Many first time founders set out to raise capital - whether from friends and family or angel investors and seed stage VCS - unprepared. Learn the keys to getting yourself and your business investor ready.
Many first time founders set out to raise capital - whether from friends and family or angel investors and seed stage VCS - unprepared.
Allie Burns from Village Capital shares the keys to getting yourself and your business investor ready.
As CEO of Village Capital, Allie is responsible for overseeing her team of “rabble rousers” who are dedicated to creating new opportunities for entrepreneurs who have been traditionally overlooked by early stage investors.
Prior to joining Village Capital, Allie spent seven years working directly with technology pioneers Steve and Jean Case, supporting their work in venture capital, philanthropy and impact investing. As a senior executive at the Case Foundation, Allie was responsible for oversight of the organization’s communications, marketing and partnerships functions.
Watch the full session: https://bit.ly/3v8bjK6
Blog post: https://bit.ly/3fPPJFe
Have feedback? Connect with Scott Case on LinkedIn
Visit foundersfocus.com to join the live video sessions, watch past sessions, and see what topics are up next.
Scott Case 0:00
Welcome to Founders Focus, a podcast made for founders by founders. I'm Scott Case, CEO and co-founder of Upside, and I created Founders Focus to help share free resources and actionable advice. Together, we're building a community for business leaders, entrepreneurs and founders to come together to tackle today's challenges. This podcast is powered by my awesome team at Upside. Please visit foundersfocus.com to join the live video sessions or to catch up on past topics.
Scott Case 0:28
Without any more preamble from me, I'd like to introduce Allie Burns, who is the CEO of Village Capital. And today we're gonna talk about investor readiness. But before we wade into that, Allie, why don't you give us the brief introduction of yourself and your overview? And then we'll dive into your own founder journey and your entrepreneurial journey.
Allie Burns 0:50
Sure. So as Scott said, I'm Allie Burns, I lead Village Capital. The simplest way of describing the work that we do, which I know we'll get into more, is that we are both an accelerator and an investor in seed stage impact driven ventures. We're really focused on entrepreneurs who are solving challenges and economic opportunity and sustainability of people and the planet. And we work both in the US, as well as in Latin America, as Sub Saharan Africa, South Asia, and I'm forgetting a geography somehow here, but we'll get to that, I'm sure. But we're working in Europe, I apologize, that's the newer geography for us, and we're seeing some exciting trends there.
Scott Case 1:32
So the only candidate left, I think, is Antarctica. Otherwise, you're pretty much everywhere.
Scott Case 1:39
Well, so how did you end up as a CEO of Village Capital? Tell us about your journey to get there, and it's littered with entrepreneurial experiences and working with a bunch of lunatics, including me?
Allie Burns 1:55
Well, I will try not to take up the whole 40 minutes on just this question and say that I have had a pretty unconventional path to being where I am today. The first decade of my career or so was spent in a more traditional corporate communications role, working really at the outset of my career, largely venture backed companies at the sort of height and burst of the .com bubble of the late 90s, early 2000s. And then sort of moved into working with more traditional larger technology and media companies, which led me to two things. One, having sort of my own reckoning of where was I going with my career, and really wanting to do something that had more meaning, and where I could actually see the impact of my work.
Allie Burns 2:47
And the second was really a shift to recognizing what my passion was. And in 2009, I had the privilege of connecting with the co-founder of AOL, an early executive of AOL, Jean and Steve Case, and starting to work first for their family foundation, which is where you and I met Scott and doing a work a lot of work at the this really interesting nexus of supporting entrepreneurs and entrepreneurship, supporting the field of impact investing, Jean and Steve were doing their own direct investing in impact driven companies and funds. And then this sort of third bucket was really around the traditional, it's sort of having a front row seat to the growth of the traditional venture arm of Steve's work and starting at Revolution when the firm was just making direct investments in sort of developing companies, and then really helping to build out sort of a multi tiered set of funds at Revolution. So through all of that, I recognized that my passion was really at the intersection of impact investing and startups, met the co-founder Ross of Village Capital was really inspired by the work that Village Capital was doing, and just a little less than five years ago joined as COO first and then became CEO in 2019. So it's been a fun journey so far.
