Building Relationships to Career Transitions with Claudia Munce and Heidi Roizen

Event Introduction and Speakers

• The event's original title was "Women in VC," but it was changed to "Building Relationships to Career Transitions," resulting in a significant increase in registrations, with 30 more sign-ups in just one hour and a total of 160 registrations (31s).
• Research by HBS shows that only 11% of partners in the US in VC are women, highlighting the importance of advocating for female leadership in the industry (1m42s).
• The event features two exceptional thought leaders, Claudia Munce and Heidi Roizen, who are women but were chosen for their exceptional contributions and results in VC and the startup ecosystem (1m49s).
• Claudia Munce and Heidi Roizen share six commonalities, including working in VC for over two decades, transitioning to VC from other successful careers, being written about in case studies at HBS and Stanford, serving on multiple boards, teaching at Stanford, and having happy kids (2m26s).
• Claudia Munce is a venture advisor at NEA, and Heidi Roizen is a partner at Threshold, and both have been successful in their careers, with Claudia being an executive at IBM and Heidi being a tech entrepreneur (2m34s).
• The event will feature Claudia and Heidi speaking individually, followed by a chat together, and the goal is to learn from their experiences and expertise in building networks and relationships in VC (2m10s).

Claudia Munce's Background and Career

• Claudia Munce was born in Brazil and came to the US as a foreign student, securing a scholarship to pursue a master's degree in computer science at the University of São Paulo (4m22s).
• Claudia Munce's journey started in Brazil, where she was one of the typical foreign students who landed in the US before graduate studies, and she was lucky to secure a scholarship to pursue her master's degree (4m25s).
• Claudia Munce started her career as a foreign student in the US, arriving with two suitcases and hoping to get a degree and a job, but she ended up having a successful career with IBM that spanned 30 years, starting as an engineer in the R&D Research Center and eventually becoming the head of commercialization and licensing for IBM research lab (5m17s).
• Munce's career took her from a technical field to venture capital, where she became an accidental VC after IBM set up a venture capital group, despite not knowing much about venture capital as a software engineer (7m9s).
• As a corporate investor, Munce faced challenges in the early 2000s, but she was able to create a great network of investors and establish partnerships with the venture community, eventually becoming the first corporate investor to join the National Venture Capital Association (8m52s).
• Munce's experience in venture capital taught her about the importance of creating a network of people who can support her mission and agenda, a topic that will be discussed further (9m25s).
• Munce's career transition from a technical field to venture capital was marked by her participation in the Sloan program at the Graduate School of Business, where she was chosen by IBM to attend (6m50s).
• Munce's time at IBM research lab was marked by her work in machine vision, which was a key area of research at the time, and she was part of the lab for the first 15 years of her career (6m25s).
• Munce's experience as a corporate investor in Silicon Valley was marked by the challenges of being a minority in a field dominated by legendary VCs like Heidi Roizen, but she was able to establish herself and make a name for herself in the industry (8m0s).

Venture Capital Principles and Practices

• Creating a network that can help progress in a mission involves understanding the importance of people and relationships, as people are what drive companies and are complicated, messy, and amazing. (9m43s)
• A key lesson learned from being on the board of the parent company of the Daily Mail is that headlines are crucial, and if an article ends in a question mark, it's likely not true. (10m17s)
• As a venture capitalist, one of the most important things learned is that people don't change, but technologies, platforms, and emerging things do, making it essential to focus on the people driving companies. (11m10s)
• After being on over 40 boards, it's clear that being a successful venture capitalist is all about the people, and it's essential to be good at understanding and working with them. (11m50s)
• Venture capital is about two things: hunting and farming, with the hunting part involving getting out there, looking for deals, and meeting people, while the farming part involves nurturing and growing existing relationships. (12m22s)
• As a venture capitalist, it's essential to have a sector focus, areas of expertise, and a thesis of your own to pursue, and to be able to recognize a good opportunity when you see it. (12m47s)
• Venture capitalists are not the creative people coming up with ideas or running companies, but they need to know what they're looking for and be able to identify a good opportunity. (12m58s)
• Venture capitalists can be categorized into two types: those who look at the "bright shiny object" and invest, and those who are "deep sea divers" that understand what they're looking for and where it's likely to be, with the latter being more likely to find something that fits their model (13m34s).
• To be a successful venture capitalist, one needs to be a good "hunter" and find the right investments, but also a good "farmer" and help the companies in their portfolio grow and succeed (14m39s).
• Being a good farmer is more challenging than it seems, as it requires working behind the scenes and being a "people whisperer" to help the companies' leadership teams be successful (15m24s).
• The role of a venture capitalist on a company's board is not just about governance, but about helping the company's leadership team make good decisions and navigate difficult transitions (15m12s).
• The transition from being an operating person to a venture capitalist can be challenging, as it requires learning to step back and not try to "fix" everything, but rather to help the company's leadership team succeed (15m36s).
• The most important work a venture capitalist can do as a board member is often invisible, as it involves helping the company's leadership team make good decisions and navigate difficult transitions without being directly involved (16m3s).
• The author prefers the "farming" aspect of venture capital work, which involves helping companies grow and succeed, to the "hunting" aspect, which involves finding new investments (16m24s).

