VC Trends — Enterprise Tech Innovation and Market Dynamics with Lara Druyan
October 21, 2021
Some portions were taken out to preserve privacy of audience members. Speakers in the recording include Lara Druyan (Managing Director at Silicon Valley Data Capital), Aakash Shah (Co-Founder of NeonVest) and Surya Viswanathan (Co-Founder of NeonVest).
0:01 — Aakash Shah
I think now is a good time to set in and like I said, we could kind of, people will come in throughout the conversation and so we could kind of reintroduce ourselves and then just kind of continue from where we are.
But yeah, thank you everyone for joining.
Hope everyone’s having a great Thursday so far.
Welcome back to NeonVest’s second Clubhouse event to give you all some context around NeonVest we’re an enterprise Tech startup based out of New York where we make data driven matches between early stage Founders and Experts in VC, primarily from the perspective of mentorship and feedback on their businesses, but also to grow their investor network, connect them with people that can help them scale up their business.
And so we work with a lot of experts in VC
Like Lara, and a lot of startups as well.
So hopefully this conversation is useful, insightful, and hopefully adds a different perspective to you guys from whatever angle you’re approaching it from.
So the themes today that probably we will kind of be discussing are around VC, in general, Enterprise Tech, even kind of newer VC Funds and some of the dynamics throughout that and also Women in Venture, Women in Tech and what opportunities they can kind of take advantage of.
So with that said, I would love to have Lara kind of give a quick background on herself and then we can dive right into it.
So Lara,
1:41- Lara Druyan
Yeah, hi everybody, thanks for joining.
Starting my career in Product Management at Silicon Graphics back in the day.
and, I was in Venture for quite a while as a partner at a Fund.
I Left the Fund, ended up working with US Venture Partners, was a venture advisor at SRI and was running corporate development at a publicly traded Fintech when I got a call from Royal Bank of Canada, which I ended up joining as their Head of Innovation.
And while at RBC I drove Digital Transformation for 3.5 years, then I was recruited to rejoin the Venture ranks a couple of years ago.
I’m one of two partners at a Fund called Silicon Valley Data Capital and, that’s just a little bit about me.
2:32 — Aakash Shah
Thanks a lot.
And yeah, Lara’s background is very illustrious and diverse, and we’ll dive into some parts of that later on in this conversation.
So today we wanted to discuss a couple of things Enterprise Tech, because the space has taken off in a big way over the last few years
More than that, actually, businesses are realising that tools that can help them make better decisions are critical. Startups are realising many gaps exist in the current framework of how industries, particularly legacy industries operate and so on.
So, we’re lucky enough to have a unique perspective from Lara who has been named one of Silicon Valley Investors, you need to know, and I hope you guys enjoy.
So, we’ll get started with kind of, the first couple of questions around SVD capital and what you’re looking at.
So Lara wanted to hear a little bit more from you about sort of, given the emergence of so many EnterpriseTech Startups in the market today, with applications for everything from decision making, to CRM, to customer acquisition, do you see any consolidation coming in the future or do you think Enterprises will kind of use a fragmented set of of companies, of subscriptions, for all these various cases?
3:47 — Lara Druyan
Yeah, look, I think, you know, certainly every CIO you talked to do everything they can to you know, streamline their vendors, right?
Nobody wants to use 100 different vendors for everything or if you’re really big bang, God only knows how many vendors.
not even sure I knew the number of account across RBC
However, you know, a lot of times vendors offer solutions that don’t always work or don’t work as advertised, you know
If you take, you know, so for example, when I was at RBC, we, you know, rolled out, believe it or not, we’re still rolling out Salesforce two parts of the bank even, you know, four years ago and you can say what genes Salesforce has, you know, Einstein is a way to use AI to better populate you know, salesforce well, it doesn’t work all that well, and so I think and that’s as a female I will get to later about about CRN where opportunities are, but so I think as much as there is a desire to, you know, streamline vendors, I think that when people have needs that aren’t being met by incumbents, they’re still going to search out other solutions.
So, you know, that I think even if the desire to minimize is there.
5:11 — Aakash Shah
Got it. No, that’s super fascinating.
And yeah, one key thing for many enterprises today is firstly making sure they’re constantly on the hunt to figure out the best product for their particular issues that they’re facing, how much can it be customized or how much it doesn’t need to be, but I mean, have you guys thought about and given especially in your role as Head of Innovation at RBC, like, how you work with corporations perhaps to help them find innovative new startups?
Or even at your time at RBC, obviously you were leading a lot of this, like how do corporations typically find those startups and startups also make those PTV sales?
5:59 — Lara Druyan
That is a great and complicated question.
So, I would say that the short answer is, typically not well, sort of either side.
So, you know, there’s a lot of what I call “innovation tourism” that takes place.