Scott Case 4:16
And you came in as a CEO in 2019. And then 2020 happens, which must have added to the excitement for your time.
Allie Burns 4:27
A lot of growth last year, a lot of growth.
Scott Case 4:31
So I want to dive in. We set the topic here as investor readiness, and we have a lot of entrepreneurs that are often considering, seeking capital, the capital that most people hear about is venture investing and venture capital, which is, I often equate to, you can be an athlete or you can try to be in the NBA, your odds of getting venture funding can sometimes feel like you're going for the NBA. There's other ways to get to the top of the mountain that you're trying to climb. So why don't we just talk a little bit about your experiences, both at Revolution and then at Village Capital about venture capital to start and sort of who it's most appropriate for? And then we can dive in and talk about other types of financing and how you've been evolving your thinking at Village Capital?
Allie Burns 5:24
Sure. So yes, at Village Capital we have traditionally focused on, as I mentioned at the outset, this sort of generic term impact driven seed stage entrepreneurs, and we're specifically looking at companies who are following a high growth trajectory. So we provide investment readiness training for those companies and then financing at the end of the acceleration process. We have this pretty unique approach to investment decision making, ask the entrepreneurs to put an investor hat on and actually make an investment decision for us. We call it peer selected investment. And there's a whole framework and process around it. But we're really looking for these high growth companies who fit the sort of traditional you can generate market rate returns and have significant impact as well. That said, to your point about sort of evolving thinking, we recognize that entrepreneurs come in all sorts of flavors and potential trajectories for growth for the business, and as we've worked with sectors that are continuing to evolve and emerge, that we shouldn't just be looking at high growth companies, we should be thinking about what is the spectrum of growth, where being investor ready can be helpful, but it doesn't necessarily mean that you have to take on traditional venture capitals. I can share a little bit more about that, and some of the other organizations we're working with on that as well.
Scott Case 6:55
Alright, so let's take the venture route. When you start through your accelerator, a big piece of it is getting the company investor ready. Talk a little bit about what the components of that are. What are the big buckets that you're looking for for the company to be ready in your estimation?
Allie Burns 7:17
What we do is provide the companies with an investment readiness framework, and it's called Venture Investment Readiness and Awareness Levels. The acronym is an unfortunate acronym for the time that we're living in viral. But it is a framework that is based on something that NASA uses to decide what innovations that they should invest in, called technical readiness levels. There are a lot of other organizations that use this. I think Steve Blank has talked about this in the past as well. But what we've done is built that framework to help entrepreneurs understand what are the milestones at each stage in a series of categories that an investor would be looking for? And how do you actually evaluate your business based on those categories? So we have eight levels of investment, nine categories, those categories are team, vision, product market fit, all of the things that you've talked about in various Founders Focus sessions. And the levels of investment readiness are everything from – so number one would be I'm just getting started, I am figuring out how to get the thing going whatever way I can, whether it's bootstrapping, or friends and family, and then sort of the highest level is major exit or acquisition, there can be an exit, of course, along any of those, and it's not good or bad, it's just where you are, so that the entrepreneur has a better sense of how an investor might look at their company. We provide them with that framework to really, again, understand their own business, but as well as the business of their peers. And that's really where the magic of the peer selection process starts.
Scott Case 8:52
So is that viral framework broadly available? Is it proprietary?
Allie Burns 8:59
It sure is broadly available. We've actually built it into a tool that is fortunately not named viral. But it is the framework for a tool that we have called abaca. And the website is abaca.app. Any entrepreneur can go on the website, answer a series of questions, again, in those categories of team, their vision, product market fit, to get an assessment back to them on where they are on that investment readiness scale, and feedback on the milestones that they mean may need to hit in order to be ready for the next level of investment. And the purpose of that is to help not only companies but investors speak the same language. So when entrepreneurs and investors are sitting across the table, oftentimes an investor doesn't actually know how to articulate Look you're not a fit for investment because we're looking for companies that have hit this particular milestone, so it gives them a common framework to be able to speak from. But that online tool is available to get just the feedback on where you are according to scale for anybody to use.
