We Can't Lose Ground v3

LEARNING FROM 2020:

We Can’t Lose Ground

Three leaders in the tech and venture ecosystem connect with Orrick’s Kate O’Laughlin to discuss the year of stunning change, its impact on women and PitchBook’s recent All In takeaways.

Katie Echevarria Rosen Kitchens

Co-founder

Deena Shakir

Partner

2020 has been referred to as the “Great Acceleration,” as converging crises have created opportunities to reimagine the future. What have you found most interesting or challenging?

Deena: So many things that were already experiencing tailwinds or challenges have been amplified. From my perspective as an investor, I want to highlight two positive changes in particular. First – a trend that is now well known – the acceleration of the virtualization of medicine has changed patient behavior and created access to care where it is most needed. Importantly, payers and health systems have also been pushed on board this ship.

Deena:

Second, on the R&D side, we are seeing clinical trials undergo a wave of decentralization and virtualization, which hopefully will have an effect in including more women and people of color in clinical trials, which is critical for the future of women’s health, precision medicine, therapeutic and diagnostic innovation – we are seeing an emphasis on the importance of inclusion in R&D in particular around the development of a COVID vaccine. There are so many headwinds also being accelerated by the pandemic, and one of particular note is that women are suffering the most, particularly Black and Latinx women, in terms of dropping out of the workforce, experiencing the bulk of the burden of childcare and housework responsibilities, and experiencing crippling effects on mental health.

Katie: While COVID has challenged all businesses, ecommerce has been one bright spot. There is a huge segment of people who have discovered this new way of shopping, and we think this is going to be the new norm.

Katie:

That said, as a business leader, I’m concerned about the challenges for working moms. We have always seen an imbalance of the mental weight of household responsibilities on women’s shoulders, and that has only intensified. At FabFitFun, we’re trying to address this by making some changes in the way we work. We’re more intentional about meetings versus discussions that could be handled over email, and we are looking at who actually needs to be present – this has allowed me to skip the ones I don’t have to be in while also letting my team shine.

Amanda: I’ve seen an opening for certain entrepreneurs. New ideas, products and technology are being developed and new ways of communicating and reaching investors are creating access for founders that didn’t exist last year – or didn’t exist in such volumes. I am hopeful that such openings will expand to pick up more diverse entrepreneurs as well – including diversity of geography. We cannot lose the traction gained, and we need to continue to bring our collective entrepreneurial energy to keep solving problems.

Amanda:

We’ve seen interesting findings about companies founded by women – specifically, that they’re exiting faster than the broader market. What’s driving that trend?

Deena: Everything seems to be happening at a different speed these days; just look at the tech news headlines from the last few weeks to get a sense for the velocity of exits, IPOs, SPACs, M&A. I think we’re entering a new chapter here. We finally have enough of a sample set of women founders that are having exits; while we don’t yet know exactly what this trend means, I expect it to continue to change as the market changes and also as the number of women-founded venture-backed businesses continue to proliferate.

Deena:

Katie: We do not, by any means, have the answer yet. One factor may be that, in a historically very white male-dominated market, we’ve had somewhat of an echo chamber of ideas and products. As more women enter the market and introduce new perspectives and new products, it could be that both consumer and strategic buyers are responding with pent up demand.

Katie:

Amanda: We definitely need more data to see what is driving this trend, including whether it falls into a specific exit type and a specific sector. While this sounds positive on its face, an acquisition may not be a founder’s ideal outcome and exiting too soon may mean leaving money on the table.

Amanda:

Deena:

Deena: There is enough research to show that there’s a symbiosis and a natural attraction between founders and funders who can relate to one another. Unfortunately, that is part of what led to a lot of the homogeneous nature of both sides of the table, which is beginning to change (but not enough yet). I’m proud to say my portfolio at Lux is reflective of my own commitment to diversity and inclusion and conviction that investing in women and URM-founded companies is not just good, it’s good business.

Women founders and CEOs both hit records in 2019 and 2020 could have been another record setter. Now the data says that women are struggling more than men to get funding. What are you doing to promote and support them?

On a personal level, I am a “VC Champion” for All Raise , as is my partner Josh Wolfe, where we commit to mentoring emerging women and POC investors, and also I’m involved in the Valence Funding Network for Black entrepreneurs, and my partner Peter Hebert is an advisor to Concrete Rose Capital, a venture fund committed to supporting underrepresented founders, communities, and companies.

Back when I was at Google and we first released the staggering demographics of the company’s computer scientists and engineers, I was part of an internal committee that took a thoughtful look into how we can move the needle to encourage more diversity.

As computer science was one of the few STEM fields experiencing a dip in women graduates, we wanted to understand what was causing this reversal. We realized there were various points of attrition, from a young girl’s education through her decision to drop out of a computer science Ph.D. program. We worked with the Geena Davis Institute to address the role Hollywood could play in writing diverse engineers into TV shows and movies and offer models and inspiration. In my opinion, the VC industry could take a page from this playbook; it’s much more complex than simply token hiring. We need to look at motivations around joining the industry, getting hired, getting promoted, and staying in it. Reports like All In are a critical piece of that.

