Mergelane Blog

Broadening the On-ramp for Women-run Companies

If Your VC Fund Makes You a Pirate, Should You Abandon Ship?

As an entrepreneur and startup investor, I have had many moments of feeling like I am pushing water uphill with a rake. Sometimes, I have kept pushing and have succeeded out of sheer grit. Sometimes, it was time to admit defeat. Two years ago, I had one of those moments. 

After three years of success at MergeLane, we decided to raise a larger fund to take our organization to the next level. I decided to spend a month in the Bay Area to fundraise and strengthen our relationships with Bay Area investors and entrepreneurs. I was determined to make the month a success. 

My flight out of Colorado was delayed for several hours because of a freak, early-season snowstorm. 

I arrived in San Francisco during the most deadly and destructive forest fire in the state’s history. 

My budget-conscious apartment rental was about 94 degrees when I arrived. Opening the windows was, according to the morning news, equivalent to smoking two packs of cigarettes.

I took a deep breath and gave myself a pep talk. “You are a resilient entrepreneur. Let’s do this.”

Then the smoke got thicker, the apartment got hotter, and, because of some fire-related meeting cancellations, I was behind on my objective.

I was discouraged but still determined. I went to the Cendana Summit, an annual conference for fund managers. When I arrived, I found myself in a room with over a hundred equally qualified fund managers with pitches almost identical to mine. 

At MergeLane, we had paid close attention to venture capital trends, and we were well aware of the proliferation of early-stage VC funds. We had taken steps to differentiate ourselves, and we had a solid track record. However, seeing all of these funds in one room made me realize that we had some work to do.

I started to question whether we could measure up. 

Then the hives came. My eyes react in this lovely way when I am exposed to fire smoke. Hives form on the back of my eyelids. It feels like gravel rolling over my eyeballs whether my eyes are open or shut, and makes it hard to sleep. I have prescription eye drops that usually keep these under control, but the thick smoke was too much for the drops to handle.

I decided it was time to go home. I went to my doctor in Boulder, and he told me my right eye was so bad that I needed to wear an eye patch.

Luckily, it was just in time for Halloween, but it made me wonder: Was this disastrous trip a sign that we should put our plans to raise a fund on hold or consider a completely different path?

I took some time to recover, to honestly assess my strengths and weaknesses, and to evaluate my commitment to our fund. I had heart-to-heart conversations with my colleagues. I have pages of notes from that time. In short, while my VC fund had temporarily made me a pirate, I was not ready to abandon ship.

I was reminded of three important truths:

Rest is powerful. The feeling that I am pushing water uphill with a rake can be a sign that it is time to quit, change course, or grab a better rake. This trip reminded me that it can simply be a sign that my arms need a break. After only four days of being home in the clear air, I felt recovered and jazzed to get back at it.

Lofty goals spawn failure and progress. I realized that my fire-fogged feeling of failure was a bit overblown. While I failed to meet 100% of my goals for the trip, I was 50% further than I was before I left.

Adversity sparks innovation. We emerged from this period of self-doubt as a more differentiated fund aligned with our authentic selves.

●      We’re leaning into our focus on Conscious Leadership. Our work in Conscious Leadership helped us explore the questions this trip sparked and take a better inventory of our strengths and weaknesses. We were reminded of how powerful Conscious Leadership had been for our team and our portfolio companies. It had provided, and will continue to provide, a way to help startup teams communicate better, innovate faster, and resolve conflicts more effectively.

●      We’re investing in other VC funds. We now see the wave of new VC funds as an opportunity rather than a threat. We’re investing up to 20% of our fund into select funds with at least one female leader. This increases our geographic reach and portfolio diversification, gives us an inside view of other funds, and improves our operational efficiency.

●      We’ve enhanced our fund investment strategy through Fund81, a platform with a podcast and monthly forum for other venture capital fund managers. We take the questions we have as fund managers and invite veteran VCs to answer those questions in front of an audience of other VCs. This makes us better investors and gives us the opportunity to build meaningful relationships with other VCs.

●      I’ve freed up an average of five hours of time each day. Through our updated strategy, I have bought myself an average of five hours each day. This has been a game-changer for me and our fund. I can also leverage this experience to help the leaders in our portfolio achieve similar results. 

Onward and upward


Related Posts

Episode #20: Venture Capital Lessons from 2000 and 2008: Preparing for a Downturn

At MergeLane, we’ve been thinking about how changing market conditions may affect our fund in the future. I know many of our listeners are asking themselves that question as well. Our guest, Liza Benson, thrived as a VC through both the dot-com crash in 2000 and the 2008 financial crisis.

Read more ➞

Episode #19: The LP Perspective and the #OpenLP Reboot with Beezer Clarkson

Beezer Clarkson invests in early-stage venture funds at Sapphire Partners (the division within Sapphire Ventures that invests in venture funds). In this episode, Beezer shares her perspective on venture capital trends, VC firm differentiation, and nonobvious mistakes for VC fund managers to avoid. 

Read more ➞

If Your VC Fund Makes You a Pirate, Should You Abandon Ship?

As an entrepreneur and startup investor, I have had many moments of feeling like I am pushing water uphill with a rake. Sometimes, I have kept pushing and have succeeded out of sheer grit. Sometimes, it was time to admit defeat. Two years ago, I had one of those moments. 

Read more ➞

Episode #18: Assessing Hustle with the Hustle Fund

Elizabeth Yin, co-founder and general partner at the Hustle Fund, shared her thoughts on how to assess a startup’s ability to “hustle”. Her thoughts are applicable to venture capitalists, startups and anyone who wants to work with hustlers. 

Read more ➞

“Sorry for the Delay”? I Don’t Accept Your Apology

Nearly every email I receive starts with “Sorry for the delay.” Our always-on culture has set an unwritten expectation that an email should be responded to within 24 hours. To prevent the perpetuation of this cultural expectation, I would like to make my thoughts clear.

Read more ➞

Fund81 Fall Startup Showcase: Four Startups Sourced from Our VC Forum

We asked our Fund81 forum for venture capitalists to nominate portfolio companies to participate in a startup showcase. We received over 50 nominations. Four of those startups are featured in this episode. 

Read more ➞

Episode #16: Investing in AI – The New Metrics, Milestones, and Playbooks for AI-driven Startups

Jocelyn Goldfein from Zetta Venture Partners joined the Fund81 podcast to share her approach to investing in artificial intelligence (AI). With the cost of creating software continuing to decline, Zetta believes the companies of the future will need to build more than just great software to thrive.

Read more ➞

Episode #15: Fitting Fitness into a Startup Schedule with Nicole DeBoom

I love being active, but I also have high professional aspirations. I’ve spent the last 16 years trying to find a productive balance between the two. In this episode, Nicole DeBoom, pro triathlete turned CEO of Skirt Sports, and I share our thoughts on how to fit fitness into a startup schedule.

Read more ➞

Episode #14: VC Fundraising with David Cohen | Moving LPs to a Yes

Fundraising doesn’t come naturally to David Cohen, founder and co-CEO of Techstars, but he’s learned how to leverage his strengths and team to successfully raise the funds that power the Techstars network. In this episode, he shares his honest and authentic reflections from this experience.

Read more ➞

How Conscious Leadership Bought Me 5 Hours of Extra Time Each Day

I practice the principles of Conscious Leadership, a methodology and toolkit that accelerates self-awareness. It’s being taught at companies like Yahoo, Goldman Sachs and Ebay and has forever changed every aspect of my life. I estimate that it has bought me about five hours of extra time each day.

Read more ➞