Scott Case 10:03
I do find it interesting and important that there is a match that's happening between a company and a venture investor. And it's happening on lots of levels. But one of them is we invest in these kinds of companies at this stage. And I find very consistently talking to founders who are like, I can't get my financing, and I'm like, Well, tell me about what you've done. And they're like, well, I've talked to these five venture firms – well, they only invest in series A Series B, and you're like pre seed right now. So they're gonna be very polite to you, but they're not going to invest, right? That's just not where they are.
Scott Case 10:40
So how do you use that tool when it sort of pops out? What's the strategy then if you know what level you're at, to understand how to profile, let's say, you do seed stage investing, how do you express what that means for Village Capital? And obviously, you have the impact side of it, but the rest of your investment criteria is very similar. How does an entrepreneur go about kind of read the tea leaves there? Or what questions might we ask to be smarter about knowing that we've actually got a shot with a given VC firm?
Allie Burns 11:18
Yeah, I mean, and maybe I'll take a step back and say, one of the mistakes I often see and you were you were alluding to this as well that entrepreneurs make is to just reach out to a whole bunch of investors, because they may have invested in a company that at some point was in a similar sector, to the work that they're doing, and sometimes don't do the research to really better understand at what stage they are investing, what their broader thesis is, sometimes that information isn't available, but sometimes it is. And the more you can hone your list to the right people based on the information that is available, the more impactful results I think you're going to have.
Allie Burns 11:59
And investors are always looking to meet companies, even if they're not going to invest right away, they may want to follow you along your journey. And it's good to come with a series of questions to better understand what their investment thesis is. So the hope is that that framework also provides an opportunity for entrepreneurs to ask very specific questions on what are you looking for when you are looking for an all star team to invest in? What are you looking for in terms of traction in product market fit? Where are you looking to better understand how we've validated our vision? For impact investors, in particular, there's always questions around like, how are you thinking about impact? How are you measuring impact? So being armed with those questions when you go into a conversation to better understand, is this an investor that you're going to stay in touch with maybe for the longer term? Or am I going to really spend more time trying to actually engage in a conversation about putting capital into the company right now?
Scott Case 12:58
If you had a single piece of advice or a question to ask as an entrepreneur doing that research and doing the homework to be able to come, if I only get one question I get to ask in an email that I send to an investor or if I bump into them in a live event, what is it? Is it tied to where you are the stage? Is there something specific that says, this is where we're at? Talk a little bit about that opening question or that opportunity to get a little bit of signal early?
Allie Burns 13:36
That's a great question. I don't know if there's one magic question. But something that shows that you have done your research. So if for example, the reason you're reaching out is because they invested in a company in a similar space, ask about that company – hey, I saw you invested in such and such company, can you tell me more about where they were when you decided to make an investment? They may not be able to provide you with like specific details on the company's revenue or some of the metrics, but they're going to appreciate that you did the research and try to provide enough information so you understand and are able to articulate yourself in the framing of what they're looking for, if that makes sense.
Scott Case 14:22
Absolutely. Look, I think that's critical. And it's not just doing the homework. It's that it's current. I've worked with venture firms that when they were on their first fund or their second fund, they were investing in pre seed or seed stage companies, they're own fund four and they've moved up market, and so the fact that they made a seed stage investment 10 years ago isn't relevant anymore. So staying current and being relevant, and then also, ideally even where your business fits relative to that investment, say, Well, I know I'm two steps from that, but what are you looking for, even if it's longer term. Because as you pointed out, investors want to be talking to companies that could fit their model in six months or a year or two years.
Scott Case 15:06
So we've got a question here that I want to pick up, because it's in your sweet spot, it falls into the softball category. What's the difference between impact investors and more traditional investors? So if you're a fin tech investor, you're obviously looking for whatever levels of growth and it's within the financial industry. So is there something different that you're looking for as an impact investor? And if so, what is that frame?
