with coming to terms with that. And maybe having to pack up and go home.

You know, I think that, that’s one example, but it does feel like a, a real personal loss because you have this dream. And you set out in, in pursuit of the dream. I always like to refer to, you know, Don Quixote and chasing, you know, windmills and things like that. Many founders are like that, right?

Like they’re, they’re chasing windmills, they’re taking the punches, they’re defying the odds. And then some things you can’t defy and no matter how hard you try. And so I think that that’s probably a bigger example. There’s a lot of, you know, day to day that can also be really hard and lots of fires to put out. But I think ultimately there’s these let downs that you have to take in stride.

Tim McLoughlin: Sure. I think obviously there’s been a lot of market timing that’s happened in the past year for good or bad companies, right? Which, at no fault of the other founders, nobody knew that there would be a downturn mixed with a global pandemic.

It really changed a lot of businesses and some for good and some for worse. So I think it, that resonates more than ever. I also think from a, from someone obviously, Mucker, you personally and Mucker have a great reputation for being very active and helpful with your companies. I think Cofounders likes to pride itself on that too. But I’d say the more active you are, that means the more you build those personal relationships and work with the companies. The higher the highs and the lower the lows as companies go through that rollercoaster. What do you think?

Monique Villa: Absolutely. Yeah. I mean, everything from, we’ve had founders who have lost loved ones during COVID. And I think knowing, having those relationships, we meet with our founders every week, in some cases, especially our pre-seed companies. And so, when you’re talking every Thursday at 3:00 PM with someone, and then in email threads throughout the week, and then they’re going through something personal, that’s incredibly hard. Or, you know, and then turning around and having to dust off and, and keep pushing forward.

And in the midst of a pandemic, you definitely are very personally invested in the success of those people. And then you work with them for years, right? Like you’re signing up for potentially a decade-long plus, formal, working relationship, Not to mention the personal relationship side.

We also have, at this point, you know, having been around for a decade, we have repeat founders. We have founders that have come back with their second company that we’re backing. And, so we, we saw them through their first company, we were right there with them, and then now they’re back for round two.

And, and you start the climb again. And so that, that’s a really kind of under-appreciated aspect I think from the day-to-day standpoint; when from the outside people see you talking on podcasts, or tweeting or maybe suffering from too many emails, but, you know, like, that’s all the superficial stuff. It’s, it’s the real stuff that hits home.

Tim McLoughlin: Yeah, no, definitely. Well, I think, I think one thing that maybe our audience is getting to through this conversation is, you know, there’s different types of investors and you might need to try to understand what you think your involvement level is going to be.

Are you going to be passive? Are you going to be active? And I think most importantly, that’s probably, and you tell me, is I would think setting expectations for the founders before you write the check as to what they want and what you want your involvement level to be.

Monique Villa: Absolutely. And I think really heavily diligencing your investors. I think if someone says, “Hey, I want to be an active investor,” that can be good or bad. I’ve seen examples of, you know, active investors who are just distracting, like completely distracting. We pride ourselves in really trying to limit it to the critical items and not getting in the weeds on every little thing, but saying, “Okay, out of the 500 things you have to do this week, what are the top couple of priorities and how can we help move the needle there?”

We’re not going to keep you on the phone for hours to talk through all the little stuff. That, that will figure itself out over time. But there, you know, I’d say that there are other investors that will say, “Hey, I’m going to go and be active,” and end up being really distracting to the, to the founders.

Highlighting things that aren’t as important or making lots and lots and lots of data requests that aren’t relevant. And I think, you know, the more that founders can go into things a little more skeptical of, of the investors they’re talking to and, and doing some diligence if you’re getting further along. Like, reach out to their founders and, you know, ask, ask to be connected, or just reach out on your own through LinkedIn, email. I’d say that most of the time founders are very happy to give references. And so I, as a founder, definitely recommend leveraging that network of, of peers.

Tim McLoughlin: Yeah, I think, I think some of our best companies, if I had to give characteristics to some of our best entrepreneurs, it’s the ones that did the most diligence on us. And the ones that ask us about other investors they’re thinking about letting onto their cap table. So it sounds like you’ve seen the same thing.

