Rebecca Lynn, a Midas List investor who is one of the most successful female VCs in Silicon Valley, thinks "there’s been a big move of women into venture overall". However, when she looks at the top 10 firms, she doesn't really see any movement. In her recent interview to Business Journal, this is what she responded to the question "What will it take to see movement at the top firms?":
"I’m not sure, to be honest. I think it will take women continuing to put numbers on the board. Hopefully, one of these new firms started by women will become one of the top 10 firms. That’s probably the best way to do it."
Women.VC can't agree more, and this is why we keep a track on women's VCs investments and their successes, and measure their performance on a regular basis. This is how limited partners and entrepreneurs can understand the value of female investors.
Read Rebecca's entire interview below.
"Rebecca Lynn, a Midas List investor who is one of the most successful female VCs in Silicon Valley, spoke to me recently after her Menlo Park firm, Canvas Ventures, finished raising $300 million for its second fund.
She had three big exits in 2014 when LendingClub went public, Check was acquired by Intuit and RelateIQ was acquired by Salesforce. Other investments she led include Doximity, Practice Fusion and Convo.
Rebecca Lynn of Canvas Ventures spoke to TechFlash Silicon Valley after her firm raised $300 million in its second fund.
Rebecca Lynn of Canvas Ventures spoke to TechFlash Silicon Valley after her firm raised… more
The following interview — covering everything from the state of fintech, women in venture, autonomous driving and the new fund — has been edited for length and clarity.
After the resignation of LendingClub’s CEO early this year, it felt like fintech hit a bump. How is that playing out right now?
I think LendingClub is starting to recover and, in terms of innovation, I think there is less in the lending space and definitely less in the peer-to-peer lending space. But we’re seeing a lot in areas like insurance and real estate and also in security.
Security definitely touches financial services in a very important way. So we’re seeing a lot of innovation in those areas, in compliance as well. So I haven’t really honestly seen things slow down in fintech. I expected it to, to be honest. I really thought investors would pull back. But we haven’t seen that happen.
What kinds of innovation are you investing in? You mentioned insurance. Is that one of them?
We’re looking heavily at that space, but we haven’t made an investment as of yet. We’re keeping a very close eye on a couple of companies.
We’re also looking at some companies in the real estate space.
I think there’s just a lot of opportunity. We talk about the disintermediation of banks, and of financial services more broadly, because a lot of them are based on highly inefficient business models. A startup that is properly structured can really have some advantages and grow entering those markets.
You have kept close track of the number of women in venture. Have you seen progress with that?
Yes and no. I was just at an event up in Napa last week which was all women. It was a two-day event and it was amazing. It was so delightful to be in a group of women who are all so accomplished. Seven years ago, when we tried to pull women GPs together, there weren’t very many. There were maybe half a dozen that we could really get a hold of. Most of them were quite new, including myself, to the world of venture.
Now we had a room with several highly accomplished women GPs. It was great. Many of them had invested in unicorns and a lot of them were building their own firms. It’s delightful to see how many women have done so well in venture.
But then when you look at the top 10 firms, there hasn’t been a lot of movement. Those firms hire women, but they don’t hire senior women. They hire more junior women.
I think, overall, there’s been a big move of women into venture. It feels that way, at least. But when you look at the top 10 firms, we haven’t really seen any movement.
What will it take to see movement at the top firms?
I’m not sure, to be honest. I think it will take women continuing to put numbers on the board. Hopefully, one of these new firms started by women will become one of the top 10 firms. That’s probably the best way to do it.
What do you think about the IPO climate right now? It seems like tech offerings are picking up.
I don’t do that much in the public market. It does feel like you know it’s coming back, though, and there are some really solid companies that are lined up, which is great.
In terms of the earlier stage market where I really focus, we’re seeing a lot of activity, particularly in the healthcare, genomics, financial services and artificial intelligence spaces.
A lot of that activity is fueled by the growth of angel investing. They have been funding a lot of companies that are now reaching the Series A funding level. There’s a lot of great new technology in science that just keeps coming and it’s really unlike where we were about nine years ago.
