小蓝视频色情网页版 News recently spoke with , partner,听 and , partner and chair of the venture funds practice at law firm . They advise private investment funds, including venture capital and private equity, on their formation and ongoing operations.

鈥淧rivate equity is very well versed in secondary transactions,鈥� Goudey said. 鈥淭he venture world is getting caught up very quickly, and continuation funds is an example of that.”

The No. 1 issue for venture fund managers in this market is liquidity pressure, he said.

鈥淰enture funds are being raised every three to four years, if not quicker than that. And the fuel in the tank is distributions from the underlying fund managers, or some type of liquidity.鈥�

That liquidity pressure has ratcheted up in recent years as venture firms have raised multibillion-dollar funds from endowments, pension plans, sovereign wealth funds, fund of funds and gatekeeper organizations with their own fiduciary asset management duties. In 2022, raised $9 billion across three funds while raised $6.7 billion across three funds. raised $6.2 billion across two funds in 2023.

鈥淰enture horizons are very long, and they’re getting longer by the day from a liquidity standpoint,鈥� said Goudey.

A continuation fund allows a manager to maintain a longer relationship with portfolio companies they believe are still maturing.

Lightspeed and NEA, among others, are pursuing continuation fund strategies, according to . closed on in October 2024, a $1.5 billion fund led by .

For smaller managers, these funds are not an option because they are so costly and labor-intensive. Smaller funds looking for liquidity tend to sell some of their portfolio to secondary buyers.

鈥楶E-ification鈥� of venture

鈥淐ontinuation funds started out of the great financial crisis and then became larger in private equity in 2016 through 2019, and have exploded since then,鈥� said Eapen.

鈥淚n private equity, where you own 100% of the company, and you have 10 to 15 portfolio companies in your fund, it’s a very different analysis 鈥� because the amount of time and energy and communication with LPs is a different calculus,鈥� he said.

鈥淲hereas for venture, when you have hundreds of portfolio companies 鈥� they shied away from it for a while, because of the complexity, because of the costs, because this is essentially viewed as what private equity does,鈥� said Eapen.

The structure

To set up a continuation fund, a venture firm must become a registered investment adviser. A firm creates a new vehicle, rolls certain assets into it, and finds a new buyer.

Current investors in a fund can continue to hold their interest, sell it all or sell a portion. They can also choose to make a new commitment, said Eapen.

These transactions are complex, and can be structured in lots of different ways.

鈥淭he best synergies here are when the general partner, the LPs and the new buyer all agree this is what we’re looking to do, these are the commercial drivers of it. And everyone is on the same page as to how risk is allocated, how conflicts are disclosed and how costs are being split up,鈥� he said.

Fee intensive

鈥淚t’s very fee intensive, but also time intensive,鈥� Eapen said. Lots of service providers, from law firms to accountants, are involved. Firms have to engage with all LPs in a fund to get consent, review fund documents, work with a valuation expert, form a fund, find a buyer, negotiate an agreement and manage all the disbursements.

鈥淚t really is a very complicated M&A transaction,鈥� he said.

Early days

鈥淭he secondary market is very robust now, but we are still in early days for penetration through lots of different investment strategy managers,鈥� Eapen said. 鈥淎nd I think as the number of secondary buyer firms increases, as the adoption becomes more mainstream, the cost to entry will continue to be pushed down.鈥�

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• The Rise Of Megafunds 鈥� A Decade In The Making

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The path from innovation to scaled-up production represents a critical juncture for hardware startups. For companies developing novel technologies, selecting the right manufacturing partners can determine whether a breakthrough technology turns into a viable product and whether the company successfully commercializes its developments.

After leading startups through production cycles, I鈥檝e identified four key factors that they must prioritize when outsourcing production.

1. Manufacturing partner: the inverse size-risk tolerance

When selecting a manufacturing partner, startups often gravitate toward established industry giants. However, I鈥檝e observed that eagerness to collaborate with new technologies is often inversely correlated with the size and maturity of the potential partner.

Every new manufacturing process carries inherent risk. Larger, more conservative companies tend to avoid these risks by either rejecting the project outright or shifting costs onto the startup. They may also demand long-term capacity commitments 鈥� an unrealistic expectation for a new business with an uncertain growth trajectory.

On the other hand, smaller, more agile contract manufacturers often seek opportunities to differentiate themselves. They tend to be more risk-tolerant and better aligned with a startup鈥檚 innovation cycle. While they may not guarantee unlimited production capacity three years down the road, they provide the flexibility that is critical in early-stage manufacturing.

2. Pricing: transparency and flexibility

Manufacturing novel technology presents real pricing challenges. Contract manufacturers operate on razor-thin margins and rely on well-optimized processes to remain profitable. When unproven technology enters the mix, pricing becomes even trickier.

The biggest challenge is creating viable pricing agreements that can withstand surprises 鈥� which invariably emerge when manufacturing something new. Effective pricing frameworks must keep the contract manufacturer commercially motivated while establishing clear paths to price reductions once the new process stabilizes and manufacturing costs decrease.

Thus, the initial pricing structure must lay the foundation for a sustainable partnership that evolves as the technology matures. This approach requires transparency and trust-building between founders and manufacturing partners.