Monique Villa: Oh yeah. It’s huge. It’s, it’s the biggest thing. And I think it’s hard to turn down money, you know, when someone’s saying, “Hey. Here’s a check. Here are dollar signs.” It’s really hard to do that, but it’s much harder to take that money and, and potentially derail your companies at some point at,in the next couple of years. So, choose your battles.

Tim McLoughlin: Yup. Yeah, no, definitely for sure. And I’d say, I’d say that one of the best things you can do is maybe check out a reference from either a founder or an investor where things didn’t work out. You said that you’ve invested in founders multiple times. I think that the most you can say about that person is that there’s an investor that invested maybe when things didn’t work out great. But you’re ready to write the check into their next business. I think that would probably say a lot about that founder.

Monique Villa: Yeah. Yeah, I can’t agree more.

Tim McLoughlin: Yeah. So, you talked about, you know, having that conversation, that difficult conversation with some founders when the market trends aren’t going in the right direction. You have to say, basically you have to say no. There, it’s very rare when an entrepreneur comes and says to you, “You know, this just isn’t working. We need to shut it down.” It’s more likely, “Hey, that big sale’s right around the corner. Things are really about to turn around.” How do you stay successful with what you’re doing, building relationships where you have to say no so much more than you get to say yes to deals like that?

Monique Villa: Yeah. I mean, I think, I honestly think it’s a journey. I imagine that you feel much of the same way and, and you’ve been at this for many years. It’s, it’s a real journey. Every day is a new challenge to find that balance and to figure out the right way to deliver news, the right way to communicate something.  I think at the end of the day, we’re dealing with so many different personality types and founders are dealing with so many personality types on the investor side.

So, you know, I think a balance of empathy and transparency is something that you really can’t go wrong with. Someone may or may not react well to it, but at the same time, I think more often than not, we’ll come around and, and see it for what it is.

Tim McLoughlin: Yep.

Monique Villa: And that it’s, you know, this is someone trying to be transparent and also empathize with your situation at a given point in time. I do think that acknowledging strengths and being transparent about that is also important. I think the more VC’s can say, “I have experience with X, Y, and Z,” or “I don’t have experience with X, Y, and Z, but I have seen these instances and how those have played out and have learned from them.” You know, I think, the more you can leverage the visibility that VC’s have in the industry, you know, in, in the market. We’re seeing literally thousands of deals a year with a team of just six of us.

And so, you know, with that kind of visibility, we’re data gathering all day long. And that helps inform the way that we might provide feedback to our portfolio. It, it informs how we might provide feedback to people who are reaching out to us. We also like to say, at least for people that we’re engaging with, you know, as potential deals, we like to say, “Hey, here’s, here’s the reasons why we’re, we’re not in, but also we’re often wrong. And it doesn’t mean that we’re not cheering you on. We are. And we hope you prove us wrong. But as of today, based on the information we have, we believe X, Y, and Z about the market.” And we’re not going to say, “Hey, we told you so,” if it doesn’t go well. Like, we expect you to say that to us more often than not.

But, you know, again, like, we’re all just human and trying to do what we can. And working with the data that we have at hand to make decisions hopefully as quickly and efficiently as, as we can. But again, a lot of it has to do with timing and we just don’t have a crystal ball.

Tim McLoughlin: Yeah. And, and I think the X, Y, and Z of why we didn’t invest and being transparent, but also talking about the strengths, I think is really important and it, it’s very quick and easy to just say, “No, we’re not investing at this time.” But I’d say it’s paid off over and over again, spending that little extra time being fully transparent or having an extra call with a founder because you don’t burn a bridge. You know, they, they want to talk to you again. They want to think about the feedback and maybe come back to you for their next business or further down the line when timing is right.

Monique Villa: Absolutely. Yeah. I, I couldn’t agree more. I think I have some window of time each week that I set aside to write those emails. And it’s my least favorite part of the week because I love being a “yes person.”

And I love being able to say yes to everybody, but we can’t. And so, I always, you know, I avoid it so, like I resist it. I’ll say, “Well, first I need to go get a glass of water and then I can put it down and do this,” “Oh, maybe I should get a snack.” And then finally I sit down and I start writing them one by one.

