Nora Ali: [MUSIC] Welcome to What I Wish I Knew,
Nora Ali: sponsored by Fidelity, where we talk to
Nora Ali: entrepreneurs about how they achieve success,
Nora Ali: and advice they would have given
Nora Ali: themselves along the way.
Nora Ali: Today I'm joined by Anu Duggal,
Nora Ali: a founding partner of The Female Founders Fund.
Nora Ali: Anu, thanks for joining me here today.
Anu Duggal: Thanks so much for having me.
Nora Ali: All right. So, the Female Founders Fund based on
Nora Ali: the principle that you can achie-
Nora Ali: achieve great returns ah,
Nora Ali: by investing in businesses run by women.
Nora Ali: So, expand on that a little bit more.
Nora Ali: What's that all about?
Anu Duggal: Sure. So, we believe that um,
Anu Duggal: we invest in technology companies and we believe that
Anu Duggal: the next generation of
Anu Duggal: successful venture-backed businesses will
Anu Duggal: be started by women.
Anu Duggal: And if you look broadly speaking at the market,
Anu Duggal: there is so much data out there that
Anu Duggal: shows from my diversity standpoint whether it's
Anu Duggal: women on public boards or having
Anu Duggal: diversity within your organization
Anu Duggal: leads to better results,
Anu Duggal: from an investment standpoint.
Nora Ali: Is there something specific about how
Nora Ali: the businesses run by women are different just,
Nora Ali: just naturally the different types of businesses?
Anu Duggal: We invest in great founders and we
Anu Duggal: believe that the female founders that we've
Anu Duggal: invested in really have
Anu Duggal: unique insights into
Anu Duggal: the particular business opportunities
Anu Duggal: that they're tackling.
Anu Duggal: So, it could be women's health, it could be,
Anu Duggal: we have a business called primary,
Anu Duggal: which is for kids clothing.
Anu Duggal: So, they've really been able to leverage their experience
Anu Duggal: to identify opportunities that are non-obvious.
Nora Ali: So, you started the fund back in 2014,
Nora Ali: you've raised money for two separate funds here,
Nora Ali: so how have things changed from when
Nora Ali: the company started to today? What has changed?
Anu Duggal: Sure. So, I think that um,
Anu Duggal: it's actually been very positive looking back at um,
Anu Duggal: all of the different uh,
Anu Duggal: factors within the industry that have changed.
Anu Duggal: So, whether you take the venture capital industry or
Anu Duggal: the technology industry and you factor in
Anu Duggal: things like the me too movement and um,
Anu Duggal: and just the fact that on the venture capital side,
Anu Duggal: you've had almost all of
Anu Duggal: the Sandhill Road VCs bring on a female partner,
Anu Duggal: and on the female founders side,
Anu Duggal: we've seen at least within our own firm,
Anu Duggal: the amount of deal flow that we look at on
Anu Duggal: an annual basis almost exponentially grow year over year.
Nora Ali: Wow! Really good progress then.
Nora Ali: Do you think the velocity of progress is,
Nora Ali: is right or is there still room for improvement?
Anu Duggal: I think there's still room for
Anu Duggal: improvement but I think at the end of the day,
Anu Duggal: once you start seeing role models,
Anu Duggal: when you look at a case like Katrina Lake,
Anu Duggal: who took Stitch Fix public, and you look at, you know,
Anu Duggal: we have Shengli Ma from Zoola within our own portfolio,
Anu Duggal: their company just raised a $100 million.
Anu Duggal: So, I think women really need to see
Anu Duggal: role models and examples and um,
Anu Duggal: that's going to be a really important factor for change.
Nora Ali: All right. So, starting this type of
Nora Ali: fund seems like it could potentially be very difficult.
Nora Ali: Just starting a fund in general and
Nora Ali: beyond that just educating ah, your investors.
Nora Ali: But looking back, what do you wish you
Nora Ali: knew when you were starting this fund that would make it,
Nora Ali: had made it a little bit easier?
Anu Duggal: In terms of background, prior to
Anu Duggal: starting the fund I was a entrepreneur.
Anu Duggal: So, I co-founded e-commerce company.
Anu Duggal: And um, after we got acquired,
Anu Duggal: I started doing some investing,
Anu Duggal: and I think that I kind of
Anu Duggal: came into the industry very cold.
Anu Duggal: I had a vision.
Anu Duggal: I felt like there was a real market opportunity.
