"All of us have to win for any of us to win"

What It's Really Like to Break Into Venture Capital

Introducing Invested: Uncensored takes from within the inner workings of America's prestigious venture capital firms. Our inaugural article features Sydney Thomas of Precursor Ventures.

Welcome to Invested, Supermaker’s new series featuring uncensored takes from within the inner workings of America's prestigious venture capital firms. Invested is led by Leah Fessler, journalist, investor, and Head of Editorial at Chief, and Alex Marshall, a venture capitalist focusing on special projects at First Round Capital, and co-founder of HealthIQ.

Press frequently highlights partners, the highest-level managers at American venture capital funds, but we rarely hear about the people they work alongside—the employees who, more often than not, do the grunt work to make deals happen. These analysts, associates, senior associates, principals, entrepreneurs-in-residence, talent scouts, and platform operators usually do not receive “carry,” which means they do not directly financially benefit when a portfolio company gets acquired or IPOs.

What’s more, very few funds directly promote associates, senior associates, and principals to partner. Anyone familiar with the VC recruiting process has heard the line “this isn’t a partner-track position” more times than they can count. Associate roles are generally understood to be two-year positions.

Given carry and partnerships are the primary financial drivers for people inspired to get into VC, you wouldn’t be crazy to question why non-partner VCs do what they do, how they advance, and what their day-to-day actually looks like. I certainly held these questions when I made the jump from working in journalism to working in VC and early-stage startups.

Thankfully, the future is bright. The next-generation of leaders in VC are far more diverse than tech and VC as we know it, representing inclusion and equity among different genders, races, geographies, socioeconomic backgrounds, sexual orientations, and more. These VCs are committed to finding, funding, and building progressive companies committed to inclusion and change. Hearing from them should change your perspective on tech’s future for the better, and there’s no one better to start with than Sydney Thomas.

Thomas is presently a Senior Associate at Precursor Ventures, the early-stage fund based out of San Francisco and run by Charles Hudson. Precursor is three and a half years old, and recently closed its second fund, with $31 million in capital commitments, as TechCrunch reports. Precursor’s now-three person investment team has closed over 75 investments, and Thomas has been along for the entire ride. Supermaker spoke with Thomas to learn about her role, responsibilities, and vision for change in and beyond Silicon Valley.

Name: Sydney Thomas

Job Title: Senior Associate

Age: 31

Education: UC Berkeley-Haas, Masters of Business. Duke University, Bachelor of Arts

Years at Precursor: Three

Fessler: A lot of people outside VC aren’t familiar how funds are structured, and why. Many non-partner VC employees list their job title as “investor,” which can feel vague and confusing from the outside. What is your job title, and in your own words, what does this mean, within the context of Precursor?

Thomas: My current job title is Sr. Associate. Precursor is a three-person team, and I hired the third person. Charles Hudson started the firm in 2015 and I joined in 2016. I have been a part of pretty much every piece of the organization since then: LP meetings, entrepreneur pitch meetings, founder check-in meetings, fund administration meetings, etc.

Precursor to me feels very much like a family business compared to some other VC firms, which feel more like corporations. There’s not a lot of definition in where my job ends and another job begins, which was extremely anxiety-provoking when I first joined. But as I’ve grown more comfortable with the industry and my expectations for myself, this fluidity now feels very freeing—it’s like a buffet where I get to pick and choose what I get to do each day.

When you were in school, did you aspire to get into VC? Tell me a bit about your career aspirations and what, specifically, made you want to get into early-stage venture.

I am 31, so have had a few careers before VC. When I was in high school, I wanted to be an anthropologist. Then I got to college and realized that career opportunities for anthropologists were too limiting, and at the core, I wanted to understand humans in order to figure out how to make society better. So I then decided that I wanted to be a congresswoman.

After I interned on Capitol Hill with Congresswoman Barbara Lee, I decided that the path to congresswoman was way too long, and I wasn’t excited about being a Legislative Assistant for over 10 years. So I re-evaluated my core aspirations again, and I realized that the main element of society I wanted to improve was the wealth inequality gap. So I decided to try out some other things to get me hopefully to impact that goal.

I moved to New York City after my undergrad at Duke to work on a few projects that the Bloomberg Administration was testing to get at this same underlying goal of decreasing wealth inequality. After working across a few government agencies over five years, I decided that I wanted to try tackling wealth inequality from the private-sector angle.

I went to business school to test out this hypothesis, and worked about five different internships over my two years earning my MBA. I decided that early-stage investing could have the impact I wanted to make on the world. By investing in people and communities who were creating systemic change to address the wealth gap from different angles, I’d get to make the ripple effect I was looking for.

At Precursor, what does your average day look like?

There is really no such thing. Today, I had breakfast to talk personal finance and investing strategies with a friend, then I spent a few hours getting through emails.

For me, getting through emails means reviewing a lot of pitches, doing some follow-ups after a few meetings with fellow investors, making a lot of introductions for people who requested them, and reviewing updates from founders in the Precursor portfolio.

"By investing in people and communities who were creating systemic change to address the wealth gap from different angles, I’d get to make the ripple effect I was looking for."

Later, I had a meeting with our GP and one of our LPs who wanted to go through some of the fund’s numbers. Then I had an intro call with another investor who is in LA and invests in predominately female founders; she was awesome and I’m looking forward to working with her. Then I wrapped up some writing I’ve been trying to get published, did some social media signaling for some of our founders, and reviewed more founder updates.

Later this afternoon, I have my daily one-on-one check-in with Charles, and then have a dinner with some women in finance across different roles (it’s one of the many clubs I’m a part of these days).