Allie Burns 15:34
It's a great question. And I'll answer it from the Village Capital point of view, and then maybe talk more broadly. From the village capital point of view, we look at impact as, what is the problem the company is trying to solve? And is it actually bringing more opportunity to people or organizations that have traditionally been left on the sidelines? So we look at two buckets as I mentioned, economic opportunity, so financial health and are you helping to not only bring people into the financial system to help them live better lives, but are you actually helping improve their lives? And then the second is future of work and learning, and how are we bringing workers into the next era of work? Are we upskilling, reskilling? What's credentialing look like? What are alternatives to traditional education look like? So those are two in economic sustainability. Economic opportunity.
Allie Burns 16:33
And I talk a lot about sustainability of people and the planet. And that's giving people access to health care and health systems, as well as intersections of climate and innovation where venture funding makes sense, which is a little bit nuanced. So we've done a lot of work in the transportation energy nexus. And we're looking also at sustainable food systems as well. So that's how we define the impacts that we care about, and that has evolved over time.
Allie Burns 17:06
More broadly, the definition of what's the difference between an impact investor and a regular investor is more nuanced, because people define impact differently and have different sort of spectrums of return. When you think about the spectrum of return for a financial return versus the spectrum of an impact return, there can be investors who are like, I care so much about having maximum impact and I'm not as interested in the financial return, like if this company returns any money at all, if I just get my investment back, I'm cool with that. And there are other impact investors who want to see both maximized, so it can be nuanced. And that's where research again and asking those questions. If someone self identifies as an impact investor, ask them a little bit more about what that means to them. What is the impact they're looking for? How does that balance with the financial returns they're looking for? Because there are so many different approaches to impact investing,
Scott Case 18:05
I'll put a fine point on it. Just like there are investors that invest in specific sectors, at specific companies stages, impact investors do the same thing. So there's another layer there. You focused on a handful that Village Capital has identified. And oftentimes, especially at the state of most impact investors, it's usually even more narrow than what Village Capital does, it's, you know, we're looking to impact this specific either population or some component of climate change, so it could be clean energy. So you want to really do your homework on that if you're aiming towards a mission orientation.
Scott Case 18:46
The other thing you'll look for, and Allie framed this a little bit, is what you're measuring is in addition to financial, there are other sometimes they're called double or triple bottom lines, there are other stakeholder metrics that matter that you're also trying to drive. And they can be very different depending on who you're looking for. So if you're going to do a route where you're doing a social entrepreneurial adventure, you for yourself just need to be clear about how you're going to be successful if that's part of the mission of the company.
Scott Case 19:19
I want to drive a couple of other questions that have popped up. But I first want to understand a little bit about something that you said earlier about. You call it peer investing, but talk a little bit about wearing that investor hat. If there are three things that somebody could say, Okay, if I'm going to put on an investor hat, here's the three things I need to think about or whatever the number is, where do I start?
Allie Burns 19:55
First of all, I'm going to caveat that, I'm going to answer this from the perspective that I have as someone who works with very early stage companies. So I'm going to start with the category of team, I want to understand who is the team or who is the founder or co-founding team. And if I'm the entrepreneur, I'm looking at myself and where are my blind spots or weak spots that I'm going to fill in with another great co-founder or early hires? And I want to be able to answer that question very clearly when I'm talking to an investor. So team is one hat.
Allie Burns 20:38
Vision is another. And this sort of relates to the question around, should you be pursuing VC funding? So what is my vision? What is my long term vision? And how does that translate into the potential size of the company that I'm trying to build? And there's nothing wrong with building a more modestly sized company, not every company needs to be a $100 billion company or $100 million company, not 100 billion either, $100 million companies, sorry about that. But what is my vision? Is it clear? Can I articulate it? Can I articulate it to a set of my, again in the peer process, a set of my peers? And if I can't do that, then it's going to be hard to do so for an investor.
Allie Burns 21:25
And then the third piece that I would be thinking about, and I know I've kind of repeated myself here is like, how am I going to show product market fit? What are the metrics that I need to hit in order to make an investor feel confident that this is a good investment for them and this is a company that can ultimately, if you're again pursuing VC, scale pretty quickly. And so those are the three categories that I would start with in the framework that we use.