Anu Duggal: Nobody was really focused on this
Anu Duggal: particular um, insight you know,
Anu Duggal: that female founders were really onto something,
Anu Duggal: and so I think that in hindsight,
Anu Duggal: if I was to do it all over again, um,
Anu Duggal: I, I would definitely look
Anu Duggal: at both New York and San Francisco,
Anu Duggal: I think there's equal amounts of opportunity
Anu Duggal: in both cities, but I think you know,
Anu Duggal: being a sole founder, it's tough to,
Anu Duggal: to be able to tackle both of those opportunities.
Nora Ali: Makes sense. So, when you're
Nora Ali: looking to invest in a company,
Nora Ali: what is that special sauce?
Nora Ali: What are you looking for? Aside from female founders,
Nora Ali: women-led businesses, what is it about the company?
Anu Duggal: Sure. So, I think we have um,
Anu Duggal: very similar things that we look for um,
Anu Duggal: you know, tha- that I think are,
Anu Duggal: are fairly straightforward from an investor standpoint.
Anu Duggal: So, number one is the founder.
Anu Duggal: By far you know,
Anu Duggal: what is their track record of success?
Anu Duggal: Have they been able to demonstrate you know,
Anu Duggal: success in other areas whether it's
Anu Duggal: personal, whether it's professional?
Anu Duggal: Um, I think that you know,
Anu Duggal: their ability to attract talent um,
Anu Duggal: is incredibly important because you know,
Anu Duggal: 30 percent of a CEO's job is just hiring.
Anu Duggal: Um, so, even early
Anu Duggal: traction around that is, is really helpful.
Anu Duggal: Um, I think that they have to understand and
Anu Duggal: have a unique insight into
Anu Duggal: the particular opportunity that they're tackling.
Anu Duggal: So, why are they well positioned to, to take this on?
Anu Duggal: What is it that they have that you know,
Anu Duggal: the other competitors don't
Anu Duggal: that will position them for success?
Anu Duggal: And then I think finally um,
Anu Duggal: you know, you have to be a great sales person as a CEO.
Anu Duggal: You're selling to your customers,
Anu Duggal: you're selling to your employees,
Anu Duggal: you're selling to potential investors,
Anu Duggal: you're selling to advisers,
Anu Duggal: and so you really have to live and
Anu Duggal: breathe what your company does,
Anu Duggal: and that's I think an important factor that we look for.
Nora Ali: Anything from a personality perspective for founders we,
Nora Ali: we hear about you know,
Nora Ali: you need to be extroverted to some extent.
Anu Duggal: Sure.
Nora Ali: But we're hearing more about the power of introversion.
Nora Ali: What is your perspective on that?
Anu Duggal: Yeah I mean I think that goes back to
Anu Duggal: my earlier point that um,
Anu Duggal: you know, whether you are introvert or an extrovert,
Anu Duggal: you have to live and breathe this company and you have to
Anu Duggal: have a unique insight that positions you for success.
Anu Duggal: So, when I look across our portfolio, you know,
Anu Duggal: we have founders ranging from 24 to 64,
Anu Duggal: personality te- personality types that fall within,
Anu Duggal: you know, all the Myers Briggs categories.
Anu Duggal: So, um, so I think diversity is important but I think you
Anu Duggal: really have to be incredibly
Anu Duggal: passionate about what you're doing and um,
Anu Duggal: and be able to demonstrate some traction.
Nora Ali: Absolutely. All right. So, in the second quarter of 2018,
Nora Ali: 35 percent of reported venture funding
Nora Ali: went to companies with female founders.
Nora Ali: That number is better than it has been in the past year.
Nora Ali: But what do you think is
Nora Ali: happening right now that it's going to get
Nora Ali: that number from being 35 percent
Nora Ali: to 50 percent or higher?
Anu Duggal: Sure. So, I think um,
Anu Duggal: going back to my earlier point,
Anu Duggal: what we've seen within our own portfolio is that now that
Anu Duggal: female founders have demonstrated
Anu Duggal: traction and on the venture capital side,
Anu Duggal: you see female investors
Anu Duggal: at some of the larger funds like I mentioned.
Anu Duggal: What I'm seeing is that a lot of
Anu Duggal: these female founders are actually looking
Anu Duggal: to partner with female investors.
Anu Duggal: And what that means for the industry
Anu Duggal: is that on the venture capital side,
Anu Duggal: these venture funds are realizing that, you know,
Anu Duggal: if you have a website that,
Anu Duggal: you know, is full of men,
Anu Duggal: then you're probably not going to
Anu Duggal: attract that female founder,
Anu Duggal: and investors are really kind of motivated by Fomo and,
Anu Duggal: and returns. And so-
Nora Ali: So true, Fomo is very powerful.
Anu Duggal: Yes. An- and so, you know,
Anu Duggal: I think that if they see companies being successful,
Anu Duggal: raising large amounts of funding,
Anu Duggal: going on to become public,
Anu Duggal: then I think that is what
Anu Duggal: really is gonna trigger the change.
