Interview Investor

Most VCs are Missing Out on this Gold Mine of the 21st-Century

In 2015, Pocket Sun and Elizabeth Galbut co-founded SoGal Ventures primarily to invest in startups founded by women. The move may be motivated by a personal passion to see more women in entrepreneurship and venture capital, but it is no less rational; and it is proving to be a financially rewarding one.

“Venture capital invests in the future of what people use and buy, and who is in the better position to have insights and make judgement of that? Men or women?” Pocket asked her audience at Slush Singapore.

Today, women are controlling US$28 trillion in annual consumer spending worldwide. They are making or influencing 85% of consumer purchase decisions, including 80% of healthcare decisions globally. But does that make them better founders or leaders who can run companies worthy of VC money?

According to a review by seed venture capital firm First Round Capital, female founders’ companies out-performed their male peers’ by 63%; and that their top 10 investments of all time based on value created for investors, three of those teams have at least one female founder — far outpacing the percentage of female tech founders in general.

Jack Ma has also proudly acknowledged women’s role in contributing to Alibaba’s achievements today. Women occupied 24% of the company’s top level senior roles and 33% in management and 47% in overall workforce. Jack Ma found that women are naturally more nurturing, always putting others first, which is the exact quality we need to succeed in the 21st-century for success today depends on your ability to empower those around you.

The evidence tells us that having women in leadership roles is good for business. Yet, only 2.2% of total VC funding went to female-led startups last year. We need not look far to find out why. The VC industry is overwhelmingly dominated by men (94%). It is no surprise that male founders are more likely to be accorded with support and investment simply because, as humans, we prefer to work with people who walk and talk and look like us. Similarity breeds connection.

In addition, a strong majority of the venture capitalists today are trying to steer the future with a mindset that works only in a time long gone. They stubbornly hold on to past experiences and successful models, hoping to find the next Steve Jobs or Mark Zuckerberg. However, the world is changing in an unprecedented pace. If we do not keep up, we may become obsolete.

Pocket Sun and her partner are excavating the gold mine of the 21st-century when no one is paying attention. As pocket said, “If you want a piece of the future, you have to invest in women as your employees, as partners, and as founders. Alibaba knows this and that is why they became rich.”

Pocket doesn’t invest in women just because it is a good thing to do or it makes her feel good. She invest in women because it is a sound investment strategy. “After looking through 6,000 deals for the past two years, we found that, time and time again, female-led startups have better traction, better profitability, better path to efficiency and we can invest at better prices,” she shared.

Since the inception of SoGal Ventures in 2015, Pocket and her partner have invested in 43 seed-stage companies in the US and Asia. So far, 2 of which have been acquired and none of them have died.

“Nobody succeeded because they did whatever the rest of the world did.” — Pocket Sun

Pocket Sun decided to become a venture capitalist because she wants to be the change she wants to see. She wants to have a say in what the future is going be. “We invest in companies that are using innovative technologies to redefine how our future generations are going to live, work and stay healthy,” Pocket emphasised.

“We are not just investing, we are building a legacy. We are constructing our portfolios in a way that we will make the world a better place,” she concluded.

Prior to co-founding SoGal Ventures, Pocket also founded SoGal, one of world’s largest communities of diverse entrepreneurs and investors with 10+ chapters worldwide. She has been featured on the cover of Forbes Asia as a 30 Under 30 in Venture Capital, on LinkedIn Top 10 Voices in VC & Entrepreneurship, and interviewed by BBC, Fortune, etc. Pocket has been a featured speaker at the most prestigious conferences around the world, including Microsoft CEO Summit, Fortune’s Most Powerful Women Summit, and TEDx. She holds a Master of Science degree in Entrepreneurship and Innovation from University of Southern California. She has recently relocated to Singapore.

This story is written based on Pocket Sun’s presentation titled “Here Come Millennial Investors… in Heels” at Slush Singapore that took place on 19 September 2017. Slush Singapore gathered 3,000 attendees, 360 startups, 250 investors, 200 students and 90 speakers. Slush, originally from Helsinki, is a volunteer-driven, non-profit movement originally founded to change attitudes toward entrepreneurship. In 2016, Slush events were organised in Tokyo, Shanghai, Singapore and Helsinki.

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