So I was speaking to JPMorgan’s Asset Management Business when I was at RBC running innovation because the Capital Markets’ folks, especially Directive folks said, hey, you know, a lot of our clients have the same challenges.
Of course, JPMorgan’s Asset Management did as well.
And here’s Senior Executives at JPMorgan Asset Management telling me how Mary Erdoes, Heads of that division, was going to go on a trip and go to Andresen and a bunch of other things and I’m thinking to myself, that’s great!
But Mary Erdoes isn’t choosing technology guys, you know, that is innovation tourism and as a startup, you obviously don’t want to hire kickers, you actually want people who are gonna buy.
Sometimes things are driven top down, but it’s not very often. And it’s probably not through that kind of trip, better if it’s somebody who actually has the issue. I will say that, that said, sometimes you look at, this happened to me, the then Head of Global Markets and Treasury and Investment Banking, Treasury Investor and Treasury Services had, I guess gone to an RBC clients, seen a video solution that, you know, did a nice job of marketing, whatever the clients services were and so we need that at our VC, go make that happen!
And so the procurement people called me up, like we need help to find a vendor and you know, that guy can actually do that, but that’s pretty rare that it would be top down driven that way. In general, you really, as a startup, you want to get to business user who actually has the need as a large company.
I think one of the hard parts is they don’t, I guess let me back-up. When I joined RBC, I got a call from Angela Strange at Andresen because, she had recently met with Dave McKay, the Ceo of RBC and she called me, she said Dave McKay is looking for you, but he doesn’t know how to find you because he wanted somebody who worked in large Financial Services before who had big Technology Operating experience, preferably line experience as well as venture experience and I can, you know, I can explain why all those three and it turns out those are hard to find, but you know, to try to have for big companies, you know, they need people who are familiar with startups, who understand the local community.
I think one of the challenges with respect to many innovation initiatives, and I saw this across the bank, I cannot tell you how many people had innovation titles who had like failed at something else, like somehow innovation was going to be easy and you know, failed traders and I’m like, are you kidding me?
And that’s also part of why a lot of these innovation initiatives don’t work, you know, you as the..,
If you are a startup, trying to sell your, kind of, trying to figure out, like who’s on the other side of the table, are they serious?
And are they going to get, you know, do they have a real business need for this and how do they perceive using it?
I think those are all, you know, kinds of questions, it’s a little awkward, but you kind of have to run to ground fairly quickly to figure out if somebody’s real.
9:36 — Aakash Shah
Yeah, definitely.
I mean a lot of, a lot of the issues, I guess, with B2B sales come down to firstly figuring out the right point person then figuring out, do they have a large enough need for the solution or a big enough problem?
And then it’s actually selling it to whoever their higher hopes are and that’s kind of what takes a good amount of time. But I guess in fact it’s interesting because at NeonVest’s scale as well, we plan to expand, kind of, some of the use cases and one of them is just using the data driven matching to match startups with people who are relevant people at these Corporate Ventures or at business units of Corporate because it’s a huge issue for enterprises or startups that are building good enterprise tech, but just can’t be found.
I guess shifting gears a little bit to something you previously said around, the CRM is part of where you see the opportunities. I mean, what do you think are the most compelling opportunities within Enterprise Tech that you’re seeing today and also what are some of the sectors that are nascent today that you think will expand massively over the next period?
10:54 — Lara Druyan
Yeah, this isn’t necessarily nascent, although I haven’t seen much that does this, you know, I can tell you that, you know, especially in legacy companies, people have spent tens of millions of dollars deploying Salesforce and they had thought “gee, if I deploy Salesforce, all of my unified views of the customer issues are going to be solved” and it turns out like sales versus that is pretty complicated.
It has a lot of really valuable information that you can’t necessarily access and sometimes it’s missing information.
And so I would say solutions that make your CRM more valuable are very desirable, particularly if you pitch them that way, because I do think that, I’ve talked to C level Executives across, especially in financial services this is a huge problem for them. And I think one that continues to be really challenging, I think data governance, who has access to what, how do you share data, and you know, especially in regulated industries, Healthcare and Financial Services in particular, how do you share data but maintain privacy of that data?
Data-observe ability is certainly an area I hear a lot of interest in, from enterprises. Those are some areas where I think there is a fair amount of head-room and by the way, when I think about things like making your CRM more valuable, whether it’s access, you know, gain sight, sort of, trying to create a layer across your CRM to make it more actionable.
But it’s even things like populating, how do you populate it. Because salespeople don’t want to enter a lot of stuff in a keyboard, you know, your CRM is only as valuable as the data you have and there’s so much that’s missed because of the difficulty in populating.