Relationships and Transactions in Venture Capital

• The author's current role involves working with junior partners and portfolio companies to help them navigate difficult transitions, and serving on boards to provide guidance and support (16m45s).
• Life is about relationships and not transactions, and this is especially true in the venture capital industry where people come back over and over again and can find out about each other's behavior (17m17s).
• Venture capitalists who are very transactional can get in trouble and damage their reputation, as they may make decisions that optimize for their own situation over the portfolio company's best interest (17m24s).
• In the venture capital industry, people learn from their experiences, including bad deals, and build their reputation on how they handle those situations (17m34s).
• Young venture capitalists who have never seen bad behavior may not understand the importance of prioritizing the portfolio company's best interest over their own situation (18m10s).
• There are situations where venture capitalists may prioritize their own job security over the company's best interest, such as avoiding a down round to keep their job, even if it's not in the company's best interest (18m37s).
• The speaker learned a valuable lesson about the importance of prioritizing relationships over transactions during their time as a venture capitalist, especially during the challenging years of 2000 (19m22s).

Heidi Roizen's Influence and Insights

• The speaker values their friendship and collaboration with Heidi Roizen, and appreciates seeing two legendary role models in the venture capital industry who are friends with each other (20m0s).
• Claudia Munce shared a pivotal moment that drew her closer to Heidi Roizen, which occurred when she became the head of the Venture for IB and attended the annual meeting of the National Venture Capital Association (20m22s).
• Claudia Munce attended a women's gathering in 2001 where Heidi Roizen spoke about the crisis in the marketplace with bluntness and honesty, which was eye-opening and refreshing at a time when most people were in denial (21m19s).
• Heidi Roizen's podcast, "Heidi in Principle," aims to provide helpful and honest feedback to entrepreneurs, preventing them from falling into major pitfalls, which benefits both entrepreneurs and investors (22m17s).
• Heidi Roizen appreciates Claudia Munce's bluntness and honesty, citing an instance where Claudia provided a more useful introduction to a company by suggesting the person who actually gets things done, rather than just introducing her to the head of the department (24m24s).
• Claudia Munce is considered a legendary role model due to her ability to will the legitimacy of the corporate venture investor into place, starting from a time when it was not widely accepted (24m55s).
• Claudia Munce's character and attributes, such as her honesty and bluntness, make her a great example for the next generation of aspiring leaders (23m51s).
• Heidi Roizen values Claudia Munce's refreshing honesty, which is rare in their community, and appreciates her willingness to provide helpful and honest feedback (23m9s).