Image recognition has gotten to a point where it’s definitely quite useful using AI. We’re seeing breakthroughs in healthcare and healthcare IT. We’re seeing a lot of innovation in financial services, especially in the insurance and real estate market.
So we’re seeing a lot of activity. There is, perhaps, a little more price sensitivity — rational price sensitivity, I would say. But there are a lot of good companies right now. So we’ve been very busy.
This second fund you just raised is considerably larger than your first one. Why raise that much money? What’s changed? I understand that you were oversubscribed, so why did you stop where you did?
What we believe and what we’ve heard from our peers is that small is beautiful. A small fund has the opportunity to “return the fund” much faster. If your fund is only about $400 million, you can return the entire fund with one unicorn, right?
So that’s why we believe that small is good. A reason that we increased our fund size is that we added two new partners since we raised Canvas I. We wanted to keep our investing pace the same, maybe even be a little bit more aggressive. We also want to have more shots on goal, to have more companies in that particular portfolio. With a $300 million fund, you can have several more companies. But our strategy is very similar to Canvas 1.
Another thing we have seen, from an entrepreneur perspective, is a lot of early stage funds — in the $50 million to $100 million range — that have come up. Some have done quite well. Then you have the huge mega funds that are driving late stage investments.
So we felt like we needed to be distinct and have a big enough fund that people know we will go the distance with them, that we’re in it for the long run and that we’re in it for multiple rounds. But we don’t want to be so big that it doesn’t make as much sense, in terms of a return perspective.
Will the amount that each of the partners invest be relatively the same?
It’s slightly more, but relatively the same. You may see us make some bigger bets. We felt like we have had a very concentrated portfolio. We’ve been successful at that. So you may see us make some some bigger bets in certain areas.
How about the pace of investing? Has that changed in the last year? Do you see that change going forward?
Yeah, it’s funny. Over the last year it’s been pretty slow. The pricing kind of got ahead of things. But we have already started picking up our pace pretty significantly. I would say, honestly, that we will be more on our normal case going forward.
Can you give me an example of a recent investment that represents what you are looking for today?
My most recent one hasn’t been announced at all. It is in a very different space than I typically invest in.
One we have invested in is Everwise, which is essentially a mentoring platform. It connects people to mentors. Many of their clients are Fortune 100 companies. They connect them to mentors, both inside and outside the company to really level the playing field. It helps them connect minorities, women or anyone who would really benefit from a coach to grow and to to help them get up the corporate ladder.
Transfix is another. It is a marketplace for trucking and this one we really like, as well. It connects people to lots of independent drivers. It helps connect people who have trucks that need to be filled with companies who want to fill that truck. They’re growing really nicely and got a nice follow-on funding by NEA quite recently.
I wish I could tell you about the company I just invested in. It’s a very cool company that is in the autonomous vehicle space. I guess we can say that much about it.
What I can say on the record is that we’ve looked a lot at autonomous driving, both from the hardware and software angles. We think there are opportunities in both spaces. I’m incredibly excited about this space. I think it can do more to change our way of life than practically anything else. Driving is the number one cause of death.
A Kelley Blue Book survey just came out that said about six out of 10 people surveyed said they knew little or nothing about autonomous vehicles. About 80 percent said they should always have the option to drive themselves. A large number said that even if it autonomous driving was going to make things safer, they absolutely don’t want to give up their steering wheels.
That doesn’t surprise me. I used to do consumer product work at Procter & Gamble. Part of the problem is that you can’t ask a person about a product or a feature unless you really actually let them experience it. Initial surveys can be a little misleading because until you can show somebody what you’re talking about or they can experience it, what they say can be a little misleading.
You learn consumer product 101. When you’re doing consumer product testing you can’t ask somebody to imagine something. You have to let them actually see it, touch it, feel it and then comment on it.
That was my experience, even with Tesla. I don’t think I would have had the same reaction to that car before I drove it as I did afterwards. It was a very different experience.
But that said I think that people will want for quite a period of time some level of ability to drive themselves. A roll out with autonomous driving can make sense, but it’s going to have to be very thoughtfully done."