Scott Case 21:57
I love that you started with team. I think people underestimate, especially with very early stage, we have a lot of solopreneurs, we have a lot of people with side hustles. This is a team sport. And you really need to make sure that you have a quality team around you or plans to bring one together because the vision is nice, but if you have no way of executing towards it, congratulations you have a nice vision. So it's an important piece of that puzzle.
Scott Case 22:26
I want to talk a little bit more about product market fit. It's like this elusive thing. So can you give an example of a company, whether you name it or not doesn't matter, but where you feel like came into Village Capital or the experience where they were on the border of product market fit? And what was the big switch that happened for that company? It's always helpful to give an example if you can.
Allie Burns 22:53
This is a company that's been on my mind lately. Full disclosure, the founder is also on our nonprofit board, so I've spent more time with her. This is a founder in Nigeria, co founder of a company previously called piggy bank, and it's now called piggy vest, and came into the Village Capital program with an idea to create essentially a micro savings app targeted at Nigerian millennials, specifically who didn't necessarily have access to the financial system or to build the savings to help them build generational wealth. And the idea was to build a platform that allowed these micro savings to essentially be incentivized to stay saving. So there's a penalty if you remove your money from the account, and you're signing up for this because your goal if you're a customer. They came in with a basic concept of what this could look like and were one of the earlier companies in the FinTech program we were running in Africa at the time, and using the mentor opportunities that they had, using the the frameworks that they're given through our curriculum, they were able to create a framework for customer discovery that allowed them to prove out the fact that people were willing to actually put money into accounts and into accounts where they couldn't get the money out unless they paid a significant penalty. And over the three months of the program, they were able to build up enough of a pilot to prove out that this was an idea worth pursuing. And, they won the peer selection, even though they were one of the earlier companies in the cohort, so now they're going gangbusters. They've actually shifted their model a little bit, so the goal is still savings for millennials, but they're actually providing also investment opportunities. So not only helping people save money, but grow their money, and providing an alternative to a pretty messy financial system that exists in Nigeria and West Africa more generally. So they're doing really well, but they needed that time that they went through in the program to get there.
Scott Case 25:16
So I love that story. And I'll point out that the process whether you happen to be an entrepreneur in Nigeria or in Nashville is pretty much the same.
Scott Case 25:26
So talk about "enough," they had three months, how many customers, right? or How many did they have and how long did they stick around? Are we talking about 10, 100, 10,000? Just orders of magnitude would help because I think people don't fully appreciate sometimes that it can actually be a lot smaller than you think. But tell us a little bit about that.
Allie Burns 25:48
Yeah, I'd have to go back to the founder on the exact numbers, but it was closer to the dozens than the 1,000s. Because this was an initial pilot, they used the program to run a pilot for the product that they were developing. So we're much closer to the dozens, and that was enough. I didn't make the decision to write the check or Victoria who runs our funds didn't make the decision to write the check, but this was enough traction for the entrepreneurs who were sitting in the investor seat to say like, this is what I want to see and this is what I need to make me feel comfortable with this being a good investment. And so it can vary in different sectors. You know, of course, if you're looking at a different type of business model, you may need 1,000s. So I apologize for avoiding the answer a little bit, but it's really hard to say what an exact number would be for an investor to feel confident that there's product market fit, because it's very different in different sectors and different stages.
Scott Case 26:54
Absolutely. And I do think that B2C, an e-commerce play, a SaaS business, the business model plays a big factor into it, who your customers are, your go to market. I posted an article that we published in Forbes a few months ago about experimentation and laying out a framework for where you start. Certain investors are going to want you to be further along that ladder than others and the different stages.
Scott Case 27:24
So I want to dive in, a couple of questions have come up. Besides capital, as an investor yourself, is it reasonable to expect you as an investor to make introductions to your other portfolio companies if there's a reason to? If there's an opportunity for co-marketing or engagement, is that something you should expect from most investors?