The Rise of Corporate Venture Capital

• The idea of corporate venture capital was initially met with skepticism, and many people, including those in the venture capital community, were hesitant about corporate venture capitalists due to their perceived different agenda and goals (25m5s).
• Corporate venture capitalists primarily invest with a strategic goal in mind, whereas traditional venture capitalists focus on cash-on-cash returns (25m50s).
• The corporate venture capital community has grown significantly, with over 2600 corporate investors represented, and now accounts for almost 50% of all capital invested in venture capital (27m51s).
• Claudia Munce's transition from a corporate executive to a venture capitalist was inspired by the growing importance of corporate venture capital in the market (27m8s).
• When considering a similar career transition, it is essential to learn about the venture capital community and understand the job requirements, as Claudia Munce did when she entered the field (28m52s).
• The growth of corporate venture capital is a relatively recent phenomenon, with many corporations attempting to invest off their balance sheets or with their pension funds since the 1970s, but the current wave of corporate venture capital is still ongoing (28m28s).
• Heidi Roizen notes that Claudia Munce played a crucial role in bringing the corporate venture capital community together and promoting the investment philosophy, which has led to the growth of the industry (26m16s).
• The National Angel Capital Organization (nbca) was initially hesitant about corporate venture capitalists, but Claudia Munce's efforts helped to bring the two communities together (25m19s).
• The corporate venture capital community has grown to the point where its meetings now outnumber those of the nbca, with over 1,000 people attending (26m28s).

Building Networks and Relationships in VC

• Before graduating, a job was offered without an application, providing a comfortable and nurturing environment, especially for someone who barely spoke English, with the company offering accent reduction classes and coaching on professional behavior (29m6s).
• A 26-variable matrix was established to evaluate potential investors, considering factors such as investment thesis, track record, team reputation, fund size, and follow-on investments (29m52s).
• Many leaders in the community initially rejected the approach, stating that they didn't need the company's help, but patience and persistence ultimately led to successful relationships with real investors (30m30s).
• The experience taught the importance of being patient, identifying genuine investors, and not following "shiny objects" that may not be sustainable (31m12s).
• The transition into a successful organization operating in a new ecosystem required passion and establishing a strong network, particularly with venture investors (31m28s).
• The IBM Venture group was the company's first initiative working with the venture community, and it was met with internal skepticism, but ultimately established incredible ties with investors (31m40s).
• The key to success in transitioning between environments is having the right network to lean on, and knowing when to walk away from people or opportunities that aren't a good fit (33m3s).
• The ability to know when to "fold" and walk away from a situation is an important quality that corporations often lack, but is essential for success in the venture community (32m37s).
• When transitioning to a new career, it's essential to understand the role you have and not overstep boundaries, especially if you're used to being in a leadership position, such as a CEO (33m26s).
• One of the biggest mistakes to avoid is trying to run the company as if it's your own, which can be challenging for those who have been CEOs for a long time (33m41s).
• A notable example of this mistake is an investor who, despite being a billionaire, struggled to adapt to not being in a leadership role and would often try to tell the entrepreneur what to do (33m51s).
• The biggest "do" in career transitions is to have empathy for the role and the people involved, which is a valuable trait for those coming from operating roles (34m32s).
• Having empathy allows you to understand the challenges that others face, such as making difficult decisions like laying off employees, and being able to offer support and guidance (35m2s).

Personal Branding and Social Media Presence

• When it comes to balancing personal persona with public branding, it's essential to be authentic and strategic in managing your public image (35m46s).
• Heidi Roizen has a podcast called "The Case of the Social Media Meltdown," which discusses the importance of being mindful of your online presence and how it can impact your career (36m9s).
• Roizen aims to create evergreen content that is useful at any time, but sometimes her podcasts coincidentally align with current events, such as a high-profile social media scandal (36m35s).
• For those with a high-profile career, it's crucial to think about how your social media presence reflects your personal brand and to be intentional about the image you project (36m51s).
• When posting on social media, consider whether you are willing to be hated for your views, as it can affect not just you, but also your employees, investors, and customers (37m7s).
• It's essential to think about the potential impact of your posts, especially if you hold a position of influence, such as sitting on boards with people from different political backgrounds (37m40s).
• However, some individuals may choose to post about certain topics, such as supporting marginalized communities, even if it means facing backlash, as it is a matter of personal importance (38m13s).
• Anyone can discover anything posted online, so it's crucial to be mindful of the content you share, as it can have far-reaching consequences (38m42s).
• Being authentic is important, but it's also essential to be measured in expressing your viewpoints, especially when representing a company or venture firm (39m6s).
• Representing a company or organization can limit your ability to express your true opinions, and it's necessary to consider the potential impact of your words on others (39m39s).
• Finding a balance between being authentic and being mindful of your audience is key, as it's not always possible to express your true feelings without considering the consequences (40m36s).
• Ultimately, it's crucial to think carefully about what you post online and how it may be perceived by others, as it can have a lasting impact on your personal and professional life (40m46s).

