Renata Merino, Venture Investor

Q: What has your experience as a female working in a male-dominated industry been like?

A: As a woman in tech, entrepreneurship, and venture capital, I’ve found that I’ve always had to work twice as hard, be twice as prepared, and know twice as much as my male counterparts. The rationale behind this “double-preparedness” is two-fold: First, we are questioned more than men and typically those questions focus more on what is wrong or the riskiness of the model, business plan or strategy. Our male counterparts receive questions focused more on risks as opportunities versus threats. Secondly, historically societal norms don’t have women at the helm in male-dominated businesses such as tech, corporate and VC. When there aren’t a lot of us, it requires a few of us to break the mold, push past the glass ceiling and be double-prepared to “earn the right” on the field so we can bring more women with us once we reach a decision-making leadership role. In addition, another roadblock specifically for female founders pitching to all-male VC’s is that if you are a female founder and have a female-focused startup, decision-makers will invest in the familiar and what they know. We know that women are the primary spenders of consumerism and we also know that they represent 50% of the population. An all-male VC team will end up “leaving money on the table” by not ensuring that their check-writing team is diverse which can lead to passing on investing in companies that target the general consumer spending population.

Overall, as a “double minority” (female and Hispanic) in business, throughout my career in corporate, investment banking, entrepreneurship, as an investor/VC, and motherhood, my life has been a long road. It has required resilience, determination and having the brainpower and life experience to ward off those that say “No” and find the gems who say “Yes”. The big “ah-ha moment” I have had being female and minority in this industry has been finding the right supportive community that sees the vision, value and need for diversity at the top.

Q: What advice would you give to founders that are having a tough time raising capital?

A: I work with many different founders. Typically, my role has not only been to invest and provide advisory support to founders, but also to help make introductions to other angel investors or VC’s that are interested in investing. My advice to founders is the following: First, do your homework. There is a VC list going around that summarizes which VC’s and investors are great to work with and which ones are not so great. Even though you may be heavily focused on getting “anyone’s” money, you should NEVER approach raising capital in this manner. (And this advice is coming from someone who is an investor and VC. Me!). Raising capital is like dating. You need to date someone first, for a while before you decide (or IF you decide) to get married. Once you’re married, do you want someone destroying your company or your life?? Definitely not. Be ready to dedicate a full year as a first time raise. Second, ensure that the VC or angel investor is bringing something more to the table other than money. Perhaps they were operators, a previous founder with experience or perhaps they are tied to a few major customers that could be good leads for you? Ensure that they are bringing something more to the table. Third, have a very good lawyer and understand how each stage your raise affects the next round. You want to make sure you are not over-loading your cap table. Fourth, work on your deck and your pitch. Many times, founders fail in raising or have a difficult time raising because they do not know how to sell. If this is the case, you need to practice and know your pitch! Also, you need to tell your story from a personal standpoint and not focus only on what the investors want to hear. Your pitch and story need to come from an authentic place. Finally, venture outside your region and at a first introduction, don’t ask for money, ask for advice. It all begins with advice. Advice can lead to interest and interest can lead to an introduction, and that slow, developed relationship can lead to a future investment.

Q: Your last answer implies that diversity in a VC firm is critical to maximize their returns. What kind of diversity should a founder look for when evaluating different firms?

A: Diversity means more than gender or ethnic diversity. Founders should look to see if the VC team they’re considering has a diversity in backgrounds, networks, and skillsets. Since a main role of a VC is helping investments grow, a firm with a variety of specialties and skillsets can contribute to your success in more ways than a firm that isn’t as diverse. Remember, venture capitalists do not just give you money and then leave. If you are looking for impactful investors, don’t just look for the most money, but also look for who can help you achieve your goals and grow your company.

Q: You mentioned in our prior discussions that one of your personal vision statements is “Don’t Leave Money on the Table”, can you explain what this means?

A: With respect to corporate, venture capital, investment banking, startups, non-profits, government or ANY business or industry, if you do not invest in diversity of thought, skillsets, experience, culture or gender, you aren’t making the best decisions for your firm, startup or your business. “Leaving money on the Table” means your sales could be higher, your deal flow could be better, your customers could be bigger and the sustainability of your business could be insurmountable. Leaving money on the table is not just about hiring diversity, it’s about giving equal power to the decision makers so that you are ensuring that your networks, deal flow and business decisions are in the best interests of your shareholders, investors and employees. For example, missing out on investing in female founders leaves money on the table. According to a BCG published report female-founded startups generate 78 cents for every dollar invested, while startups that are run by males generate 31 cents per dollar. As a venture capitalist, I want to be the access to capital for female and minority founders and make sure that I am not leaving money on the table.

Q: Is there anything else you want early-stage companies to know?

A: Here are my top 10 tips for early-stage startups:

  1. Make sure you are solving a problem.
  2. Make sure the problem is personal. (You relate somehow to the problem)
  3. Make sure you know how to tell a story. (Know your pitch)
  4. Make sure you have a strong team. (Core team or advisory board)
  5. Some say traction is key, but I say it is proof of concept. Whether it’s sales, or customer interest/commitment, you need to prove that people will pay for what you are offering.
  6. Is your solution protected or sustainable? If not, figure out a way to make it stick.
  7. Raising capital is a full-time job. Prepare for 1 year and vet your investors. Remember, the process is like a marriage: you need to date first.
  8. Plan who is going to be on your cap table. Make sure you have a good lawyer.
  9. Find a supportive community of VCs, founders, who you can bounce ideas off of. (Accelerator, Incubators)
  10. Invest in your mental, physical, and emotional health every day. Exercise daily. Hire a therapist (trust me, you will need one). Meditate or find a way to be at peace for at least 30 minutes a day. Founder burnout and founder depression is very real.

Learn more about Renata Merino here.

Renata Merino is a 20-year operator, ex-investment banker, Chicago Booth MBA, Latina serial entrepreneur turned investor. She leads the charge for investing in women and underserved founders by investing in health, wellness, fitness, and sports tech. Her goal is to be a “change agent” for the new face of venture capital, leveraging her 20+ yrs as an operator, heavy quant focus, and pay-it-forward approach in helping founders build and scale while also returning the fund. As a supporter of women and diversity, Renata believes that top-performing funds are about “check-writing” team diversification not only via ethnic, cultural, and male/female ratios but also through a diversity of skill sets, experiences, and perspectives. This way of thinking leads to casting a wider “Network-affect” net, supporting a diverse group of founders, and offering a breadth of operational advisory to each portfolio company. She refers to this innovative way of thinking as the “new venture capital”.