3. IP protection: geography matters

For startups whose primary value lies in intellectual property, outsourcing production carries significant risks that should always be carefully considered. Many startups initially retain the most IP-heavy components in-house, outsourcing only assembly, integration and testing until formal IP protection through patents and trademarks is established.

Even with formal protections in place, geography plays a crucial role in IP security. The U.S. and many European countries offer strong legal protections, but in some low-cost manufacturing regions IP protection may be difficult or impossible to enforce. Political interference, complex legal bureaucracy and local favoritism can make pursuing legal action against a copying manufacturer financially and logistically unfeasible.

For startups whose value hinges on intellectual property, choosing a manufacturing location with strong legal safeguards should not be an afterthought 鈥� it must be a priority.

4. Quality control: scaling back presence as processes mature

Quality management is crucial when outsourcing production. For novel technologies, startups often need on-site quality control teams early on to establish processes and define clear quality metrics. Once these targets are consistently met, they can gradually shift responsibility to the manufacturer.

However, this initial involvement comes at a cost, and smaller manufacturers may require more guidance to maintain strict processes. Larger manufacturers, by contrast, often have stronger quality systems, reducing the startup鈥檚 oversight burden.

This creates a trade-off: While larger partners may be more process-driven, they are also less likely to take on a startup鈥檚 risk, as discussed above in No. 1. Navigating this contradiction requires startups to carefully balance risk, cost and manufacturing capabilities when selecting a partner.

The bottom line: a strategic partnership

For hardware startups whose technology requires innovation not just in design but also in manufacturing, outsourcing is not a simple transaction 鈥� it鈥檚 a strategic partnership. Establishing strong manufacturing relationships can take at least six months, with another year before optimal quality metrics are reached.

With the right manufacturing partner and well-structured agreements, startups can successfully navigate the challenging transition from innovation to scaled production. The right choice can mean the difference between a breakthrough and a breakdown.

is CEO of , where he leads the company’s development of advanced tire technologies for industrial vehicles in agriculture, construction and related sectors. A German-Israeli executive with a physics doctorate from the and management education from , he has spent more than 15 years in leadership positions at companies implementing new technologies in established industries. His expertise spans medical devices, industrial manufacturing and agricultural technology, with particular strength in bringing innovative technologies to established industries.

As I often say, building a successful company is not for everyone. It involves a lot of blood, sweat and tears 鈥� not to mention creativity and resilience.

Yet, the very qualities and skills that enable a founder to establish the company and drive its early success can sometimes become a hurdle as the business grows, creating bottlenecks that hinder progress. This signals it may be time for the founder to step aside.

Perhaps the most important example is . and 鈥� not without some convincing on 鈥檚 part 鈥� agreed to have the company as CEO. Schmidt鈥檚 term was dubbed as one of 鈥渁dult supervision,鈥� and Google would not have become what it is now without him.

Identifying the root of the problem

Unfortunately, many companies are not as proactive, and they only start discussing this solution once they鈥檙e under fire. While our default setting is often to blame external factors, the problem鈥檚 source is usually closer to home. As the adage goes 鈥� when you point your finger, there are three fingers pointing back at you.

For founders, it can be tough to admit their role in the company鈥檚 troubles. After all, they’ve started it from scratch, and founders often identify themselves with the company like a sort of Sun King, declaring, 鈥淚 am the state.鈥� They then become convinced that actions in their own interest are synonymous with actions in the company鈥檚 interest.

A scene from 鈥�,鈥� the drama, comes to mind. In the show, when and the regulators go to Uber鈥檚 office to investigate the company, founder responds with, 鈥淲e鈥檙e one and the same.鈥�

But they were not, and never will be, the same.

How to spot the winds of change

Change is a natural part of life. And in a startup, we can identify when a stage is ending. For instance, if a founder is more focused on self-promotion than actual business development, it can indicate a lack of involvement.

In other cases, the founder may feel burned out, bored or simply out of touch with what the business now requires. Their ability to lead diminishes, and bringing in an external CEO can boost the company鈥檚 prospects.

Another sign is when a founder鈥檚 lack of business acumen blocks them from making critical decisions, and the company starts to drift aimlessly. At this stage, the best option is to bring in outside leadership and find a new role for the founder.

For many founders, the hardest part is that stepping aside can feel like failure.

We must reframe this, as it is not a failure 鈥� it鈥檚 a strategic move for the business鈥� sustained success. Founders who step back, while remaining involved in a strategic or advisory role, often find they can contribute more effectively.

A smooth transition: How can investors help?

The key to a successful transition is an amicable process.

Ideally, the founder should recognize the need for change in advance and work with investors and the board to find the right replacement. When managed correctly, the company can emerge stronger than ever. On the flip side, poorly managed transitions can lead to both internal and external chaos.

Investors can help by recognizing founder burnout or misalignment. A founder鈥檚 reluctance to step aside or their inability to adapt to changing circumstances can be signs. Once that鈥檚 established, they can guide the founder through the process and ensure a smooth transition. After all, the ultimate goals are survival and growth, and companies need to choose the best person to lead the team to achieve them.

is the founder and managing partner of , a Delaware-based VC fund with more than 20 AI startups in its portfolio and five successful exits. With 20 years of experience in executive roles with financial groups and industrial companies, he has closed more than 250 M&A and private equity deals totaling $24 billion.