Emotional Stamina and Long-Term Vision

• To be successful in one's career, it is crucial to have emotional stamina, which allows individuals to express themselves constructively, even in difficult situations, and to maintain a long-term view when dealing with others, as the community is small and reputations can be easily obtained (40m53s).
• Burning bridges is not advisable, as one may need to cross paths with the same people again in the future, and having a transactional point of view can be limiting, given the interdependencies within the community (41m28s).

Strategies for Building Relationships in VC

• Building relationships is vital in the venture capital (VC) industry, and it is essential to identify the most respected investors and cultivate deep relationships with them, which requires a level of investment, quick profiling, and the ability to articulate one's value proposition (43m58s).
• When building relationships, it is crucial to offer value to the other party, whether through sharing one's viewpoint, providing technological understanding, or helping with due diligence, and to identify people who can create a mutually beneficial value proposition (44m56s).
• Once a reputation for adding value is established, it becomes easier to build relationships and maintain a strong network, as people are more likely to want to work with someone who can provide value (45m17s).
• In the VC industry, it is essential to understand the global landscape, including the fact that venture capital represents almost 50% of all invested capital, and to be aware of the leaders and followers in the global venture community (43m25s).
• Claudia Munce's approach to building networks and relationships involves identifying the most respected investors, having a deep understanding of the marketplace, and offering value to the other party, which has been successful in her career and has been written about in case studies at Harvard Business School (HBS) and Stanford (43m8s).
• Corporate investors were previously referred to as "dumb money" in the venture industry, but studies have shown that corporate money actually has a higher level of success (45m40s).
• Large corporate investors can be beneficial to companies as they are often the ones who acquire these companies, providing an exit opportunity (46m16s).
• Building relationships with corporate investors can increase the chances of a successful acquisition, as seen in IBM's experience where 72 out of the companies they acquired had prior venture investment and business relationships with them (46m51s).
• Having a relationship with a corporate investor can also provide a strategic partnership, offering distribution power and global reach (48m1s).
• Founders should consider all exit alternatives and not shut any doors, including the possibility of a strategic acquisition by a corporate partner (47m31s).
• Corporate investors can provide valuable resources and expertise to young startups, making them a potentially strategic outcome for the company (49m24s).
• Despite the benefits, some companies still do not recognize the value of corporate investors, which is unfortunate given that 50% of capital comes from this source (49m37s).
• Building relationships with corporate investors can be crucial for a company's success, and founders should prioritize this aspect of their business strategy (45m24s).

Heidi Roizen's Approach to Networking

• Heidi Roizen has been featured in both HBS and Stanford cases, and when asked what she would do differently in her approach to networking and building relationships, she stated that she wouldn't change anything, as she believes in being genuine and showing up as herself (49m46s).
• Roizen now has the luxury of choosing not to do business with difficult people in the industry, which was not an option earlier in her career, and she advises others to be cautious when dealing with such individuals (50m40s).
• She notes that some successful people in the industry can be difficult to work with, and it's essential to prioritize one's own well-being and values when making business decisions (51m20s).
• Roizen emphasizes that it's a luxury to be able to choose who you work with, and she now prioritizes working with people who share her values and are pleasant to be around (51m52s).