Allie Burns 27:50
I think it's absolutely reasonable. It probably is a bit dependent on the investor and their capacity, frankly. So if we didn't have the accelerator side of our work, our fund would be one manager with two staff members managing 100 plus company portfolio, so she's probably not going to be able to have a lot of time to make introductions. But that's part of why the mission side of the organization exists for us. And for larger funds who have larger staffs, I think it's completely reasonable to expect that they can make introductions. If they're excited about what you're doing, again, investors talk to companies in part because they are looking for a pipeline today to write checks today, but they're also trying to keep an eye on what's happening and what's coming in the future. And so most people are really sincere when they say how can I help? And I think it's a totally reasonable ask at least to say if someone says no, it's okay to say, well, who are three other people that I should be talking to? And those three other people might not be investors, they might be the portfolio companies or otherwise, but if they're excited about what you're doing, they'll probably be willing to make introductions.
Scott Case 29:08
And by the way, if you're in the portfolio, you're even more likely to get that introduction, because most investors want to see collaboration and support among the portfolio as well. So it's completely reasonable to push there.
Scott Case 29:23
What's the number one mistake you see founders make when they show up to pitch? So they've gotten the meeting, it's time to share the big idea with either a partner or the partners, what's the thing you see that is the number one mistake you witness and how do you mitigate it?
Allie Burns 29:49
I'm sure not everybody operates in the same way, but I think just launching straight into the pitch and not asking a few framing questions first. So this is why we do the work that we do to try to help entrepreneurs not only understand how an investor might be looking at their business, but what questions they can ask to actually better understand how to frame their pitch. You don't necessarily have to go through your pitch the same exact way every time. Know your audience and asking those questions helps.
Scott Case 30:21
I love that knowing your audience, it comes back to doing that research, too. I have been in meetings where the founder has been absolutely 100% determined to go through all 23 slides of their presentation no matter what has happened, even to the Hey, we're ready to invest on slide five and they're like, nope we have many 20 more slides to go, we are going to go through all of them. And I've also been in situations as a founder pitching where I thought I was going to present and it became very clear very quickly that the partner had no interest in that they wanted to just talk, and never bothered to turn on the screen, didn't open the laptop. So just playing off of that a little bit, it's not so much on the risk or mistake side, but you said it read the audience, understand where they're at, and they might be in a different place than you thought when you show up. So be ready to navigate that. And also know your circumstances, it's a little bit less that way right now, but you're on a zoom meeting is a very different thing than if you're in person than if it's over a meal. If you've ever had to pitch over lunch, boy, that is a very different experience than figuring out how to do it in a board room somewhere.
Scott Case 31:34
You talked a little bit about the different types of capital. I'd like to wade in a bit. We spent a lot of time talking about venture. There's other ways to raise capital. And you've spent a bunch of time thinking about that. Talk a little bit about how you're approaching that aspect of it, where Hey, we're not funding a unicorn that's super fast growth, but these are important, valuable businesses.
Allie Burns 31:59
I can talk a little about how we are thinking about that at Village Capital, and also another organization that we've been working closely with at Vil Cap. I think the series of questions that an entrepreneur should go through when they're thinking about outside capital is, number one, do I actually need funding outside funding at all? Is there a way I can get this business to profitability and the growth that I would like to see in this business without taking anybody else's money? That's a very privileged position to be in. So I recognize that but I think sometimes entrepreneurs can skip straight past that question because the allure of venture capital is so exciting, but it's important to remember that venture capital gets all of the headlines, but the reality is it's a very, very, very, very, very small percentage of early stage financing, and that bank loans are still a really important source of financing and that there is an emerging class of investors who are thinking about alternatives to traditional venture models.
Allie Burns 33:04
One of the big areas of momentum is around revenue based financing. So how do you get a company to again to sort of profitability and growth that allows the company to kick off revenue as part of a return to an investor, but doesn't give up as much of a stake in the company, allows you to retain more control in the company, and maybe grow a little bit more slowly? So we've actually done through our own fund a couple of revenue based financings that have had, frankly, mixed success, some have been very successful, others have not been so successful. And that really depends, again, on the company's growth trajectory, did they want to just keep investing as much as they're making back into the growth of the company and get that hockey stick moving as quickly as they can? Or are they like, we're really comfortable going on a normal diagonal line.