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Evidence suggests that there鈥檚 a new breed of founder in tech.

It鈥檚 difficult to source the origins of what we might label an AI company; AI has been around for decades. In the past 10 years, there has been an increasing creation rate of companies for which AI is at the core of their technology. Since 2017 the number of such companies in the U.S. Concurrently with this shift, there has been the advent of a new type of entrepreneur.

Today it鈥檚 the AI-native founder who wins the race. AI-natives are technically fluent in artificial intelligence and socially adept at navigating its impact. They are born with the internet in their pockets. The ability to learn anything at any moment is an expectation, rather than a desire.

Together with AI, there鈥檚 an entirely new method of company-building emerging; instead of building an AI company, these founders are building their companies with AI.

AI buildup

These companies are not building their own models. Instead, they are standing on the shoulders of giants. They are architecting systems that are more efficient and scalable than their incumbent peers 鈥� similar to the established tech players that rode the wave of the cloud and mobile supercycles. This is true of all new generations of founders who receive the technological baton from their predecessors.

AI-nativity is such a radical departure from the old ways of constructing companies that it has the potential to completely change the way we work, hire and grow.

Why have an SDR team mapped 2:1 to their AE鈥檚 when you can use something like and achieve the same efficiency with 1:1 and save 90% compared to the additional FTE? Or, if you have the cash, why not maintain 2:1 but have the efficiency of 4:1 where every seller鈥檚 calendar is filled to maximum capacity? Or, when it comes to engineering, why write code without copilot by ? And of course, the list of AI tools that create leverage for founders is expanding every single day.

The why culture

These new founders are embedding this culture of 鈥渨hy鈥� into their businesses. They鈥檙e hiring for it too, with AI-related job postings . AI-nativity is becoming a prerequisite to moving quickly and capitalizing on what is always an infinitely long product roadmap for the companies with the most long-term potential.

The rise of AI-native founders is also unlocking new possibilities in venture capital.

For example, traditional hard-to-back industries will start to become fair game as their operating economics improve. Consider , a California legal-tech firm. Pre-AI-nativity, backing a services business such as a law firm wouldn’t make sense from a VC perspective. But with AI augmenting the work, the overhead and margins make it look more attractive and scalable, and suddenly it becomes a high-leverage business. We are already seeing that trend across the

Of course, there are bubbles and hype cycles in tech, so investors must temper their enthusiasm for AI natives by continuing to underwrite durability and customer value. Understandably, AI skepticism is already creeping into public and private markets, and critics are right to problematize aspects of this latest supercycle.

Many AI companies lack cost-durability and struggle during market volatility. This will be less prevalent as failures mount and resilience prevails. But for now, we may be overhyped in AI relative to the fundamental value being created.

There is also the perennial Big Tech problem; industry leaders will shift further toward an M&A model that constricts competition and continues to make matching the likes of , , and seem impossible. This dynamic has always been there in tech, and only time will tell who has what it takes to reauthor the S&P鈥檚 top companies.

Advances in AI capability are showing that there is a better way to do almost every element of every job, and AI-native CEOs will not only create new and interesting technology companies, but they also will rebuild many of the incumbents with a technical architecture that is built for the future instead of the past.

, a general partner at who leads the New York office, is a sales leader and investor. Over a nine-year run at , he held a series of roles launching new business units and leading sales teams to best-in-company performances as the business grew to 770 million members and $10 billion in revenue. Separately, Becker launched his own company, , scaling it across the globe. He’s also an active angel investor focused on health, wealth and happiness.听

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We spoke with Lefcourt, who left Stanford Business School halfway to her degree to start her first company, , in the late ’90s. After its acquisition by The Knot, which is part of , she co-founded , which was also acquired. Lefcourt is also a founding member of , a group that advocates for increasing the number of female startup investors and entrepreneurs.听

The Freestyle team is a year into investing from its $102 million fund 5. It will invest in around 25 companies with approximately $2 million for the first check, she said, and then some reserve held for follow-on funding.听

Portfolio companies mentioned in our conversation include professional coaching platform , and video call clipping service in the the future of work category, turnkey apartment company in eldertech, and low-code no-code companies , that provides video chat APIs, and relational database company .听

Here is our conversation. The following was lightly edited for length and clarity.

How do firms operate to succeed at seed? What do you think is important for a firm to make its mark?

Lefcourt: You have to do a few things really well.听

First off, I think you have to have a broad network that thinks very highly of you and brings great opportunities to you. Because we can go out looking, but it鈥檚 not nearly as great as when you have this wide network bringing us opportunities.听

You have to prove that you’re really, really good at helping founders be successful. That you don’t deplete them, only help them and energize them and make them better.

Founders do their homework. There’s an abundance of capital, so they’re going to pick capital from the VCs known to be the best at what they do. When founders talk to other founders, what they’re looking for is who actually helps鈥攄oesn’t just claim they’re going to help, but actually shows up, dedicates the time and the brain power, and helps.听

But also gets out of the way, and knows that it’s not their company. That is very much the way we operate. It’s why Freestyle got started in the first place.

There’s more and more competition for every opportunity now. I think the main way we’ve been able to 鈥渨in deals鈥� is by the reputation we’ve gotten from over 150 founders we’ve backed.

What do you do to help companies succeed?