What’s your personal strategy for sourcing deals and sustaining a high-potential top of funnel for your deal flow? What are your top tips for effectively communicating the potential of a deal to higher-ups in VC?

My personal strategy is to meet as many interesting and thoughtful people as possible who have similar values as I do. I am always cold emailing people on LinkedIn, answering cold emails, sharing my own ideas with investors who I admire, and refining them accordingly. This has led me to have pretty healthy deal flow, but more importantly, healthy relationships that are based on something other than signaling and status, which is really easy to become beholden to in this work.

I really only have one partner I work with at Precursor so there isn’t much politicking at Precursor, which is probably my favorite thing about this place. I am a straight no-chaser type of person, and navigating politics to get things done makes me crazy.

As the only investor who isn’t a partner (yet!) at Precursor, what does your dynamic look like with your other colleagues? How does hierarchy play out in the actual context of your work, and in the culture of the fund?

Well, there are only three full-time people. Charles hired me. I hired our analyst. So it’s a pretty straight and narrow line which I like a lot.

Members of the Precursor team

A lot of people are interested in venture but don’t feel like they’re sufficiently qualified or connected to “break in.” How, specifically, did you nail your first VC and/or startup role, and how did you get the role at Precursor?

I think the hardest part about “breaking in” to venture is that pretty much everyone is qualified to do it, so the gatekeepers purposefully obfuscate how to “get in.” The advice I tell people—particularly black and brown women—is to find LPs who share your values, and then request intros to the fund managers they back. #OpenLP is a pretty cool resource on Twitter that you can use to trace back to LPs.

I spent most of my second semester of my second year in business school playing “LinkedIn Hustle,” aka cold emailing a lot of VCs on LinkedIn. I will always remember those who responded to me and those who did not, and I think the cool thing about being an outsider to this industry not too long ago is that it has really taught me who walks the walk, and who talks the talk.

"The advice I tell people—particularly black and brown women—is to find LPs who share your values, and then request intros to the fund managers they back."

At the same time of the LinkedIn Hustle, I was planning a conference at Berkeley for Women in Leadership and invited an idol of mine, Freada Kapor, to speak. She responded to my cold email and agreed to speak, and after her talk I asked if she knew of anyone who could help me. She introduced me to Charles, who Kapor Capital had backed. My interview with Charles was basically me saying I’ll do whatever needs to get done, I just want to learn and he hired me a few months later.

What are the top 3-4 tactics/strategies/mindsets you’d advise for people interested in breaking into venture? In your experience, what’s the most-impactful way to position yourself as a future investor, and why?

This is a hard one to answer for me because I think this industry is varied. I call each VC firm a “fiefdom” because I think that each has a really unique set of operating principles driven by the GPs of that firm. Pre-Seed and Seed stage venture requires different skill-sets than Series A-Series B stage, which requires different skillsets from Series C+ stage. So it is hard for me to put together a really succinct set of things one should do for this industry when it is a pretty wide landscape.

It’s no surprise that women and people of color are underrepresented in venture. As a woman and person of color in venture, when have you felt most empowered and encouraged? When have you felt most discouraged or frustrated?

Well, I think I have felt the most empowered and encouraged when I see white women and people of color invested in and respected as a series of constituencies, not a homogenous blob.

If we don’t put intersectionality first and foremost, we will lose. All of us have to win for any of us to win. I believe that in my core. And I think people need to prioritize putting in the work to achieve this goal. The work is not tweeting or taking an “unconscious bias” training. The work is actually much more simple — it’s hiring and investing in white women and people of color and empowering them so that they can be successful.

The thing that annoys me the most is that we are in an industry that cares about the hype a lot. And the thing that frustrates me most is that at times, it feels like the hype matters more the substance. This is perpetuated by the fact that the hard metrics of our industry are very opaque — fund return data, portfolio construction, founder demographics, etc. — so it is hard to track actual progress. I think people should not feel empowered to talk about “the importance of diversity” if they haven’t done any work. They should listen more, do more and talk less.

The rise of All Raise and similar efforts have pumped a ton of new life into the diverse future of VC, yet year to date, the percentage of VC money given to female founders has barely shifted for 2019. As a representative for the next generation of investors, what are your top initiatives and priorities to pave a more gender-equal future for the industry?

  1. Invest in more companies building a more-equitable world
  2. Invest in more black and brown women
  3. Hire more black and brown women

What are the greatest upsides to being a non-partner VC?

Honestly, and this is probably counter-intuitive, but it’s less pressure. Once you are a partner, it seems like people expect you to have all the answers, and be straight and narrow, and be perfect all the time, and say all the right things on Twitter.

"If we don’t put intersectionality first and foremost, we will lose. All of us have to win for any of us to win."

Once I am partner, I will definitely not be this person, but it’s nice to get the chance to introduce myself to the industry as this person who is growing, evolving, and learning and not get the automatic expectation placed on me that I am perfect and right.

Much is said about the importance of relationship-building in VC. As a relatively young person in the industry, what are your best suggestions for developing and sustaining meaningful relationships beyond your own fund?

I honestly think this is overrated. I spent much of my first two years building all the relationships I could, but looking back on it now I think I was actually just trying to build a blueprint for how I wanted to create my own career. What I realized, after all those fifty-eleven coffees, was that nobody was me. Nobody was building the VC career that I wanted because they all wanted something different.

When I finally spent more time with myself, I was able to have much more fulfilling interactions with other VCs and entrepreneurs because I had developed my own true north. So I think the best suggestion I have is [to] stop looking to others for approval and figure out what your mission is.

The second piece of advice I have is don’t stop doing outbound. At a small, really early-stage fund, I feel like I’m drowning in inbound often.

Sign me uppp

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