So I’ve seen some interesting things around, you know, have, you know, if there’s one company that said “gee, we have a sales process that’s supposed to step five, you know, demo” and it turned out like a third of the people won’t be doing that.
And so how do you start to, you know, if you’ve got a suggestion process, that’s not being followed, there are all these kinds of things that I think are real opportunities for startups, so when I say making your CRM more valuable, I’m speaking very broadly.
13:10 — Aakash Shah
Sure.
Yeah, that’s super interesting because one component obviously, with a lot of this, is the data that actually goes into it. And the quality of that data will partially determine the quality of output and also whatever the enterprises is using it for.
If it’s some type of decision making, then it really depends on the quality of the inputs And so yeah, I mean that’s super.
I’m also just trying to think in terms of what that looks like, and an actual solution…
When looking at your portfolio, I’ve seen sort of a couple of companies across verticals, but do you guys have a particular focus when it comes to enterprise?
And I was curious about how you view Blockchain as a component within that.
And, I mean, just from your perspective, do you think it will be a big part of how corporations will build out their infrastructure over the next five years and if there is going to be adoption, is there gonna be like a catalyst for change?
Or is it just gonna be something that happens over time?
14:22 — Lara Druyan
So it’s a great question.
And, so, I’ll try to answer in order.
So, with respect to the portfolio, you know, like everybody, I mean, we’re a seed and early stage investors.
So little investors, early as a couple of folks with a piece of paper and an idea to, you know.. Somebody in the market with a product and some customer attraction and you know, obviously every venture capitalist looks for big markets, big problems, differentiated solutions, hopefully with entrepreneurs who obviously believe in and are compelling.
And I would say that we’ve done that in a variety of industries, we try to, you know ,obviously validate that it’s a big market and that there’s a real need.
I think the hardest thing for startups is to really focus on the strategic value they provide to their clients and their customers.
And by that I should explain.
So, a good friend of ours, out of the fund, a good friend of mine, was the first investor in Oracle Informatica and Business Objects. And he described, Oracle, he said, you know, people said … Why, he asks, why do you think Larry Ellison was successful?
And I said, oh, you know, he sold a database localize.
And he said “no, there were other databases in the market when Oracle started. What Larry Ellison had great insight to was that his client base hated IBM because they made you buy their hardware in order to access their database.”
And so what Larry Ellison went out and sold was freedom from the hardware-lock from IBM. And that, you know, almost everybody misses that. Right?
And so, you know, reframe the question of “What strategic value are you providing to your clients?”, right?
It makes people think about it differently.
So, we care a lot about that in terms of how you define that and is that compelling?
With respect to Blockchain, you know, I sat on our VCs crypto asset oversight committee and, and frankly, RBC was one of the, I think the first two experimental Blockchain when I got to the bank, RBC had deployed a solution for tracking.
And this was very smart, to do it in something that isn’t sort of in line, they were using a Blockchain solution by a company called Manifold to track loyalty points and I thought that was a super smart thing to do just to experiment with it.
It’s not a, you know, it’s not a huge part of our mandate.
I do look at Blockchain technologies.
Do I think it’s gonna be a big part of infrastructure in the next five years?
You know, it depends on the company, I’m not a tech first kind of person, I really try to say, and part of the reason my effort to drive digital transformation at RBC was successful is I start with what the business problem is and then look at what the most appropriate technology solution is.
And I think that there are, you know, the most interesting thing I saw at RBC, I’ve blanked on the name of the company because I just had it, of course it disappeared. There was a company that was focused on doing equity swaps on the Blockchain and ended up pilot with Goldman, JPMorgan and a big Canadian pension plan and others and you know, trying to rip out a bunch of back-office costs, I thought that made some sense.
But you know, some of the stuff is going to defy, and people saying, “oh this is going to replace big finance” You know, good luck with that!
If you look at say a bunch of the things going on in defy today, you have a lot of loans through over collateralized because people don’t know the counter party, so that’s sort of the opposite of efficiency.
Do I think that other technologies are going to be deployed?
Absolutely.
I think there’s a huge demand, like there’s a really interesting company I introduced about a year ago to my colleagues at RBC called Fire Blocks, which is doing custody for large financial institutions with crypto assets, like I think that’s a really important area and that’s a very cool company.
And there are big problems left to solve, you know, in crypto the most sort of important one, that people are by the way solving, if you think about…
Sorry, I mean, this may be too much around crypto as opposed to Blockchain, but you know, the big current problem with bitcoin in any case is scalability.
Right?
So you know the second problem is, and the creator of Bitcoin ever imagined assets versus money you know or a store of value on the chain.
And the creator theory you know that’s really a gen two network assets and currencies are tightly coupled gen three which is really where the promise is today is cash on one ledger assets on another and connect them in real time.
And there are people who know how to do this.