Lefcourt: We really understand who they are, what challenges they are facing and what we need to do to help them the most. That looks different for each company.听

I would say there’s a variety of things. A lot of times it’s a first time founder, and just providing the framework and the understanding of, 鈥淗ey it’s great that you’re doing this, but keep your eyes up, because here’s your next three steps.鈥澨�

I often say my job is to turn the lights on. They’re going down this path they’ve never gone down. If I can make that path much brighter and clearer, make them stronger as they go down it, and provide them with the right resources along the way, then I’m doing my best job.听

A lot of it is really putting a light on the endpoint, so they understand what they鈥檙e trying to achieve in this milestone. And providing such clarity, that they can see it and then achieve it.听

A lot of times during the messy phase, the seed stage, you’re not exactly sure what to do, what not to do, and where you’re going.

Are most of the founders you invest in first-time founders or serial founders?

Lefcourt: I would guess that we’re probably about 60 percent first-time founders and 40 percent repeat founders.听

Does one have an advantage over the other?

Lefcourt: Serial founders know that hallway a little bit better; that path is less murky. But other than that I don’t think so. There is some data to suggest that serial founders are more likely to be successful getting the Series A, but in the long term they’re not more successful. I don’t know if that data still holds.听

We are very open to the right opportunity, the right founder, period. And if they are serial, sometimes it’s a bonus, but it’s not necessary at all.

Is there a wave of technology that you’re riding, or sectors that are really interesting for Freestyle right now?

Lefcourt: What I’m looking at investing in, is less on new bleeding-edge technology and more on new consumer behavior, or new behavior in a market.

I think a few of the markets are in a major transition, and the world in five years looks vastly different than how it looks today, and therefore I am excited about them.听

One is the future of work. The future is so unknown. We’re literally at the tip of the iceberg of seeing how much work is changing, how decisions are made, and how teams are performing.

The next area that I see so much change and truly a seismic shift in the numbers is eldertech. The old paradigm of you live at home and then you go to some kind of older community, those days are over. There was already a trend away from them pre-COVID. It is reinventing how people live, and how people have the right services and the right tech tools to thrive.

The last one is low-code no-code. It’s really hard to find enough technical people and to get the features out fast enough. You now have all these tools being built, which enable incredible technology with one line of code.听

I did invest in . It’s an API so that anyone who’s building a platform can have audio and video within the platform.听

Anyone who is starting a company tomorrow in health tech doesn’t have to find all these developers to build that functionality. There’s literally one line of code and they are in business. We’re going to see a lot more of these sort of tools that enable people who are not technical, to create so much more, better and faster.

What do you feel the impact of All Raise has been?

Lefcourt: I think the major impact of All Raise has been awareness and enabling people to make better choices and understand how to stay competitive in the future.听

If you look at the numbers today, they’re not that encouraging, but we’re starting to see signs of leading indicators that good work is being done and good things are happening. You have more women at the firms who are making these decisions. You have now more women, a greater percentage, who are getting seed funding.听

You can look at the capital gap and this is abysmal. But those monster rounds can only happen if they receive seed five years ago.听

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We recently spoke with , one of the firm鈥檚 co-founders and previously an executive at banking and lending giant . Rotman co-founded QED with , another former executive at Capital One.

QED鈥檚 first fund was a $30 million internal fund. Its most recent fund VI was announced in February 2020 and is its largest fund at $350 million.听

According to the firm, it $662 million to date in 142 portfolio companies with $2 billion under management. That includes its investments in Seattle-based and S茫o Paulo-based at Series A. At Series B, the firm invested in Mexico City-based ; and first at Series C, Stockholm-based . The firm invests in the U.S., U.K., Latin America and is starting to invest in Southeast Asia. Investing team members are based in Washington DC, San Francisco, New York, Mexico City and London.听听

The team鈥檚 sweet spot, according to Rotman, is to 鈥渦se our operating backgrounds to help crack the code on businesses that still have a lot to figure out.鈥� Based on a 小蓝视频色情网页版 News analysis of its investments, the firm appears to invest most often for its first investment at Series A, and then at the seed stage.听

鈥淰enture capital is a very simple asset class that’s very difficult to do well,鈥� Rotman said. We spoke with him further about QED鈥檚 investment approach, the fintech sector and more.听

The following was lightly edited for length and clarity.

What has changed in the last five years in fintech investing?

Rotman: There are some very, very large fintechs that kind of show the art of the possible, of what an at-scale player can actually achieve. And that fuels the entire ecosystem, where young founders are spinning out of those companies, are spinning out of banks and saying, 鈥淲ell, I think I can do the same.鈥�

The combination of new capital and incredible founding teams coming into the space with this vision of what the art of the possible looks like is just this self-reinforcing ecosystem that’s been accelerating.

There seems to be a payment startup funded every week. Is fintech investing becoming too crowded?听

Rotman: I am more bullish on the next decade of fintech than I was on the last decade of fintech. This next wave, you can call it v2.0 or v3.0 of fintech, is going to produce more durable and potentially even larger outcomes than the first wave of fintechs did.

The first wave was a bit more about UX, UI and APIs. It was more about application processes and reducing friction, and the look and feel of what a digital product or digital distribution of banking products look like.听

This next stage is actually tearing apart everything down to the atomic unit, about how financial services are manufactured and distributed, and rebuilding it in a digitally native way.