Katie: We have been intentional about highlighting brands founded by women, people of color, people who really look, feel and represent our incredible membership. We’ve enjoyed being able to support these brands through our buying power. Our POs are probably what makes the most dramatic impact on these brands – growing from a couple hundred thousand units to well past a million makes a pretty significant impact on any size of business.

Katie:

Amanda: We support communities that are able to reach more women founders and investors, like All Raise , in order to make legal advice more accessible, as well as to ensure that our deal flow to investors is more equitable. Orrick also recently piloted two flat fee startup packages that will help companies tackle essential legal requirements without the uncertainty of fluctuating legal fees. For founders with less capital or runway readily available, which we know predominantly and historically impacts women and diverse founders, we think this will help overcome that obstacle.

Amanda:

Social science tells us that across industries – tech, venture, law and beyond – diverse teams outperform homogeneous teams. Have you seen that in practice?

Deena: Absolutely. And it’s more than just social science research; we’re seeing data emerge about diverse exec teams, diverse boards, and diverse investing teams and their positive effects on the bottom line. And it’s also about more than gender and racial representation; it’s also about intellectual, professional, ethnic, and socioeconomic diversity – all of these factors play a role in the rigor of the decision-making that produces good outcomes.

Deena:

Katie: FabFitFun has found that having a diverse team helps us to better understand consumer needs. We do diversity testing on all of the products that go into the box to test how shades look on different skin tones, what products mean for different hair types, and how items work for all body types. We’ve seen incredible success when it comes to both acquisition and retention in making sure that we are really inclusive of all different types of women and the business results have followed.

Katie:

Amanda: A diverse team challenges a stuck and fixed mindset – with greater diversity we are able to tackle client challenges and get to a better solution. In addition, we are thrilled to see clients – current and prospective – demanding diverse team compositions. That forcing function is leading to needed significant change in law firms.

Amanda:

Fast-forward five years: What do you hope to see in PitchBook’s 2025 All In report?

Deena: I want to see the full cycle of LPs to GPs to founders to the employee base completely representative of our communities. Data shows that women also invest more in companies that have an impact. So there are multiple positive forces that come out of a commitment to diverse founders and funders. These companies will become standout businesses that will return funds to these LPs who are, in our case, philanthropic institutions and hospitals and educational endowments, that will then go on to support even more positive benefits. And the companies these diverse founders are creating are also meaningfully changing lives and employing a more diverse base that is shaping the future at the same time.

Deena:

Katie: I would rather not see this hyper-focus on brands founded by women and people of color because we will have arrived at real parity.

Katie:

Amanda: My hope is that we have continued to push for equality on all fronts, gender, racial, socioeconomic, geographic, and that the Great Acceleration indeed propelled us to a better place. I also hope to see Civic Tech as another closely watched industry, alongside FinTech, HealthTech and Big Tech.

Amanda:

What’s one thing you’re doing differently today versus a year ago?

Deena: One of the upsides of shelter-in-place for my family has been discovering all these beautiful new corners of the Bay Area–beaches and hikes and walks. Lots of bonding time with my kids (3 and 5), but also being forced to create boundaries to stay productive, present, and sane (still a work in progress!).

Deena:

Katie: For the past 10 years, I have prioritized the business and my kids. One silver lining is that, without a commute, I have more time for my own wellness and self-care. In this time where we’re feeling an incredible amount of anxiety and stress, finding time for a fitness routine has been incredibly beneficial. It makes me a better leader and a better mom. It’s a little sad that it took a pandemic to get me back to this place, but I am grateful for that pivot.

Katie:

Amanda: I’ve never been into fitness challenges, but the Glo app has kept me going and made me a better person, spouse and parent. I’m also now an occasional 1st grade teacher … which I was not last year.

Amanda:

Read PitchBook’s report here.

About Our Participants

Katie Echevarria Rosen Kitchens is the Co-Founder & Editor-in-Chief of FabFitFun. In her role, Katie led its evolution as a women-first media brand, from writing about great lifestyle products to getting them into people’s hands. Since launching the FabFitFun lifestyle box 2013, she has shifted her energy toward curating fresh and exciting brands for FabFitFun members, with the seasonal subscription box as its anchor experience.

Katie Echevarria Rosen Kitchens

Deena Shakir is a Partner at Lux Capital where she invests in transformative technologies streamlining analog industries and improving lives and livelihoods. Since joining Lux in 2019, she’s led investments in Mos, Shiru and Neo. Prior to Lux, Deena was a Partner at GV supporting a portfolio of 300+ companies.

Deena Shakir

Amanda Galton , partner and co-leader of Orrick’s global Technology Companies Group, advises founders, companies and investors in growth, and anticipated and unforeseen legal and business obstacles. Amanda dedicates time to advancing investment in and by women through All Raise .

Amanda Galton

Kate O’Laughlin is the former Director of Tech and Investment at Orrick.

Amanda Galton

here

All Raise