And you know that’s pretty interesting.
That’s why a company called Blockstream is pretty interesting.
That’s in Canada.
Sorry you didn’t ask about specific companies but I figured I should throw that in, and let you know.
19:46 — Aakash Shah
No definitely.
And yeah and for specific companies, it is actually really useful because like you said you have to think about it from the problem. Also absolutely, very chilled at the bones before them crypto you have all kinds of different use cases and applications for some of these cryptos everything from privacies to data transfer to lightning fast to decentralize somewhat centralized.
And so, like, I mean a lot of those nuances actually end up being the make or break for whether something is adopted or not adopted.
I guess just even coming broader than this.
Look, we all know that there’s a lot of money in VC right now.
I mean what do you think the consequences of this are? you think it’s spurring innovation? just making valuations higher? or something else?
And are we going to see this influx with new capital ending anytime?
20:46 — Lara Druyan
A great question.
People have been asking that question for some time, Right?
So you know, so if you go, we’ve been in a crazy bull market with respect to venture and high growth tech companies for really since sort of coming out of the financial crisis in 2009 2010, it’s a very very wrong sort of bull market within that sector.
And the reason for that is you had central banks for a long time operating in lockstep, making interest rate zero.
And I apologize for the vulgar term, but investors are “whore for growth”. Everybody wants growth and where am I going to get growth?
And one of the only places they were getting growth was you know, Tech and Biotech that related sort of technology broadly.
And so money flowed in.
And even though it sounds this doesn’t sound right because you could, early stage venture, you’re investing so far ahead.
It shouldn’t be so tightly correlated with the NASDAQ.
But that is not true.
It turns out early stage venture activity is highly correlated with what’s going on in the markets in the equity markets in particular.
And so as a result you’ve had, you know fixed income hasn’t been very attractive and so that people have gone, “okay, where was pumping all our money?”
I mean, if you look at the multiples, you know, in the public markets, right, they’re crazy for Tech and that has
Sorry, I think it’s unfortunate for everyone, of course going into the private markets as well. I mean last week I talked to a company that I’ve met through, you know, a pretty well known accelerator that…
You’re gonna love this, they have five beta clients, they’re planning on converting those very conveniently, since it’s now october, in january. They assured me that they’re all going to close because you know, that always happens, and the company wants to raise 20 million on 80 pre. And this is not a serially successful entrepreneur having the same, and you’re kind of going “great, let me know how that works out for you”, right?
And so, and there’s a lot of this, I mean, I’m not going to bore you with 100 stories like this, there are many. But you know, that is not healthy it’s not what a VC head on, that’s just not healthy for anyone ultimately.
You know, if the startup doesn’t deliver, it’s not healthy for the start up because the leader goes out of business or be recapped is something really punitive, so you know, I don’t know that they’ll raise, you know, at 100 but you know that’s just nuts.
23:20 — Aakash Shah
Yep, I would agree.
And in fact, yeah, I think everyone has these stories. We just spoke with the CDC a couple weeks ago and they were about to close a deal for three red companies basically MVP at 200 posts.
So yeah it’s going nuts right now.
23:37 — Lara Druyan
You know sadly I’m old enough to have lived through a couple of these cycles and, you know, when the music stops, right, it usually gets pretty ugly. Because, you know, bull markets, despite of what people think don’t tend to continue forever.
So, but look the feds pumping a lot of money into the system.
And you know, the big question is, when do interest rates rise? Because you know, a friend of mine, who is infinitely smarter than I am at managing assets for institutions and ultra high net worth, told me they expect, this is all about interest rates.
And when interest rates move and increase, he expects that the Equity Markets will drop by 30% or more.
And that will have a chilling effect on all of the private companies and venture capital of course. You know when that happens usually, you should probably watch Bridgewater because they are better at predicting these things than anyone else.
But you know, I also think the unfortunate thing about these kinds of valuations is it has changed a lot of, you know, who starts companies and why I call it “Sherman McCoy comes to Silicon Valley”
Which if you read Thomas Wolfe, you get the reference, and if not, like probably not.
24:54 — Aakash Shah
In fact, I like the comment of Bridgewater, my first job, we used to monitor their hedge fund and, one of their funds is basically an all weather fund.
And, and it does exactly that, right.
It’s specifically using multiple factors to make sure that it can be, market, in the bull market, in a bear market or whatever it might be.
It’s a, yeah, that’s that’s definitely a leading indicator.
And some of these quant funds as well when you look at kind of their performance and also what factors are altering.
Not like that’s public information, but to a certain extent, if you see the performance then it’s a good leading indicator of things that are changing.
25:44 — Lara Druyan
Best I can come up with.
25:48 — Aakash Shah
Yeah, on kind of this whole environment, do you have any advice or any way you think a founders should be thinking of raising money in this environment?