These new building blocks that are being built within the fintech ecosystem鈥攚e don’t know yet how they’re going to be assembled鈥攊s going to challenge the notion of how banking is actually manufactured and delivered across every single component of banking, and there are a lot of them.听

There’s a lot of innovation ahead, there are a lot of entrepreneurs and capital chasing it. But there’s a reason for it. There’s a lot still to be done.

Where do you see the opportunities?

Rotman: We are a fintech specialist firm. We have more than a dozen investment professionals, and each one has multiple themes they’re chasing. So it tells you how many things we’re interested in. There are dozens of interesting vectors, subsegments within fintech.听

If you look globally, some of the top market cap companies in each and every country are banks. And it’s not just because of the revenue they’re generating, it’s because of the profit they are generating.

Many of the banking organizations around the globe still are on their v1.0 of delivering a digital version of the product. So there’s a lot of work to do across every single aspect of banking.听

If you think about the core pillars, you have things like storage of money that’s about deposits, you have movement of money that’s about payments, you have the borrowing of money and the whole lending side of the business where people need money today to buy something they will pay for later.听

You have the investment side of the business. You can even start lumping in insurtech at this point so you have insurance. You have capital markets. So there are these different verticals within fintech and each and every one of them is interesting in its own way.

Do you see banks being displaced or adapting?

Rotman: It’s hard to talk about banks as if they’re a single thing, when you have almost 10,000 in the U.S. You have 5,000 traditional banking depository institutions. And another 5,000 credit unions. It’s hard to lump them all together and say this thing is going to behave in a particular way.

Within the banking ecosystem, you have banks that are addressing this issue in different ways. You have the top four or five banks in the country that are extremely well known, extremely well capitalized. They have the ability to innovate themselves. They can invest in people, in technology. They can choose to procure products from fintechs or build them themselves. They have every option available to them.听

I would put in that camp. If JPM wants to build something, it can build something. Whether it can build it, as well as a fintech can, comes down to the talent they can hire.听

You have much smaller organizations, smaller community banks and credit unions that are relying on third parties to assemble solutions for them. They don’t have the ability to attract the talent or put the investment in, to basically keep up with what’s happening in this transformation from the old way of delivering their service to the new way.

And you’re seeing some interesting companies emerge in the space.听

Look at as a good example of a more modern platform that a lot of smaller banking institutions, community banks and credit unions can use to basically catch up and become digitally native very quickly.

There’s a whole layer of fintechs that can exist to help the banking ecosystem update legacy tech without rip and replace. It could be additive, it could be new functionality. It’s less daunting than it was in the past about ripping out your core systems.

And then there are a lot of banks that are in the middle, where they’re going to give it the good old college try. And the question is whether they succeed. Some of them think they can build it, and the jury’s out on whether they will be able to build it.

Because banks are not a uniform thing, they’re not addressing the issue in a uniform way, and that actually creates a lot of opportunity for startups.

Is the banking system leveraging fintechs or are fintechs leveraging the banking system?

Rotman: Think about , think about , think about , think about all of these API companies and middleware layer companies that are emerging. They help everyone. Think about as another example of a company that’s helping both incumbents and fintechs.听

And then there’s another breed of fintech, one that’s going directly to the consumer, with whatever the product or service is, and meeting their needs. And some of those companies could be taking business away from banks. A lot of those need to rely on banks behind the scenes to actually be the regulatory layer and sometimes even the execution layer of the business or product that they are serving out to the market.听

So there isn’t a single configuration. You might have a challenger bank like a or a that has amazing UX, UI and an amazing assemblage of product and service. But in reality they’re not a bank, which means they don’t have the legal ability to offer an FDIC insured account without another partner bank behind the scenes.

At the same time, you might have a company that is in the small business accounts payable or accounts receivable space, like a or an , where the banks might become a distributor of the product because it helps their customers.

Banking is being broken down into atomic units at this point, and the question is how you reassemble those atomic units. The Lego blocks of banking are not different than they were before, and banks can buy the Lego blocks, they can partner with the Lego blocks, they can build the Lego blocks, but so can other people.

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Partner brings a unique offering to the venture capital world: Working with companies at their time of founding to build their dream team.

Before joining the San Francisco accelerator and venture firm, Kline was honing his skills at venture-backed companies, which include , as well as , where he was the company鈥檚 first recruiter and head of talent.

Sweat Equity was founded in 2018 by and is backed by 鈥檚 . In the past three years, Sweat Equity has added 20 companies to its portfolio, most recently . and .

Kline said startups need product and engineering talent so they can land their first series of customers to drive revenue 鈥� anything to scale faster than competitors and be in high demand.

鈥淩ather than charge enormous consulting fees we ask for an ownership stake, so we are literally putting money where our mouth is,鈥� he added. 鈥淲e offer not just advice, but we are doing the job of a senior-level executive that you would have to recruit and probably wouldn’t get them at that stage.鈥�

He spoke with me about his approach to recruiting, and finding the right people for traditionally hard-to-hire positions.

The following was lightly edited for clarity and length.

What led you to a career in venture capital?

