On this week's episode of the LA Venture podcast, hear from Mark Suster, managing partner at Upfront Ventures, as he explains why he thinks the best time to talk to founders about fundraising is three to four months after their last fundraise.
<p>
Key takeaways:
</p><ul class="ee-ul">
<li>Inclusion in the hiring process means hiring women, introverts and people that don't fit the traditional chest-pounding VC mold.</li>
<li>There's a lot to be learned from watching people get what they want done with sugar and honey -- without being rough about it.</li>
<li>Most VCs get into the business because it excites them to help an entrepreneur in his or her journey and spend a disproportionate amount of their time doing just that. But that work is secondary to the VC's primary job -- which is to return capital. </li>
</ul><p class="pull-quote">
When you look at the great women of our industry...it seems somehow that women had to quit their firms and go raise their own funds in order to be in power. And the model for our industry has got to be different.
</p><p><br></p>
<p class="pull-quote">
VC is like a pimple on the butt of the whole world of investing. It's such a tiny, tiny, tiny thing that we do here that we think is so self-important. But the real money is like things like public markets and commodities and, you know, currency and all the big dollars.<br>
</p><p>
<em>— Mark Suster</em>
</p><p>
<strong>Mark Suster</strong> is the managing partner at Upfront. He previously was the founder and CEO of two successful enterprise software companies, the most recent of which was sold to Salesforce.com where Mark became vice president of products. Prior to being a founder, Mark was a software developer at Accenture where he lived and worked in Europe, Japan and the U.S. Mark is a graduate of UCSD and has an MBA from the University of Chicago.<br>
</p>
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From 'the Passenger Seat to the Driver's Seat': Upfront Ventures' Nortman Is Now Co-Managing Partner
Oct 26 2020
Kara Nortman is already widely regarded as one of the top VCs in Los Angeles. Now, she is getting a promotion to make it official.
Upfront Ventures, the Santa Monica firm with more than $2 billion in assets under management that Nortman joined as partner in 2014, announced Monday she will become Co-Managing Partner.
Nortman will share the new title with Yves Sisteron, who founded the firm in 1996, and Mark Suster, who came aboard in 2007. But Nortman is quick to point out she's not replacing anyone.
<p>"Yves is not going anywhere and Mark is not going anywhere, but he is 10 years older than me, so I have to be pretty good at this hopefully by the time I'm in my 50s," said Nortman, 44. "It really is an apprenticeship."</p><p>Nortman says she is taking a more active role in raising capital for Upfront's next $270 million fund (the firm raises a new vehicle every three years.) Citing SEC regulations, she declined to go into specifics but said fundraising is "going great."</p><p>As a native Angeleno, Nortman is a tireless cheerleader of the city's growing tech scene. In 2022, she will also be cheering on Angel City Football Club, L.A.'s new <a href="https://dot.la/angel-city-womens-soccer-2646447269/angel-city-welcome-to-the-beginning" target="_self">women's professional soccer team she co-founded</a> with top celebrities like Natalie Portman and Serena Williams. </p><p>Nortman's promotion also makes her one of the few women who have ascended to the highest ranks of venture capital. </p><p>She is a founding member of All Raise, a nonprofit advocating for female founders and funders and a board member of <a href="https://timesupfoundation.org/" target="_blank">TIME'S UP</a>, created by women in Hollywood to fight harassment and discrimination. In an interview Friday, Nortman talked about her new role, how she gets along with Suster and what investments she's most proud of. She also talked about the fate of the lavish Upfront Summit, which normally brings hundreds of investors and founders to L.A. every January <a href="https://dot.la/upfront-summit-venture-capitalism-2644994020.html" target="_self">for several days of glitzy parties and panels. </a></p><p><strong>What will this new role entail and how will you split duties with the other managing partners? </strong></p><p>It will feel like a big shift maybe to the outside, but it's been a very gradual evolution. In a lot of ways I've already been stepping into this role over the last year or so and doing more on the leadership front, like strategy, hiring and building relationships with the LPs, which is an interesting part of the business. I've always met LPs, but it's almost like moving from the trunk to the back seat to the passenger seat to the driver's seat. </p><p><strong>From the outside, you and Mark Suster seem to have such different personalities. Can you give us a window into how you work together?</strong> </p><p>The funny thing is Mark and I have a lot of similarities. How would I describe our working relationship? It's the best I've had in my career. That doesn't mean it's not without friction at times. It doesn't mean in the early years we didn't bump heads when I thought I knew the business really well because I had done it at Battery Ventures for five years a decade earlier and it had changed a little bit. I had to evolve and understand how to operate in a different market at a different time and all those different things. He's been hard on me but in ways that have really helped me learn and evolve. And now we have very productive differences of opinions and he's still probably right 90% of the time. But in a lot of cases, there is no right. </p><p><strong>When you say he's been hard on you, what's an example of something that he has changed about you or tried to change?</strong> </p><p>He cares deeply about giving me real feedback and that's not always been easy to hear. I think about a performance review I had two or three years ago where I think he typed me up a 10-page essay on my strengths and weaknesses with specific examples and it really kind of changed the way I invested. </p><p>I almost have this innate, positive energy that I used to call anxiety around making sure I meet the best people that we can invest in. I was so interested in getting in front of everything that I'd say one of the best things Mark did for me was slow me down. It really kind of goes to a place of developing your own point of view. And I think it's an important thing for women in this industry in particular. We want more people of color to be in leadership roles in this industry. But if we're all using the same inputs as everybody else and making decisions in the same way you just chase a little bit better. You're not actually going to leverage the important part of diversity, which is getting different kinds of thinkers with different kinds of networks. </p><p><strong>Now that you are one of the few female VCs in a position of top leadership, what do you see as the key to further breaking up the boys' club and diversifying VC firms?