Do you think they should be shooting for larger rounds regardless of their funding needs? And yeah, I mean, how should entrepreneurs think about raising money today?
26:14 — Lara Druyan
Look, I always think, you know, if people want to throw money at you it’s always a good, you know, you can say “gee it’s always good to have enough for a rainy day”, but I love the best man in my wedding who serially is a successful entrepreneur said, “too much money makes you stupid”, people tend to get careless with it. And so I think the answer is, you should raise what you think you need to be successful, and if people want to offer you nutty money at ever increasing valuations, you know, that’s, it does come down to being a personal choice, but you know, for right, wrong or indifferent people tend to get pretty careless when that happens and spend money in ways that may not necessarily be generating value for all the shareholders.
And there does tend to be a certain amnesia about the fact that raising money is not the holy grail. Generating a return on that money for all the stakeholders, including yourself is.
And if you think you can do that by raising some crazy round, you know, godspeed, but that is not necessarily how this will all work out.
27:35 — Aakash Shah
Yeah, definitely.
I mean, I agree with that and a little later-on I would love to open up the floor to see whether anyone kind of has different views. But even for us, and I think it’s very important to know what you need and model it out accordingly. And not necessarily get swayed by a lot of money, because usually that will also lead to more dilution. But even if it doesn’t it’s kind of like not necessary at that particular point in time.
I wanted a kind of switch acts to something else that you seem to be quite involved in.
And also, I mean, to be honest, a role model for many women out there, you’ve had a long and diverse career in operating rules, investing and board roles.
And as a woman, you face much tougher odds than most others.
I mean, firstly, congrats on what you’ve achieved so far. For any women listening to this today and in the future, I mean, do you have any advice on how to take advantage or kind of do well in the current environment to become successful.
28:48 — Lara Druyan
You know, I hope it’s not environment dependent or at least I hope my advice is not environment dependent.
I think that, and you’re kind thank you. I think for a woman or an underrepresented minority to be successful
I mean, you know, David Liddell who was a long-time partner at USBP once told me “look you guys, I always love to hire women because for you to get as far as you have, you’ve got to be really good. The market isn’t very forgiving” which I think is sadly true.
And I think that no matter what it is you’re trying to achieve, whether you’re starting out as an investor, whether you are an operator.
I think that a couple of things were always helpful.
One, like male, female, anything, I think having what I think of as a personal board of directors is very helpful.
Those are people you can go to, hopefully who you’re not currently working with or for; but there are people whose advice you trust and can always trust for you to be successful. So that if you have either hard decisions or challenges or great opportunities that you can go to them.
I think that’s a very important thing to do.
I also think women tend to, and I’m not a person of color so I can’t speak for underrepresented minorities, but I think we tend to put ourselves last so we aren’t necessarily as good at building a network.
You know, having lunch with that friend of yours from business school from 10 years ago.
And I think that’s terribly important.
There’s a lot of work opportunity etcetera that happens because “oh! you just ran into so and so” and I think that is something that’s really important to care and feed off your hate to exploit network because it’s such a pejorative tone for this.
But I think that’s always important because whether you’re trying to sell a product to someone, get financing, hire someone…
You know, these things are done through people, and so you know, care and feeding of your network is really important and not something to think like, “oh, I’ll do that next week or next month or next year or when my kids get bigger” or whatever the issue is.
So I think those are really important.
And finally, if thinking about moving, starting a new job or whatever you want to, I always recommend this.
You always have to think about hiring your boss.
And if you’re a woman, I always recommend trying to figure out what your boss’s wife does because that will tell you a lot about how well they deal with strong women.
I have always found, personally, I have done better with men who have working wives, if they married Barbie, it didn’t tend to go well for me.
31:51 — Aakash Shah
Yeah, I mean that makes sense.
I can definitely see the correlation between that and also, in a professional environment, being able to have I guess constructive discussions and make decisions like that as well.
What’s really interesting today is, I mean, you’re seeing a rise in self made women. Like even just yesterday Sara Blakely selling part of Spanx to an all women team at Blackstone, Whitney Wolfe from Bumble, Melanie Perkins Canva.
I mean, Do you think anything has changed today from 10 years ago? That has sort of been different about the environment or the infrastructure today, that may have not made this possible a while ago? Or has it just been more innovation?
32:45 — Lara Druyan
No, I think a lot of this is, like many things. was driven from the top down.
And so you had, Goldman for example was the first who went to all these private companies and said “you have no women on your boards, we’re not taking you public”.
NASDAQ changed its rules, right? California has rules about directors.
And you know, I think if you have a group a monoculture at a board level, you’re gonna have a monoculture at the company level because people don’t even notice that we’re talking to an all purple team, Right?
