20VC: Why Lead Lime’s Series D Funding Round, Why Engineers Are Underpaid & Why 74% of US Venture Firms Still Do Not Have Female GPs
Posted on 29th April 2019 by Harry
Sarah Smith is a Partner @ Bain Capital Ventures, a leading US venture fund with a portfolio that includes the likes of LinkedIn, Lime, SendGrid, Jet.com and more incredible companies. As for Sarah, what a start she has had to her time at Bain leading investments in the likes Perksy and the unicorn that is Lime. Prior to joining Bain, Sarah spent 5 years at Quora both as VP of Advertising Sales and Operations and then also from 2012-2016 as VP of HR, Recruiting, and Operations scaling the company from 40 to 200 employees. Before Quora, Sarah spent 4 years at Facebook as Director of Online Operations where her team scaled revenue to $1 billion ARR while reducing churn and increasing customer satisfaction.
1.) How Sarah made her way into the world of venture having seen the hyper-growth of both Facebook and Quora over 9 years in operations? What were the biggest takeaways from her time with Facebook and Quora? What lessons did Sarah learn as an elementary school music teacher that she has applied to her role in VC?
2.) Sarah and Bain led the Series D in Lime, so how does Sarah think about:
Market Size: How did Sarah think about and assess market size when evaluating Lime? How does Sarah respond to Peter Fenton’s statement, “I always laugh when I hear investors say they look for big markets”?
Competition: How did Sarah look to get comfortable entering such a fiercely competitive space? Is capital itself a defensible moat?
Dilution: With such huge future funding requirements for these companies, how did Sarah get comfortable with the level of dilution that will surely occur?
Hardware & Unit economics: How does Sarah think about and respond to the current level of break rates? How does Sarah believe Lime can have positive unit economics within 18 months?
3.) Why does Sarah believe that engineers are fundamentally underpaid? How does this tie into their mindset and attitude to equity? Why does Sarah believe the 4-year vesting schedule is fundamentally outdated? What would Sarah advise founders in terms of comp package to put in it’s place? Does Sarah believe the high attrition rate in the valley is a feature or a bug?
4.) Why does Sarah believe it is glib to say the lack of equality is merely the problem of VC being an old boy club? What are the more foundational and systemic problems that have caused this inequality? Why does GP commit fundamentally inhibit diversity? For firms looking to add a female partner, what is their literal next step? What does that process look like? What can they do to ensure their success in the first year? Where does Sarah see many firms going wrong here? What must firms avoid?
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