</strong> </p><p>Once you're a woman or a person of color in a VC firm, it is making sure other talented people like you get hired, but also hiring people who are not totally like you. You have to make room for different kinds of people. And how do you empower those people? How do you support their process of making investments so they can win things when they don't have a huge portfolio? How do you bring the weight of the firm behind their process? It's really hard in the beginning. And so those first two years and having an awareness around mentorship and allowing that person to make mistakes and giving them the room to go slowly and get things wrong and really speak and have presence and feel like in their comfort zone is really important. <strong></strong></p><p><strong>Over your decade-plus of doing this in L.A., what investment are you most proud of?</strong> </p><p>That's like asking to pick your favorite child! (laughs). </p><p><strong>Is that an unfair question?</strong> </p><p>Totally! I'll just mention a few different things. When I got to L.A., the first startup I was involved with was Tinder. I recruited Sean Rad into IAC [the holding company that owns brands across 100 countries] to build something totally different, and during a hackathon, he built Tinder. It's turned out to be one of the biggest brands of its time. </p><p>Then I would go to a company like Fleetsmith, <a href="https://www.fleetsmith.com/fleetsmith-acquired-by-apple" rel="noopener noreferrer" target="_blank">which was bought by Apple earlier this year</a> in the middle of COVID when no one was buying anything. [The startup automates Apple device management.] I got to know those guys when they were just starting. I did their $7 million Series A and they were talking about things at the time that everybody thought was a little bit nuts. While they were in the Bay Area all three founders were from L.A. and this is a Mac town. I think I got the Mac thesis pretty quickly at a time when it was not as obvious and everyone was like, "if Apple's not doing it, there must be a reason."</p><p>A final one I'll mention is <a href="https://www.parachutehome.com/" rel="noopener noreferrer" target="_blank">Parachute Home</a>, which was my very first investment when I got to Upfront. [It makes modern bedding, bath, linens and other home decor essentials.] I think it reflects all the great parts of L.A. But it is built on technology. The headless eCom platform they built with data science around driving repeat rates and increasing load times is done so incredibly well. </p><p><strong>What can you tell us about next year's Upfront Summit?</strong> </p><p>We are definitely doing something and it's going to be in a different form. Obviously, in a COVID world it's not going to be what it was in in 2020. </p><p><strong>How much time are you spending on Angel City?</strong></p><p>It's an important part of my life and my community but we have a full time CEO who is exceptional, Julie Irman.</p><p>What has surprised me is how much overlap there is between my day job and Angel City. One of those things about L.A. is we can sit at the intersection of tech, business, brand, celebrity and really think about community. I may take things away from my DevOps cloud cyber security companies by how we're building community at Angel City because they're doing very similar things where they're testing open source strategies. It sounds a little bit of a stretch, but I really like to think about systems and how different parts of my life influence my job.</p><div class="horizontal-rule"></div><p><em>***This interview has been edited for brevity and clarity.</em> </p><p><em>**Upfront Ventures is an investor in dot.LA.</em></p>
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Density, a buzzy Upfront Ventures-backed startup that big tech companies like Facebook and Google as well as the U.S. government have used to anonymously monitor how employees are using buildings, can now provide a more accurate count of the number of occupants in a room.
<p>Previously the company's infrared sensors were only used at entryways. A new addition, called <a href="https://density.webflow.io/blog/introducing-open-area" rel="noopener noreferrer" target="_blank">Open Area,</a> puts a radar smaller than a palm of a hand above any open space that can track a room of up to 1325 square feet. Each sensor will cost $399 plus an additional $199 for the monitoring software every year. </p><p>Although the technology was first designed to help companies better utilize office space and get rid of money draining empty offices and conference rooms, it can also be used to help enforce social distancing rules. </p><p>At first glance, the company's tracking devices could appear as a privacy nightmare, but Density says its technology is actually much less intrusive than traditional surveillance cameras because all of the information on the platform is anonymous; Workers merely show up as dots. </p><p>Density has seen 407% revenue growth from the same period last year as warehouses, factories and universities have all signed on as clients as they try to navigate keeping workers and students safe amid the pandemic, according to co-founder and CEO Andrew Farah.</p><p><a href="https://dot.la/a-company-perfectly-suited-for-the-covid-era-density-raises-51-million-2646809603.html" target="_self">Density raised $51 million in Series C funding in July</a> led by<a href="https://www.kleinerperkins.com/" rel="noopener noreferrer" target="_blank"> Kleiner Perkins</a>, with participation from 01 Advisors, Upfront Ventures, Founders Fund, Ludlow Ventures, Launch, and DTA. The new round brought its total funding to $74 million. </p><p>Upfront managing partner Mark Suster sits on the board along with Jason Calacanis, the well-known angel investor who was an early backer of Uber. </p>
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