And so, I think that really changed things because then it’s sort of like, “well, gee where are women on the board? Where are women on the executive team?
I still think it’s pretty…
so I think that’s great and, you know, honestly long overdue.
But I think that’s changed things both for the boardroom as probably also for the executives in the executive suite.
I think, you know, in ventures, increasingly we do have more women, still not enough in the founder ranks.
That’s still pretty woefully inadequate.
Now, Sarah Lacy, a pretty well known journalist in the Tech Space who’s a friend, hosts these dinners.
She calls them the “3% Club” and they’re for women investors and founders.
And the number 3% is because that’s the percentage of venture capital that goes to women-founded companies per year. And it hasn’t moved much.
We have a lot more work to do there.
34:18 — Aakash Shah
Mhm, interesting.
I mean, do you think the strategy of VC funds that are only focused on women or on minorities, do you think that’s what we need more of, or is it more like a structural shift by any VC?
Which is just, look, we don’t honestly care where that founder comes from, what their personal kind of demographics are, we care if it’s a strong and determined person, if they’re going to do well, and if we’re going to perform as a result of that.
I mean, do you have any particular ideas or things you support in terms of how to change things?
35:03 — Lara Druyan
Yeah.
I I don’t think that saying GM is only going to back women, I’m only going to back X or Y.. is great, because I think you really want to back, especially if you’re an investor who’s, you know, really your fiduciary for your limited partners, right?
I think you’re mandate is to try to make money for those folks.
That said, I do think you’re more likely to invest in if you’re a venture fund who has women at the table, just because you see the world differently and that is a good thing.
But no, I don’t think saying “gee we’re only going to fund X” is great because, in fact, you could end up with a really unfortunate situation, which is we only funded women and what if the fund doesn’t do well? And then somebody goes, “oh, well, it’s just proof that this doesn’t work”, right?
So I don’t think, I think that can get dangerous, right?
And that would be a disaster.
36:07 — Aakash Shah
That’s true, actually, I didn’t think about the inverse side of things.
I mean, even from my perspective, I think what’s really important and the fundamental aspect of this is that just people don’t discriminate, right?
And you just kind of think of it on objective qualities, like you said, for a fund one of your primary goals outside of, if you have like kind of a sustainability fund or anything else is to make money for LPs and so, what’s the best way to do that? and if it happens to be a woman founder, that’s amazing. But not necessarily I guess kind of limiting your whole universe to that.
But yeah, I mean, I think that is a good point that’s quite being launched.
I think the last part of this discussion, before we open it up for questions, which I want to do because there’s been a couple of people in the audience that have listened to a lot of this discussion and I think it’ll be great to hear from some of them.
But so, personally on the Fund itself, it’s a relatively new Fund in the market.
I mean, what did you find useful to build the fund? are any useful tips out there for people raising capital today for their own funds?
37:31 — Lara Druyan
So my partner had raised the fund a couple years before I joined.
I think the hardest thing for any new fund though, is really,
and you know, we talked earlier about how the market is awashing capital.
So I think the hardest thing,
and the good news is that, that means that capital at some level is a commodity.
so I think the hardest part for any new fund, including SPDC, is, you know, how do you differentiate yourself from all of the other capital?
For me personally, the way I differentiate myself is, this does resonate with founders particularly because it’s quite referenciable, which I think is critical
is that I’m probably the only VC, that a founder talks to, that has actually been on the buying side of technology as opposed to the selling side.
So, I actually have a really intimate understanding of how enterprise softwares gets bought and also an accompanying network of folks to reach out to help with early sales, which tends to be one of the things that entrepreneurs rightfully should want from their investors.
But I think figuring out what your unique, you know, the same way the entrepreneurs are figuring out their unique value proposition, especially as a new fund,
What’s your unique value proposition is, I think, really critical. And then the hard part is generating interesting deals where you’re not going to some Y Combinator thing going “thumbs up! I just saw that presentation for 10 minutes and I’m gonna invest” because “God help us” if that’s really how we’re having to do deals today.
39:04 — Aakash Shah
Yeah, yeah, agreed.
And the other interesting thing about what I see in particular it’s kind of risen above the rest to a certain extent now and it’s very interesting because there are so many accelerators out there now, and some of them may have aspirations for becoming funds themselves, but I think that relationship is changing in terms of how funds work with accelerators at and vice-versa.
I guess just one last question before I open it up.
Is there something you wouldn’t tell an entrepreneur if they were pitching you, but you would tell them if you were mentoring them on, say NeonVest?
39:43 — Lara Druyan
No, you know, they’re a bunch of people in this room who know me. I’m pretty, I’ll use an old lotus term, which is, “what you see is what you get”.