And like, actually, there was a past email I sent a couple of weeks ago. And I’m not exaggerating. I literally cried while I wrote it. It was just because I’ve never done that before, but it was the perfect company. It just did not align. I think, you know, we’ll hopefully invest in the next round, but it was the most attached I think I’ve ever been to a deal. And, had to make the decision that it wasn’t the right time.

And, literally welled up and cried while I wrote this at midnight. And I thought, “Do I get some sort of badge now that I’ve cried writing a passing? Do I advance to the next level?”

Tim McLoughlin:  It’s on your VC uh, your VC bingo card, right? You get to check that one off now that–

Monique Villa: Yeah.

Tim McLoughlin: That you’ve been there and done that.

Monique Villa: Yeah. But true story. That happened sometime around Thanksgiving.

Tim McLoughlin: And I think, I think one of the, one of the points here too is you’ve mentioned just, you know, for your, your thesis and your timing and where you’re at with your fund. And it, it wasn’t, it just didn’t align.

And I think that’s one of the big differences that people need to understand, that entrepreneurs need to understand between venture capitalists, or institutional investors, and angel investors, is it’s not their capital, right? For the VC’s, it’s not their capital. They’ve, they’ve outlined a thesis like you said.

And, I know explaining that to the entrepreneurs sometimes, it doesn’t make them feel a whole lot better even if the answer is no.

Monique Villa: Yeah, it’s a super unsatisfying and entirely realistic answer. But you know, at the end of the day, we are providing a service to our LP’s and there are very specific frameworks that we’re operating within.

And so, sometimes for us, especially because we have this multi-stage approach at the early stage, that a pre-seed deal could turn into a seed deal, or even a series-A deal down the line. So, we might get to know that founder, you know, when they’re more in the pre-seed stage and it could be better timing for us to hop in maybe a year or two from now.

And so, with that in mind, I really do feel hopeful sometimes when it’s not aligning at the pre-seed. But nothing’s guaranteed and there’s a lot of competition in the market. So, then I have to go spend the next two years earning their trust and, and building that relationship so that we can, we can kind of fight for our lunch. And, and hopefully, they’ll, they’ll bring us along in a future round.

Tim McLoughlin: Well, one of the things I’m doing with this podcast is bringing back entrepreneurs that we’ve  said no to or passed on before, previously, just to make sure that they’re not super, super angry with me, or they can get it all off their chest so I’ll have a chance in that next round.

Monique Villa: Like, “Hey, good to have you on my podcast! Come see…”

Tim McLoughlin: You know I really like you if I had you on the podcast, right?

Monique Villa: Brilliant. Yeah, I love it.

Tim McLoughlin: So, so you, one of the things that you wrote about was how long it takes to show that you’re a good investor. You know, a decade or more to show that you’re good at what you do, but you can show pretty quickly that you’re not good at what you do.

What steps are you taking right now to, I guess, avoid the, “I’m not good at this investing thing,” and remain hopeful for the, “I can prove down the line that I am good at what I do.”

Monique Villa: Yeah. And, and to provide a little more context, I’m now at my third venture fund since 2013. And so I’ve had the great fortune of, of having a front row seat to other great investors, other general  managing partners who brought me onto the team, and also I’d say, really self-examined and, and we’re aware of this.

You know, I think there are a lot of investors that can look successful because they’re announcing a lot of deals and are super active and doing lots of blog posts or whatever. And people think, “Wow, they’re great investors.” But as you and I know, this is a, really, this is a patient, capital, long game. You know, a 10 year fund is a decade.

And so when you’re signing up for something, think about like, what is your life gonna look like in the next 10 years? Who knows? And so when you’re bringing in companies, you can write checks all day long. But you have no idea if you’re any good at your job in terms of returning capital to your LP’s, helping your founders get great exits or great, you know, great landing places for their teams, whatever form that might take.

And, you know, I think on the day-to-day side of things, especially in 2020, where I’ve been stuck at home and kind of forced to, to stay put, I’ve been really proactively going the self-examination route and saying, “Okay, what are some low hanging fruit things I could do that would make me more effective in my, in my job today?” “In support of founders, what are some simple hacks, workflow things, or tools I could put together internally.”

You know, “What are ways that I could be more present when I’m in meetings rather than distracted with 10,000 other things.” You know, really, I think that the time and attention piece is critical. There’s also a massive self-education element.