Kline: I was recruiting for early- to mid-stage for 12 years, and I was working with the founders. I joined Stripe, and my job was building out engineering teams and scaling any new product organization. I helped figure out what new teams would look like. I began looking at a couple of companies a month, and some couldn鈥檛 figure out how to go to market without having to hire over and over again. When Stripe grew from 200 to 2,000 employees in three years, I was faced with a choice and wanted to do it all. Dan Portillo reached out to tell me that he was starting a new VC firm. I had always wanted to be an owner of something, but not a recruiting firm. I was attracted to VC, but wanted to be involved in selecting companies and the path to do that. This married all of those things together and was a natural fit for me.

How do you like to work with founders?

Kline: Closely. Building your core team is one of the most vital things you can do. The first 10 to 20 people are your culture and they carry that for years. There is a lot of risk involved. Most people can do the job that is in the description, but it鈥檚 harder to have the right vibe, know how they operate together, and match personalities and energy types. If you don鈥檛 spend a lot of time with them, you will miss it. I start out working with founders and gain a 鈥渟ixth sense鈥� for what is important, and what stands out beyond the job description, to be able to find that same thing on the candidate’s side so you can have the right person for the right company.

What is your sweet spot with regard to recruiting for a startup?

Kline: Leadership and executive recruiting. Mostly in engineering and product, but I鈥檝e done legal, finance, marketing; the wonderful thing about being head of recruit and leading it. You meet some of the best people, get to know what 鈥済reat鈥� looks like across the board and take that framework to any type of role.

What would be considered the 鈥渉ardest-to-hire鈥� positions for startups?

Kline: Definitely engineering, but what is harder to hire is a great head of recruiting. The pandemic shifted people鈥檚 priorities, and the larger companies, even before the pandemic, were making it difficult to leave. We鈥檝e seen massive wealth accumulation and golden handcuffs. It鈥檚 not 20-somethings running around Silicon Valley anymore 鈥� they have families and mortgages, and a reduced risk is important. The startup landscape has changed. There is more capital and competitive salaries. There is more capital going into the market, and with not many other great places to put capital, VC is creating more startups than before and more tools to developers to build companies. It is so much easier to start a company than it was before. You need fewer people to build a product because of the infrastructure that can be plugged into. The barrier to entry is less, creating a need for more developers. However, the rate of training programs and getting education in computer science and engineering has not kept up with demand. We are going to be forever in this world.

What is one or two of the biggest mistakes startups make for their first employees?

Kline: Sometimes you hire or over-promote or -title people. You bring in the first employee as a vice president when what you really needed was an individual contributor who knows what they are doing: 90 percent building a product, not managing people. Most startups just hire their friends and stay within their networks instead of building a sustainable recruiting network. That eventually will dry up, and friends won鈥檛 always want to work on what you are working on. I understand why a person is seeking a VP role, but it鈥檚 not always good for the long-term. The best thing is to set up and invest in a talent acquisition strategy and recruiting.

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Two years ago, started , an Indianapolis-based venture fund focused on supporting seed-stage startups founded by Black, Latinx, women and LGBTQ+ entrepreneurs.

Jones, managing director, is the first-ever Black female venture capitalist in the state of Indiana. She gathered inspiration for the firm鈥檚 name from the generational, class and political events of 1968, a watershed year in the civil rights movement.

In May, the firm announced the first close of its with backers including the,,,., and the.

Sixty8 Capital is powered by , with Allos鈥� serving as venture partner. The firm is industry agnostic and intends to invest in 25 to 30 pre-seed and seed-stage companies, with an emphasis on the Midwest and initial equity checks of $250,000 to $500,000 per company, with additional funds reserved for follow-on rounds.

Jones believes there is a $4 trillion missed opportunity when there is not a focus on diverse founders. The answer, she believes, is leveling the playing field by infusing venture capital into businesses so they can utilize technology to build products and services that can scale.

She spoke to me about that investment strategy, how she likes to work with founders, and her experience seeking funding during a pandemic.

What led you into venture capital?

Jones: I was born and raised in Indianapolis and was always working at the intersection of technology, entrepreneurship, entertainment and media. I started a company in 2009 that focused on experiential marketing, where most of my clients were technology startups. I began working at festivals and ended up leaning into the entertainment world and working with , who is passionate about research and science.

He became interested in diversity, capital and entrepreneurship around the time when diversity reports were coming out. I realized that in technology, there had never been people who look like me in the room. Owning a company was an opportunity to build generational wealth within a community. Most minority founders stick to small business, but we thought about how we could build high-growth, high-scale businesses if we understood the options and how we can access them.

I knew that this is my life鈥檚 work, and I took a role in Los Angeles as director of sales and marketing for two venture-backed media companies and then . Six months later, I wanted to start something on my own, and by then wanted to return to Indianapolis. There, I founded the and Black Hatch Fund, which support tech and tech-enabled startups founded by Black and Brown founders in Indiana. We provided technology training and job placement, and later started an entrepreneur side with accelerators.

Sixty8 Capital is connected to work we do with Be Nimble. The opportunity to invest $10,000 or $15,000 is great, but we are ready to invest $100,000 in companies.

My entire background is consumer and culture, and there is an opportunity to utilize technology and VC in this model for those businesses, too. That is what Sixty8 Capital is doing to demystify what VC is in our community 鈥� bring capital product to the community, both locally and in the greater Midwest, to lift an entire ecosystem and educate them on how to get funding.