Nora Ali: So, you invest a lot in tech as well.
Anu Duggal: Oh, technology companies? [OVERLAPPING].
Nora Ali: They're all tech. Right. So, what are
Nora Ali: you seeing in terms of trends when it comes to tech?
Nora Ali: What are you most excited about in tech right now?
Anu Duggal: Sure. Great question. So, um,
Anu Duggal: so there are couple categories that,
Anu Duggal: that we find interesting.
Anu Duggal: Um, so women's health is one area we
Anu Duggal: were early investors in Maven Clinic and uh,
Anu Duggal: through that experience have,
Anu Duggal: have identified and seen
Anu Duggal: quite a few opportunities
Anu Duggal: in speaking to the female health consumer.
Anu Duggal: Um, I think fintech there's still a lot of room
Anu Duggal: for opportunities specifically as
Anu Duggal: it relates to millennials,
Anu Duggal: who don't have the same relationship
Anu Duggal: with traditional banks that um,
Anu Duggal: you know, older generations do.
Anu Duggal: And then I think direct to
Anu Duggal: consumer commerce, um, you know,
Anu Duggal: we're seeing things like baby formula or um,
Anu Duggal: even other kind of food products that uh,
Anu Duggal: traditional brands have just not
Anu Duggal: innovated uh, within that category.
Nora Ali: As a serial entrepreneur as well you're
Nora Ali: no stranger to starting companies of course.
Nora Ali: So, before founding Female Founders Fund,
Nora Ali: you were the founder of
Nora Ali: an e-commerce company as you mentioned here.
Nora Ali: You also opened India's first wine bar
Nora Ali: super super cool, called the Tasting Room.
Nora Ali: So, what advice you have for young entrepreneurs
Nora Ali: here who are looking to start their own thing?
Nora Ali: Sure. So, uh, I
Nora Ali: think first of all starting a company is really hard.
Nora Ali: Um, so I wouldn't start a business just to start it.
Nora Ali: I know in today's day and age it's often viewed as
Nora Ali: sexy had a great career choice but um, it is very hard,
Nora Ali: it requires a lot of grit and resilience and, you know,
Nora Ali: um, I think that you have to like I
Nora Ali: said be very passionate about that idea.
Nora Ali: Um, I think if you do decide to start a company,
Nora Ali: the most valuable thing
Nora Ali: for me has really been my network,
Nora Ali: and by that I don't mean, you know,
Nora Ali: kind of traditional networking
Nora Ali: but as you come up with an idea,
Nora Ali: as you decide to,
Nora Ali: you know, kind of launch a business,
Nora Ali: make sure that you surround yourself with people
Nora Ali: who understand that business and, you know,
Nora Ali: whether you bring them on as advisers
Nora Ali: or have them involved in the business in some capacity,
Nora Ali: I think your network is the most important thing
Nora Ali: um, you own.
Anu Duggal: One last question for you Anu.
Anu Duggal: What is the advice,
Anu Duggal: the biggest piece of advice you would have given
Anu Duggal: your former self when starting your career?
Nora Ali: Um, I think probably to be patient, um, you know,
Nora Ali: now when you think about
Nora Ali: the car- career trajectory of um,
Nora Ali: of people graduating from college,
Nora Ali: there's so many different companies that you work for,
Nora Ali: so, you know, two years in,
Nora Ali: in one job is fairly straightforward.
Nora Ali: But I think for me I,
Nora Ali: I felt like the first career decision
Nora Ali: I made right out of college was,
Nora Ali: you know, going to be the rest of my life.
Nora Ali: Um, and so I think uh,
Nora Ali: just being patient and recognizing
Nora Ali: that you know there's a lot of
Nora Ali: opportunities and you're not stuck in
Nora Ali: one track um, is important.
Anu Duggal: Do you think that's changed uh,
Anu Duggal: from when you started your career to now?
Anu Duggal: We're seeing people who have jobs for
Anu Duggal: much less amount of time at once.
Nora Ali: Absolutely.
Nora Ali: Right?
Anu Duggal: Yes. Absolutely.
Nora Ali: These people are sort of learning that lesson.
Nora Ali: [OVERLAPPING].
Anu Duggal: Flexibility and um, and just more opportunity.
Nora Ali: And career pivoting as well.
Anu Duggal: Yes. Yes. [LAUGHTER].
Nora Ali: All right. Anu, thanks so much for joining
Nora Ali: us here today. Really interesting stuff here.
Anu Duggal: Thank you.
Nora Ali: Thank you.
Anu Duggal: Thanks for having me. [MUSIC]
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