When you think about upskilling, we talk about future work and upskilling. You know, VC’s have to upskill every day. There’s new information coming out on different industries, there’s new funding activity, there’s, there’s new technology coming out every day. And so, technology and innovation happens really quickly.

But the real lasting impacts and feedback loop is very long. And so, I think the biggest opportunity is to say, “Look, I am a humble learner showing up every day. I’m going to do what I can to be the best version of myself for people. I’m going to get sleep. I’m going to be present in meetings. I’m going to take good notes. I’m going to be organized. And I’m going to learn from people who, who know so much more than I do about different industries and also about this industry. And I’m going to show up and do that every day.” And I think I’ll find out at some point in the next decade if I’m any good at this because we will all find out. But in the meantime, I’m very aware that that I don’t yet know the answer to that question.

Tim McLoughlin: Yeah, well, that’s part of that self-awareness. That’s great. I thought it was very interesting because I often think the, the same thing,  right? “We’ll see in 10 years whether or not this was a good idea.”

Monique Villa: Yeah. People will say, “Hey, congrats, saw that–” I’m like, “Thanks, we’re–”

Tim McLoughlin: Any, anyone could have written the check, right? It’s, it’s getting money back now.

Monique Villa: That’s, I made the Seinfeld reference because I remember that, the part where Jerry has like a car reservation and he’s so mad because they didn’t reserve the car and he’s like, “Anyone could take reservations, but you have to hold the reservation.”

Tim McLoughlin: That’s right.

Monique Villa: And that’s my job! Like anyone could just write checks, but not everyone can actually make, you know, make money.

Tim McLoughlin: “That’s what a reservation is.” Right. One thing, one thing I thought was interesting, kind of switching gears here, is you talked about the democratization of, of capital, right? Of Investments into private capital, both for the companies, but also for investors being able to get into that asset class.

And I just think, you know, if you look at the continuum maybe of crowdfunding, angel investing, venture capital. You know, is there any competition there with that democratization piece? Like, does venture capital have an advantage now because of the resources it’s able to pull? What, what is your goal, I guess, over the next, because I know that’s important to you, over the next five or 10 years?

Monique Villa: Yeah. I think, you know, one thing, if we think about founders in the private market, being the hero in the story, you know, founders win when they have options and they have access to the resources they need. And sometimes that can be capital. It doesn’t always have to be. And I think if you’re going the capital route, it’s important to have lots and lots of options.

And I think, you know, venture capital is one of those options. And I think, you know, oftentimes it’s misinterpreted as the option or the only option, or, you know, there’s some, you know, badge of honor if you’re raising venture capital. And I think that that is false. I don’t agree with that. It’s not the right fit for every business.

I think there are plenty of companies that have bootstrapped their way to becoming unicorns. And, I personally love those stories because those are, those are really, like true success stories of, of founders who just grounded out from day one. But, you know, in terms of expanding what capital looks like on the angel’s investor side, the SEC expanding the definition of accreditation  of investors for individuals to be able to write checks, that’s huge.

I think being able to say, “I’ve passed,” I forget the name of the exam, one of my friends is taking it. But, if you could actually take a course, pass an exam, and then be able to start writing angel checks as opposed to, “I am wealthy so I can write angel checks.” That’s going to significantly open the pool of available capital for founders and, and for the types of products and services that get backing.

So we’re going to see better innovation because of that. From the crowdfunding side, being able to say, “Hey, this is really an evolution from Kickstarter and some of these other platforms to say  our customers can also become our investors and they can have a stake in the company and the success of the company.”

So we’re seeing more and more of those coming out. We’re seeing the rolling funds piece where people can essentially, you know, launch their own version of a fund. I think within all of this, there are obviously limitations involved. For any sort of provider of capital, there’s, there’s some form of limitation.

And I think it’s important for founders to understand those dynamics, like what we were talking about with VC, to understand what are the constraints that you’re operating within? If you’re bringing on an investor, how complex or not is your cap table as a result? And, you know, to what extent will this create more legwork or paperwork for you in the future as you’re trying to make decisions for your company? But at the end of the day, this is going to be a net positive for, you know, the broader innovation economy.

Tim McLoughlin: Yeah. And, and back to your original point where it’s some sort of badge of honor to give venture capital. I often have a hard time with founders when I try to tell them that they really do have a great business, but it might not be the right fit for venture capital. Because it seems like it’s something that founders look at as all or nothing.