What was your experience going after funding over the past year?

Jones: I left my job at in February of 2020, and then three weeks later, the pandemic hit. I thought the shutdown was going to be temporary. I began my partnership with Allos Ventures, which is huge in the Midwest.

As a first-time fund manager and coming out of accelerators, I didn鈥檛 have a track record, so my mentor suggested, as I was transitioning firms, to see if someone would want to hire me and be an adviser, and that is what Allos is doing for me. Allos invested in the fund and helped with LPs and how to talk to them.

I feel like I went to Fund School or VC School — I learned everything from setting up a fund to operating agreements. I feel like I have been in a super bootcamp for the past year. I would have not raised the money without that partnership. Allos opened doors, and its goal was never to say that a fund focused on diversity would not stand the test of time. Allos provided resources, patience and lifted me to get there. The most incredible thing to do is to make change. I knew I had trusted people behind me. It is not easy to raise funds, but it was a more pleasant experience because I knew I had people I could ask questions.

Tell me about your investment strategy.

Jones: We are looking at early-stage; pre-seed and seed stage. We will be investing $150,000 to $500,000 initially and reserve some for follow-on funding, as well as be able to invest a few times up to a small Series A.

We are targeting Black, Latinx, LGTBQ+ and all diverse people. Our focus is intentional because there are diverse founders who are affected in getting investment. Our sweet spots are B2B SaaS and consumer, as well as direct-to-consumer beauty, health and wellness.

Finding the next Black or Latinx would be a dream for me. Media, food and beverage would also be good. I鈥檓 also excited about the future of work and HR tech tools, as well as fintech and anything solving equity issues in communities. I am also looking at supplier diversity and mental and physical health, which are huge.

How do you like to work with founders?

Jones: I like to believe I am a founder first. I spent most of the past four to five years running accelerators, so naturally I do as much as I can. I am making introductions, and helping with hires and sales is my sweet spot 鈥� go-to-market is my favorite part.

We have built amazing networks and investors that are extreme value adds. Our first investment is , a product of our accelerators. The company initially pitched and didn鈥檛 win, but ended up pitching again, won and we are now cutting a check for $200,000 into their start. We want to continue to share those stories.

We never have to say a direct 鈥淣o,鈥� more of a 鈥淣ot right now, but circle back when you create the ecosystem we want.鈥� We also have career training, so we can have the talent to put into the businesses. We really are going to bring into the ecosystem everything we have so far.

Your firm focuses on the Midwest. What attracts you to investing in this part of the country?

Jones: As a whole, the Midwest is underfunded. A lot more firms are popping up, but not with diverse funders. There are a ton of diverse funds on the coasts, and they tend to invest on the coasts. There was a unique opportunity to start a fund in Indiana.

There are some big exits, but again, not much diversity of venture capital here. Now I am the first Black woman to lead a venture capital fund in the state. That is a massive undertaking, but I am willing to take it. I want to expose our community to other communities.

The main reason is timing 鈥� there are not a lot of places where you can get early access to capital, and the No. 1 issue for businesses is capital access in the first two years. You try your best, pray it works out, or try for VC and fail or not get it. There is so much uncertainty, so it is a great opportunity to be in Indiana. I have amazing networks on both coasts. In addition, there is a lot of deal flow, which is making it harder and harder to say no to because I want to fund everything.

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was founded in 2009 and built a venture studio model and firm that helps founders start their journey. With its venture studio, the firm invests in companies along with helping to build them from scratch, Managing Partner told me.

Since then, the New York-based firm has invested in more than 30 companies that have gone on to raise more than $1 billion, Libby said. The firm likes to lead and co-lead rounds, and is willing to be the first believer, he added.

One of the areas the firm prides itself on is having a portfolio that is diverse. More than 70 percent of the firm’s portfolio companies have diverse teams, and 100 percent of those receiving investment from their later stage fund are female or people of color founders, he added.

Libby spoke to me about his mission to work with diverse founders, investing in renewable energy, and other sectors he has his eye on.

The following was lightly edited for length and clarity.

How did H / L Ventures get started?

Libby: My business partner, , and I were working at a consulting firm. This was at the beginning of the global economic crisis and, when everything goes bad, the advantage is you have a fresh perspective on ventures. We thought about a venture holding company, and under that, an ecosystem for building companies. We would put together a 鈥淪wiss Army Knife鈥� of things needed to build companies. Enter H / L Studio, where almost all of our eventual portfolio companies get started. We meet founders and then make investments off of the balance sheet and avail them with hands-on support.

We have two principles: Daily active engagement, being in contact with founders virtually everyday, and then from that call we discuss different activities.

The second is building early-stage companies at the nexus of growth, impact and diversity, with an immense focus on diversity. It is the right thing to do and a smart way to invest.

How do you like to work with founders?

Libby: By asking critical questions. People talk about the spectrum from 鈥渇ounder-friendly鈥� to not. There鈥檚 founder-friendly, and then there is us, who are way over here. Because we have a holding company and raised a round of funding, we can afford a big team of 40 people. And around them, we have a trusted partner network of over 200 experts and service providers to bring in, kind of like a hub-and-spoke system. We can pull in experts and advisers and constantly act like switchboard operators to connect them with our founders.

Your firm prides itself on making investments in diverse founders. Has this been the strategy from the beginning?