Allie Burns 33:57
So that's something we've been thinking about as we build out our curriculum to better educate entrepreneurs, even if you think initially, I'm looking for venture, are there other paths? Do I need to be a unicorn? And that leads me to one of the other initiatives that we've been affiliated with is an organization called Zebras Unite, and Zebras Unite came out of this manifesto that four amazing women wrote about five years ago, that called into question the idea of the unicorn and said companies can come in all shapes and sizes and growth trajectories. And what if we thought about zebras, these are companies that want to grow comfortably, that want to be part of their community that want to better understand what stakeholder capitalism really means, and who are all of the stakeholders that they're thinking about. And that's a movement that has gained a lot of grassroots support. And as entrepreneurs realize that there are other paths and that the unicorn path may not be the most constructive for a lot of companies. And in fact a lot has been written about the destruction of some companies, because they tried too hard to get too big too fast. So I'll pause there on those.
Scott Case 35:14
Look, it's a big part of it. And we posted the Zebras Unite website in the chat, so if you want to check that out. I have made the mistake of trying to grow too fast in businesses that I've started where the allure and the drive to grow, and you're not ready, maybe you haven't got all the way through the product market fit that you needed and now you're forcing this action that isn't the right thing.
Scott Case 35:38
And then the other part about taking on venture capital is that once you're on that train, it's very hard to get off of it, you're typically not only giving up percentages of the company, but you're sort of forced to drive growth almost above all else, and certain types of businesses don't need to get there.
Scott Case 35:57
And then the last thing I'll comment on about it is, the vast majority of businesses in America are not high growth companies, like 95% of them. And so recognizing that it's much more likely that you're building a business that's a really solid, strong business, and that employs people, it drives our economy along, so we celebrate these unicorns, but zebras are great and they add a lot of value.
Scott Case 36:26
I want to round out, we've got another minute or so. You talked a little bit about this. But as you look at the overall market, there are a number of of classes of founders that have received a disproportionately small percentage of investment, particularly women and then you break it down people of color, whether it's black and brown, and if you happen to be a woman and African American or black, are you seeing any big changes, either within Village Capital or across your peer set, where we're actually going to do something different because this is not a new topic? You know, 10 years ago, we were talking about this in the Startup America environment, so are things really changing or what's going on?
Allie Burns 37:23
I'm glad you asked the question and pointed to the work that we did together at Startup America. Because the pace of change has been agonizingly slow slash non existent. When I think about 75% of venture capital is concentrated in three places, it's still 75% of venture, I don't know what the 2020 numbers look like yet, so I think maybe it will be better, but not seeing that change has been frustrating. On the flip side, I do think 2020 was sort of a watershed moment for people to recognize not only the massive disparities that exist in financing macro, economically, too, but in financing entrepreneurs, but that we cannot quote unquote build back better if we do not have all of the people who can build in the system building new innovations. And so when you look at the number of new funds that have emerged in the last 18 months that are focused specifically on traditionally marginalized communities, BIPOC communities, women founders, I'm really encouraged by the movement. And I believe we will see the numbers moving in a meaningful way over the next couple of years. I think we really had a moment and I hope I am right. And I'm very optimistic about that.
Scott Case 38:48
Well, I am too, I do think that we're going to need to keep the pressure on, because otherwise is not going to happen.
Allie Burns 38:55
100%
Scott Case 38:56
We had a question, I tried to answer in the chat, Andrei, if you want to talk more about it, grab some one on one time with me, I'm happy to talk about the difference between founders who have a successful history and those that don't, there is it there is a difference there for a bunch of reasons. And the probably the biggest one is Allie already said, which is the team – you as a founder or be component in that team, and if you have a bunch of experience, you're just more likely to be able to get the results that you want.
Scott Case 39:21
So with that, Allie, what's your big piece of advice for this group if you're thinking about raising capital, what's your leave behind here for everybody?
Allie Burns 39:32
Well, shameless plug to use abaca to better understand where you are in the investment readiness scale. But also, I'll just reiterate the advice I shared before, the more research you can do to try to understand who you're reaching out to, the better more impactful results still see.
Scott Case 39:50
Awesome, well, if you want to learn more, you can just google Village Capital, we'll post some links as well. And Allie, thank you, thank you, thank you, as always fantastic and really appreciate you taking the time with us.