And so, being able to do a crowdfunding campaign, being able to raise money from angel investors and understand that there are different return expectations among the different classes I think is, is really critical. And just because you don’t become a $150 exit in a– and, you know, maybe you get the exit you’re looking for, you on the majority of the cap table, you are able to put wealth back in your community, and hire dozens of people. That sounds like a successful outcome to me.

Monique Villa: Yeah. Definitions of success are very relative. And I think that’s something I try to figure out in sometimes my first calls with, with founders is, you know, without directly asking the question, but trying to understand what does their version of success look like? So that I can understand if that aligns with what it would look like for us. And if we can get to that sooner in the conversation, we could probably save a lot of time. Because success for them might not align with us. And that doesn’t mean that it’s not success. It just means that it doesn’t fit again with our, our framework we’ve promised our LP’s.

Tim McLoughlin: That’s right. And the venture capitalists have less of, less flexibility around what a definition of success is than the founders. So, while we’re talking about who’s legally allowed to write checks based on whatever the definition of accredited investors are, one of the things you and I have talked about before and have been on panels about is how we change what those folks might look like, right?

And you look at, you didn’t have a background necessarily. You were talking about in college how, you know, the VC lingo or what VC was, was kind of lost on you. I had a hockey training business, which certainly was not a high scale venture-backed kind of company. Yet, here we are, here we are talking about it.

Monique Villa: Here we are.

Tim McLoughlin: And, and one of the things I realized when I started writing a job description for another position at Cofounders was, you know, venture capital experience. Like that’s what I wanted. And it was something I wanted to delete right away because I wanted to open this up.

So we have folks listening that want to be investors. They want to be VCs. How do you think we go ahead? What can those folks do? How do we change? We now on the VC side of the table, change that vicious cycle of you know, white male venture capitalists that got their MBA from certain schools.

Monique Villa: Yeah, and I can’t honestly appreciate this question more than I do. So thank you for asking it.  You know, on paper, I am a half Mexican, non-MBA holding– let’s see, graduated from a state school in California, studied visual media and, did not study, yeah, did not study finance. Oh, by the way, and I’m a woman, so there’s a bunch of things in there. And also I think something that is always top of mind for me is that, you know, looking at my family history, my, my dad spent his teenage years picking cotton in the fields. You know, he did not grow up with money or with access and that sort of thing.

So, I keep that in mind every day I show up for work, is that, you know, my dad was working in the fields and today I’m a venture capitalist. I think that the more people who are thinking about venture capital as a potential career, the more you can double down on your unique story and your unique vantage point into the market, and less, less of a focus on the typical check boxes that people have had to meet for getting these roles in the past.

The more you can lean into your unique insight, the same way we look for that in founders, I think the more there will be a real path for you into this industry. There’s never been more, I’d say, more of this message resonating in the industry than ever before. 2020 does not look like 2013 when I joined. There are more and more points of access, there are more resources out there.

There’s more of a sense of community among the peers of people who are coming up and wanting to work in venture capital. They’re self-organizing, they’re sharing resources, they’re not hogging everything for themselves. I think that was definitely a, a style of yesteryear is, you know, “I’ll keep mine and you keep yours and let’s, let’s stay out of each other’s business.”

Now it’s like, “Hey, let’s hang out every week and talk about what we’re learning.” And so, you know, showing up and, and really being curious, but also I think many of the aspects to VC that you’re doing on the, on the job, you can actually replicate without a fund. You know, you can go and volunteer to help startups.

If you see startups posting, you know, job descriptions, you can go and find talent for them. Like, there’s no barrier to that. You could say, “Hey, who are the startups in my community hiring right now?” Go get there and job descriptions and then go hustle up some talent. If all of a sudden you’re helping recruit talent or figure out customers for startups, and you bring that to any VC that’s hiring and say, “Hey, I’ve been doing this. I have my own database of startups that are early stage. I have a perspective on market opportunities based on my own firsthand experience.” To me, that’s infinitely more interesting than, “I’m another finance degree from another Ivy league who has not been doing these things and is expecting a job.”