So I wouldn’t be cruel to an entrepreneur, you know, I wouldn’t tell someone “gee, you’re clearly not the CEO for the business”, but nor would I say that on your platform.
But no, I mean, I try to be, my overwhelming feeling for better or for worse, you know, people pitching me, you’ve done me the tremendous favor of sharing your vision, your dream to build X. The least I can do is try to provide some advice about, even if I’m not going to invest, about what might make it even more compelling, right? or what challenge you may run into. And you know, people can take that or not, but I would certainly appreciate it if people did that for me.
So there’s really nothing that I would hold back.
40:47 — Aakash Shah
Sure, and that’s a great perspective, not all VCs necessarily have the same view, but it’s great to hear that you do.
I guess with that said I would love to kind of open it up to the rest of the audience, all you guys have to do is just raise your hand and I’ll call you up on stage if you want to ask Lara or myself a question.
But in the meantime, Lara, I wanted to do something interesting, which was a rapid-fire round, just to hear your perspective on a couple of things that obviously you haven’t prepared for.
41:25 — Lara Druyan
Ok
41:27 — Aakash Shah
So the intent is to kind of just have like very quick answers, just like a word or two and yeah, hopefully it gives us some unique perspective on you, so let’s go.
One Product, you can’t live without
41:48 — Lara Druyan
My temper-pedic mattress.
41:54 — Aakash Shah
Your favorite apps that not many people know about
41:57 — Lara Druyan
Haiku deck, it is actually a life-saver for me, for creating presentations, because it limits sort of, if you will, a little bit of the formatting that you can now export to editable power point.
But it enables you, if I’m speaking, I can type in Marc Benioff, and I’ll get an image of Marc Benioff. Or when I presented to the University of Michigan about how venture capitalists see you, I sort of had a slide that said, “portrait of an investor, a visionary sheep”.
And the thing was smart and pulled up pictures of sheeps, so it really helps you save time on finding images which most people probably on this call on has noted that’s super time consuming, so I cannot recommend Haiku deck enough.
42:49 — Aakash Shah
Oh, awesome, that’s super interesting.
One thing on your bucket list.
42:55 — Lara Druyan
Oh gosh, Going to Egypt. Never been. It’s on my bucket list.
43:03 — Aakash Shah
Likewise, likewise
Number One productivity habit or hack?
43:11 — Lara Druyan
Great question.
I’m not always good at this, but I really try to touch the same email or something only once.
43:22 — Aakash Shah
Mhm And that’s like what Cal Newport’s ethos effectively.
I think I’ve tried doing the same and it’s really helpful.
One thing you have been licking about this lockdown
43:35 — Lara Druyan
Spending more time with my family, although since I have twins who are 15, my guess is they don’t view that the same way
43:48 — Aakash Shah
mhm It’s it’s all right, as long as it’s one way.
43:50 — Lara Druyan
Yeah, exactly.
It’s sort of lining for me, just not sure
43:53 — Aakash Shah
I’m sure they feel the same.
Would you rather have money or influence.
44:08 — Lara Druyan
Well, that’s a great question.
Sadly, I think they’re very related, I think influence is something a lot of people buy through money, but I probably would rather have influence.
44:19 — Aakash Shah
Likewise.
Favorite podcast.
If you listen to podcasts.
44:26 — Lara Druyan
Oh I do, I love the Daily.
I listened to that pretty religiously.
I love Pivot with Scott Galloway and Kara Swisher.
And although this is not a long-term podcast, but I cannot encourage people enough to listen to an uncomfortable podcast by a Serial called Nice White Parents.
44:50 — Aakash Shah
Yeah, wow.
Yeah, I’d love to check out what that is
Most inspiring person for you in Business or Tech today?
45:03 — Lara Druyan
That is a great question.
Seth Klarman, he runs, a post group in Boston.
He’s considered to be the second most important or, second best value investor in the world behind Warren Buffett.
I happen to know him personally.
I’m lucky that way is a connection made through my husband’s and he is, an extraordinary person.
Not only because he’s produced amazing returns over, you know, since he started in business in 1982.
But because he is one of the deepest thinkers I have ever met.
I guess in Tech.
I probably have to say Reid Hoffman
45:46 — Aakash Shah
Awesome.
There are only three more, actually.
Best industry to work in right after college.
45:54 — Lara Druyan
Oh gosh.
I think, I, I actually think if I were right after college, working in whether it’s Tech or Biotech, I would try to do that at a company that’s big enough that they actually have systems to train you as opposed to go into a startup where they just show you the deep end of the pool and wish you luck.
46:16 — Aakash Shah
hmm.
I guess on that note, this is a little bit of what do you, what do you think about
And I know you’re associated with HBS.
But what do you think about entrepreneurial programs at Schools or Universities?
