The following is the third and final part of a series, and is authored by Kiley Giebel of Groove's Spring Intern Team. Witnessing the challenges faced by many women who desire to invest in startups, but who are also either intentionally kept out or passively ignored by many fund managers, Allie, Brianna, and Kiley have set out to better understand and resolve the barriers faced by women investors.
As a part of this series, the team will cover the many facets that ultimately lead to one's interest in and ability to invest, including a career, general financial well-being, and exposure to venture investing. Please enjoy as we learn alongside these incredible women.
With the foundations of a solid career and sound personal finance strategy in place, we're ready to dive into a topic that many investors (women and men) never touch—venture investing. Many people overlook venture capital because of the complexity of the asset, the risks involved, and the idea that one must have considerable capital to participate, but the reality is that each of these perceived constraints is increasingly not true.
For an introduction to the topic, I recently spoke with Leslie Frécon, Founder and Managing Partner of LFE Capital. Following an executive career at General Mills, Leslie started LFE with an emphasis on investing in female-led businesses. More than 20 years later, LFE is now one of the longest running venture capital firms run by a woman.
To begin your own investing career, Leslie suggested starting with the basics:
"Grow your network and define your strategy."
Applying this to my experience at Groove Capital, I can better understand our focus on early stage startups, who are based in Minnesota. There's a strategic need and infrastructure that can support our investments beyond funding. There are also many ways to connect with industry leaders, impact investors, and community resources that we must seamlessly connect with our own investing efforts.
"Understand the operations behind investing."
Venture is about being bold, sticking with your gut, and asking the right questions—the latter being one of the most important takeaways. Asking questions is crucial to investing because of its complex nature. Grasping the main concepts of venture investing significantly helps during the investment process, but it is easy to feel overwhelmed, especially if you are unfamiliar with the terminology. Just remember that everyone has been in your shoes, and learning is part of the process. You can educate yourself through podcasts, books, and from shadowing other investors.
"Do extensive market research and financial analysis for every potential investment."
There are multiple steps in the investment process. One of the more time consuming tasks includes conducting an analysis of the startup. This means you have to dive into a company's financials, for the investments that you are most excited about. This can be very exciting for some and tedious for others; but it should not deter you from wanting to get involved. There are many resources that can help you work the finance side of investing (PRO TIP—Google is your best friend and don't forget to leverage your network!). Additionally, you will have to conduct a market analysis, which isn't too complicated, but make sure that you do thorough research because product market fit (if a product satisfies a market demand) and competition can make or break a company.
Having spoken with a true industry pioneer, I'm feeling like the main takeaway is to put aside my fear and try out venture investing.
Remember that we all make many micro-investing decisions every day. Like when you chose to buy that new refrigerator, you researched the best brands to determine the best value products. You asked the questions to figure out which options optimized your needs. As you can see, the process is already built into your daily routine.