I think those, those two things, you know, are, are the roads that diverge in the forest and it’s like, “Okay, they’ll probably, probably be fine.” And then the other is like, “Oh, this person’s unique and has something to say. And if I give them something to do, they’re probably going to do really well at it. And they’re also going to bring a different flavor than if I hired more of a cookie-cutter type of profile for this role.”

Tim McLoughlin: Yeah. That’s great. Alright, Monique. We’re, we’re coming down to the end here. So I’m going to ask you a hypothetical. So, you’re working with Mucker and you have to make an investment. You meet with 10 companies for the first time and you have to write a hundred thousand dollar check into one of the 10 companies, but you only get to ask one question. What’s the question you ask of the companies?

Monique Villa: I love this question because as you know, our work, there’s definitely some psychological elements to it. We’re trying to get in people’s heads in a really short period of time. I’ve been thinking about this, and the one question I would ask is, “What could go wrong?” And it seems pretty harmless, but I’d say that the answer really does vary so much from founder to founder.

And what I’m looking for with that question is the level of self-awareness of the founder and also their understanding of their market that they’re operating within. You know, I think the more thoughtful, North Star-oriented founders will have a couple of layers to the answer to that question. One will be around the market because market is, is everything.

And I think that they would probably lead with that. And then I think second to that, they would probably have something to say about their own potential blind spots as a leader. And, you know, if you put those together, most of the reasons why startups fail would fall into those two categories; the market and, and the leadership. Or, you know, the, the way that the team is built. And there are founder breakups all the time.

There’s, there’s so many, dealing with a lot of egos, maybe they can’t attract talent, maybe they attract the wrong kind of talent. So I think I would be looking for an answer somewhere in that ballpark. And I think, oftentimes founders feel motivated to say, “Oh, nothing’s going to go wrong. This is a rocket ship. We’re going to do great!” like, okay, cool. Nice to meet you. Best of luck.

Tim McLoughlin: Along with every other plan we’ve ever seen.

Monique Villa: Yeah.

Tim McLoughlin: And for some reason they don’t all work out.

Monique Villa: Yeah.

Tim McLoughlin: Well, let me ask you this. Would that question, would the question you asked change if it was a personal check you were writing versus a check out of your fund?

Monique Villa: You know, I think it’s very close to what I would ask personally. However, if I was writing personal checks, I would have a lot more latitude in terms of the types of companies or deals or, you know, things that, that would factor in. So I think the question that I would be even more invested in, if this is my own money is, “Why are you doing this?” And I think from a personal perspective, I really do believe in, in being optimistic about a utopian future that things could somehow be improved, and be in harmony, and in all of the various things that are very idealistic. But, if you have a founder who’s doing this for the right reasons, who’s building the company with a vision beyond their own personal aspirations.

They see this opportunity to build uh, something that’s market defining or transforms people’s day to day in some capacity, provides jobs for people within their own company, or maybe beyond their company. Just making the world a better place, I think I would be really inclined along those altruistic elements.

And some people really want the glory and that’s great too, but I think I would be less inclined if, if this was my own money coming out of my own pocket to say, “Are you doing this for your legacy? Because if so, then amazing, right? Like you’re, you’re probably going to stick it out if things get tough.

If you’re not doing it for a bigger purpose, when things get hard, you’ll probably get bored and move on. And all of the investors are going to be out of their money.

Tim McLoughlin: That’s great. Well that I think sums up a lot of the differences too, between some flexibility around personal questions versus uh, when you’re managing other folks money so.

Monique, this, this was great. Absolutely loved talking about this stuff, could do it for hours, and hopefully we’ll have you back and I know you and I will be collaborating for years to come.

Monique Villa: Yes, we will. And I’m going to come visit you the second things change around here.

Tim McLoughlin: All right, we’ll be ready.

Monique Villa: Thank you for having me.

Tim McLoughlin: Thank you so much.

Monique Villa: Take care.

Tim McLoughlin: Alright, bye.

Voiceover: That was Tim McLoughlin with Monique Villa.  For more on Monique, follow her on Linkedin or visit Mucker.com or BuildinSE.com.

Full Episode Transcript

Monique Villa on Linkedin
Hello! I’m a VC. Here’s Why. (Article by Monique)
BuildinSE.com

First Check is hosted by Cofounders Capital partner Tim McLoughlin, and is a production of Earfluence.

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