Do you think that is the best way to become an entrepreneur or, I mean, I guess just in general, what do you think about them?
46:39 — Lara Druyan
With all due respect to my Alma Mater and I sit on the Alumni board.
So this is certainly not BS
No, I don’t
I don’t think, I mean every, I’ve talked about this before, right?
This view that you know, pretty risk adverse people go to business school.
I think that’s right.
I don’t think going to an entrepreneurial program.
I mean, in fact I do that as a bit of an oxymoron.
I don’t think you want to do that.
If you really want to become an entrepreneur, I would do what I said, I would do that after college.
If you say you’re really interested in computational biology, join a big company that’s you know, touching that space and go learn something
You want to do something in enterprise whether it’s SaaS or whatever go to Salesforce but, it doesn’t need to be that big, but go learn something and then you know, hopefully you’ll meet other people who share an idea.
I don’t think you learn to be an entrepreneur at any particular program.
I think you learn about, you know, market needs and what functional skills are necessary to succeed in a given industry,
And you know, unless you’re struck by lightning and decide you’re going to do the next Snapchat, in which case other parents of teens and I will not be your best friends, but you know, have at it.
47:59 — Aakash Shah
Yeah. Yeah.
No, that’s true.
I mean, what do you, what do you think about the, the view that look, I want to start something, but I’m going to HBS or Stanford GSB to meet my co-founders effectively.
I mean it is a melting point to a certain extent of people with similar backgrounds, but like you said, they also have that certain characteristics, not just going out and doing it.
And so there is that sort of risk adversus, so do you think that’s a valid view or even that you can kind of just get it from operating in operating environments?
48:34 — Lara Druyan
Well, I’m going to speak here about just sort of traditional Tech companies and quote Dave McClure, who, I think he has a really beautiful quote.
He said, “to start a company today, [this is going back 10 years, but it’s still true today] you need a huckster who is typically the CEO, you need a hacker, obviously the CTO and you need a hipster who is the design person”
You’ll meet lots of hucksters in business school, it’s pretty unlikely you’ll meet a hipster or a hacker.
So I would say if that’s really what you’re looking for, that’s probably not your best stomping ground.
You’re probably better off spending time in the D-School or the engineering school.
49:13 — Aakash Shah
True.
Yeah. I guess two last questions here and then I’ll kind of see if there’s anything from anyone else
Best thing about being a mom.
49:27 — Lara Druyan
Oh my gosh.
The best thing about being your mom is you hopefully are taking part in the development of just two of the most amazing people I know.
It’s a really an indescribable experience.
49:52 — Aakash Shah
Yeah, interesting.
And yeah, I mean, like many people have said it’s very hard to actually convey to people that don’t have kids, for instance, what that feels like
What’s something you learned from your kids?
50:07 — Lara Druyan
Oh God, I learned about Discord through my kids.
Yeah I learned about all kinds of new music through my kids.
And sadly, because my daughter is in 10th grade, I’ve learned how stupid I’ve become.
She’s taking a micro-econ class, the study class which actually happens to be my major from the University of Chicago, which is often thought to be a reasonably good school for the subject.
And she came back and said, “oh, I’m running these simulations about the prisoner dilemma introducing noise, meaning your opponent, may have made a mistake. How do I come up with a winning strategy?”
I’m like, huh?
So, Oh, I’m sorry and you’re doing this as a 10th grader.
So I’ve learned that, you know, knowledge is fading.
51:04 — Aakash Shah
Wow, that, that is a very interesting twist to what we had as well as the classic sort of prisoner’s dilemma.
How do you basically come up with the right decision based on expected probability?
Super.
That was kind of fit on the rapid fire.
Anyone in the audience feel free to kind of ask questions.
This is one of the managing directors at an early-stage venture fund and we run a company called NeonVest in New York
But otherwise, Lara, it was great to speak with you, Great to have you on and thanks a lot for taking the time here.
I think these are some really interesting perspective and insights and hopefully people learned a lot from it.
51:58 — Lara Druyan
It’s really my pleasure.
It’s great to see everybody.
52:02 — Aakash Shah
Great.
Thank you Laura, great to speak with you and look forward to having you add a lot of value to NeonVest’s entrepreneurs.
52:12 — Lara Druyan
Oh, that’s great.
You know, it’s true.
I mean I know you guys provide a really valuable service to the entrepreneurial community and so, it’s been a privilege to be part of your platform from its early days, so, well, thanks to everybody for for joining us.
I really appreciate the opportunity, Aakash and Surya, so thank you.
52:36 — Surya Viswanathan
Thanks Lara.
52:38 — Aakash Shah
Thank You. Great to have you on.
Everyone has a great rest of their Thursday
52:41 — Lara Druyan
Cheers Everybody.