Libby: Yes, it is one of the reasons we started the firm. Eric and I are moved by social impact, and we thought there was an artificial gap in the market. In venture funding today, there is still a fractional percentage of dollars going to women and even smaller, 1 percent, going to Black entrepreneurs.

If you believe those numbers, you might think there is much less creativity in those populations. The reality is the opposite: There is so much talent and opportunity, but they are underinvested. We take more than 10 years to build sourcing pipelines with colleges and organizations to make connections.

One of the areas you invest in is renewable energy. What are you seeing there?

Libby: When we were starting out, was supposed to get the climate bill through, but did not. Back then, there was success in solar companies, and now they are looking at a new take with the joining of solar and finance, like financing strategies.

We have invested in some similar thesis with and , which are both providing credit solutions for energy. It鈥檚 like fintech for energy. The last energy boom depended on government support; this time they welcome it, but we believe companies are commercially viable on their own.

If the big package comes through, it is good news. But do companies need it to be successful? No. One of the biggest problems is there is so much energy consumption in at-risk communities. They need to have a diverse group of people solving these challenges because it is where they come from.

What other sectors are you keeping an eye on?

Libby: We are industry agnostic, though I just spoke on sustainable materials. We are looking at the future of food, as well as health and wellness. We also focus on financial technology when it is for social good. We aim to reinvent a new kind of venture company, and we are just hitting the moment where we are changing, and it is a big moment.

Photo of Oliver Libby courtesy of H / L Ventures.

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The husband-and-wife team of and left the bright lights and big city of New York to settle in Syracuse in 2013, where they work together at .

Chattopadhyay started the firm in 2014 after being a partner at and was joined by Sawhney, whose previous careers include being a journalist and in finance.

They told me that Armory is a seed and early-stage technology venture capital firm that strives to be a community catalyst for founders in the upstate New York and Northeast regions, as well as other geographies outside of New York City — where they have an office — and Silicon Valley.

• Read More: Where Venture Investment Is Growing Fastest in The US

A team of nine, the firm focuses on B2B companies with an emphasis on vertical SaaS and marketplace. Armory has raised two funds and backed 13 companies, three of which have exited: , which , as well as , acquired by in 2017, and , acquired by in 2019. Other prominent investments include and .

Chattopadhyay and Sawhney spoke with me about working together, where they see talent going and leveraging networks. The following was lightly edited for clarity and length.

What鈥檚 it like to work together as a married couple?

Chattopadhyay: We have a great personal and professional connection, and we also have trust in each other. When we were first getting started, investors would tell me that they like what I am doing, but what does Pia think?

Sawhney: It鈥檚 been important that we had our own careers before starting a company together. Both of us were at a certain level of seniority when we started, so we complemented each other with confidence. The culture of our firm is centered around integrity and frankness. I bring that being a former journalist, and so does Somak. The only way to figure things out is to ask really hard questions to give the context you need. That culture is what we stress within the team, and it has served us well so far.

How do you like to work with founders?

Sawhney: Founders resonate with us on a personal level. We have a small team, and everyone on the team gets to know the founder.

Chattopadhyay: We act as a trusted adviser for companies. One of the ways we help the companies is on the recruiting side. We have a lot of affiliation through alumni in universities and can tap into the network for recruitment. The next part is follow-on capital; we have a 100 percent hit rate in our companies attracting follow-on.

You already mentioned recruitment, but how else are you tapping into universities?

Sawhney: Somak and I worked in New York City, Somak in technology, and I in media, and we have put together a vast network of people in the city and in upstate New York. With universities, we鈥檝e gotten to know people in the accelerator programs.

Chattopadhyay: It鈥檚 always been important for talent attraction. In many cities, the university plays a role in attracting employees and talent to the region. There are 100 universities in upstate New York. Universities are capturing funding from the or other sources, and getting a level of research dollars comparable to venture dollars. After graduation, they may go to New York City or Silicon Valley, but with our fund, we are providing an opportunity to have them come back to a place where they had fond memories, a lower cost of living, and the ability to tap into world-class human capital. We see certain entrepreneurs, like ACV, build out in the and , or .

Working with all of the accelerator programs, how do you balance your attention between ideas, especially ones that may not pan out?

Sawhney: We like to be very collaborative, friendly and polite, which is important if you want to do business. If you are helpful or receptive, word travels fast. Building trust in this region took a long, long time, and we also had to instill the confidence that it is worth taking venture capital. There are a lot of people who believe they don鈥檛 need capital and can run their business with funds from friends and family. We help them understand that they can expand and scale faster if they get people around them who have done this before. We have been here seven years, and we are still learning.

Chattopadhyay: We are here to be a sounding board and can be the Sherpas to help people understand what VC is. We also spend time talking to people about why VC might not be good.

You are focusing on tech companies outside of the traditional tech hubs. Where are some unusual cities you are finding founders?

Chattopadhyay: There are many VCs who talked about how leveled the playing field, but we are not seeing that in the seed and Series A funding as much. We鈥檝e been observing the talent migration patterns in the past year, and we are making a bigger push with our fund to look at Indianapolis, Columbus, Ohio, Pittsburgh and Philadelphia. When we go there, these towns have a critical mass of entrepreneurs, talent, universities and accelerator programs.

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