Advice for Minorities in VC

• Claudia Munce was asked to provide advice to minorities, including Asian and women, who are aspiring to make a mark in the VC industry, and she believes that often, individuals can be their own worst enemies by putting roadblocks in their own progression (52m59s).
• Munce notes that cultural components, such as being told not to be too loud or to stand up too much, can hinder one's career progression, and she advises individuals to be confident and assertive in their pursuits (53m28s).
• Munce credits her Brazilian upbringing for helping her navigate cultural clashes and find her voice in the industry, and she encourages others to do the same (53m45s).
• The speaker's cultural background, being both Chinese and Brazilian, has influenced their confidence levels, with the Brazilian side contributing to an "almost overconfidence" that helps them approach situations with a willingness to take risks and learn from mistakes (54m8s).
• In contrast, the Asian culture emphasizes avoiding mistakes and doing everything right, which can make it difficult for individuals to accept and learn from failures (54m54s).
• The speaker's advice to Asian women is to recognize that their differentiated identity is an asset, not an inhibitor, and to speak up, advocate for their own careers, and ask questions when necessary (55m32s).
• Many talented individuals, especially Asian women, may feel underutilized in their roles, but it's essential to know what they want and go after it, rather than waiting for opportunities to come to them (56m28s).
• Empowerment is key, and individuals should feel confident in asking for what they want and questioning why they're not getting certain opportunities (56m56s).
• The speaker's personal experience of having two brothers who wanted to fight her every day helped her develop a sense of power and confidence, which she believes contributed to her career success (57m8s).
• It's essential to ask questions and seek help when needed, and there's nothing wrong with doing so in one's own career (57m43s).
• When faced with challenges, such as being talked over in meetings, individuals should remind themselves that they have a right to be there and consider finding a champion to support them (58m9s).
• To effectively communicate in a meeting, especially when being interrupted or not given a chance to speak, it's helpful to have a champion who can support and amplify your voice, and this can be achieved by discreetly asking a senior person in the room to intervene on your behalf, such as by making a hand signal and having them say "I'd like to hear what Heidi has to say about that" (58m19s).
• Having a champion is crucial for career advancement, and it's essential to ask someone to be your champion, as people are more likely to listen to someone who is advocating on your behalf (58m50s).
• Even peers can be champions for each other, and advocating for others can help create a more inclusive environment, especially for minorities (59m10s).
• As people advance in their careers, it's essential to remember to pull others along and create opportunities for them, rather than just focusing on personal success (59m40s).

The Power of Humor and Building Relationships

• Using humor can be an effective tool in diffusing tense situations and building relationships, but it's crucial to use it carefully to avoid belittling oneself or others (1h0m17s).
• Humor can be used to ask questions or seek clarification without appearing weak or uninformed, and it's essential to be mindful of the audience and the context in which humor is used (1h0m30s).
• A personal example of using humor to diffuse a tense situation was when Heidi knocked on the men's room door during a heated board meeting and joked about joining the conversation, which helped to break the tension and refocus the discussion (1h0m49s).

Recommended Future Speakers

• Emily Melton, a Stanford GSB grad and 20 years younger than Heidi, is someone who exemplifies thought leadership and is recommended as a future guest speaker, with experience in venture and being the chairman of the NBCA (1h2m19s).
• Maggie Wilderotter, one of the most border women in the United States, is another recommended guest speaker, having started her board member career at 28 and serving on numerous public and private company boards, including Costco (1h3m5s).
• Maggie Wilderotter has put over 800 people on company boards, mostly women and minority first-time board members, and has developed a "rolodex" of people to help them overcome the obstacle of getting their first public company board position (1h4m48s).
• Maggie Wilderotter's efforts have resulted in 821 people being placed on public company boards, demonstrating the impact a single individual can make (1h5m32s).
• Having Maggie Wilderotter as a speaker would be inspiring for those who have the ambition to serve on boards (1h5m52s).

The Importance of Personal Connections

• Having a strong foundation of people in life is crucial, and it's the relationships that matter the most, not the level of success or recognition one achieves (1h6m36s).
• The importance of having people who care about you in life is highlighted, with the example of being jealous of someone who has a grandchild, indicating a desire for that kind of personal connection (1h6m41s).
• The role of mentors and champions in one's career is emphasized, with the acknowledgment that these individuals can be from different backgrounds and stages of life (1h7m6s).

Trends and Evolution in the VC Industry

• The venture capital (VC) industry is discussed, with the observation that it has become more like Wall Street, especially for young entrepreneurs, with a focus on growth and formality (1h7m56s).
• The question is raised about new trends in the VC industry, with the example of reinventing the pre-seed model with demo days and bringing people together (1h8m28s).
• The response is that the VC industry hasn't changed much, and it's still about people and networking, with the experience of connecting with others being a key aspect (1h8m41s).
• A generational change is noted in the VC industry, with established firms going through leadership changes and new generations taking over (1h9m5s).
• The core operating factor in the venture business is identified as being about building relationships and trust with people, including how investors treat others in times of crisis (1h9m25s).
• The importance of people and relationships is reiterated, with the acknowledgment that even entrepreneurs are human beings first and their job second (1h10m13s).
• The potential impact of AI on the VC industry is mentioned, but the focus remains on the importance of people and relationships (1h10m3s).
• A junior team member came up with a creative idea to win a competitive deal by adopting a wolf in the name of the entrepreneurs, whose company culture values dog lovers and has "wolf" in its name, which helped build a personal connection and ultimately win the deal (1h10m34s).
• Building relationships with entrepreneurs early on is crucial in the venture capital industry, as it allows for a deeper understanding of the people and their companies, which can be a deciding factor in winning deals (1h11m36s).
• Meeting entrepreneurs earlier in their journey, rather than just during their fundraising cycle, is essential for building relationships and understanding their needs and values (1h11m59s).
• The venture capital industry is constantly renewing itself, with new generations of venture capitalists playing an important role in discovering and supporting new entrepreneurs and companies (1h12m26s).

Data-Driven Approach vs. Human Insights

• A data-driven approach to venture capital, which involves collecting data on startups and analyzing common attributes of successful founders and companies, may not be effective due to the limitations of available signals and the early stage of the companies (1h13m51s).
• Relying solely on available signals, such as LinkedIn data, may not provide an accurate indicator of a company's success or potential, especially in the early stages (1h14m11s).
• The 409a valuation process is considered somewhat meaningless as it captures various factors but does not account for a company's potential disruptiveness, team quality, or leadership quality, and can penalize companies for having less money in the bank even if they are about to hit a significant milestone that will increase their value (1h14m25s).
• Entrepreneurs raise money to spend it, not to keep it in the bank, and relying too heavily on available signals can cause investors to miss the best companies (1h15m15s).
• Data collection and analysis can be used as an argument for decision-making, but it should not be the sole basis for due diligence, and investors should consider whether they have seen a particular situation before (1h15m51s).
• As an engineer, data is important, but it should be used as an augmentation of decision-making, not the only factor (1h16m25s).

Key Factors for Investment Decisions

• When considering funding a deal, core elements to look for include a compelling idea, understanding of the market and technology, and a high level of conviction from the entrepreneur, as they will need to iterate rapidly to reach product-market fit (1h16m55s).
• Conviction is a key differentiator between a public board CEO and a venture-backed CEO, as entrepreneurs need to believe in their idea and be able to execute it, and investors should be able to sense this conviction when meeting with entrepreneurs (1h17m29s).
• Domain expertise is also important, as entrepreneurs typically have more knowledge about their specific area than investors do (1h18m10s).
• Venture capitalists often rely on a founder's conviction to believe in the potential of their concept, which is crucial in the early stages of funding, as it can take an average of seven rounds of funding to reach a commercially viable product (1h18m20s).
• Two key factors to consider when investing in a company are whether it has the potential to become a big, successful company with massive revenue, profit, and growth, and whether the founder has the growth mindset, tenacity, and skill set to lead the company through difficult periods (1h19m0s).
• A founder's history of success is not always a determining factor, as some entrepreneurs may not have a track record but still possess the necessary qualities to succeed (1h19m35s).
• Venture capitalists may be prone to overfunding narcissists, as they often come in with a lot of conviction and charisma, but this can be a pitfall, and it's essential to consider the potential risks (1h19m55s).
• A founder's ability to convince not only investors but also customers, employees, and regulators is crucial, and their conviction and leadership skills are essential for success (1h20m18s).
• Heidi Roizen's experience as a venture capitalist has taught her that investing in companies with good market ideas but weak teams often leads to failure, and she has learned to prioritize the team's strength and potential (1h20m51s).
• Heidi Roizen's contact information is provided for those who may have questions or want to reach out to her, and she is happy to answer questions and provide guidance (1h18m53s).