‘If you don’t fix your diversity problem, I’ve got no time for you’: VC Amy Nauiokas
- So many early stage companies fail, it's important to focus on people's ability to lead a company and idea -- not the idea itself.
- There isn't a problem with female founders' access to funding, but there certainly aren't enough female founders, Nauiokas said.
This is Ask a VC, where we quiz venture capitalists on the latest trends in the finance space.
Like many investors, Amy Nauiokas invests in people, not ideas.
“Companies are more than just an LLC and a pile of cash,” said Nauiokas, founder and president of Anthemis, a financial technology investor. “They’re made up of founders and from there they grow. And when you look at a company’s culture you don’t have to look much past the founders to figure out where they need to go.”
Anthemis invests in early stage technology companies focused across the industry — retail banking and consumer finance, business and corporate banking, payments, wealth management, capital markets, insurance and funds. It’s currently invested in Betterment, Trov, Payoff, SeedInvest and Currency Cloud; her exits include Fidor Bank, which BPCE acquired last year, and Simple, which BBVA acquired in 2014.
Nauiokas, the former CEO and managing director of Barclays Stockbrokers, also founded Archer Gray, a media production, finance and investment company, in 2010. Anthemis launched that year too, though it had begun investing in 2008, as its digital financial services investment and advisory firm. Tearsheet caught up with her to talk about the importance of investing in people instead of products and the need for VCs to work harder for achieve gender equality.
There’s a lot of noise in “fintech.” How does that affect you as an investor?
If someone claims to be the next Uber or Airbnb for financial services, we tend to take that at face value but really challenge that assumption. It’s the one industry where it’s very difficult to simply create a business, dump it on top of technology and call it done. There’s a lot more complexity, market structure and risk.
How much of the decision to invest has to do with people and skills that perhaps can’t be taught?
We do look for that level of ambition, but in our weeding process and getting rid of the noise — whether it’s fintech noise or investor noise — it almost always comes down to people. Early stage is a tricky, tricky business. So many early stage companies fail. And so many people need their biggest capital infusion before they have any revenue. You have to be able to appreciate that the product might not be the name of the game here.
But the product is important. How do you couple that with the people factor?
First we focus on the people, and then if they have a solvable problem, a problem they want to solve that’s big enough to create a business — and then we figure out the problem. And we’re finally starting to see that people are thinking outside of the box. That’s extremely refreshing to me.
What’s driving that change?
I hope part of the reason is that investors like us are pushing people to challenge themselves, to appreciate that if you’re one man — and I’ll say man because it’s almost always a man, right? — with an idea, the chances of you succeeding without a different opinion, a different set of skills, is pretty low.
There’s a conversation about a lack of funding for women-owned startups due to the lack of women in venture capital. Where do you stand on that?
You’re going to go long and hard to find that many senior VCs that are female. I dont think there is an issue with female founders getting funding per se. I don’t think VCs are pound for pound biased against female founders. We aren’t seeing enough female founders, we aren’t encouraging, finding, demanding enough to be able to make an honest opinion about who is going to be giving that funding.
Do you ask your companies about their plans for diversity?
All of them. If you started yesterday, you’ve got big employees, you’re one of them, you’re a founder, if you don’t fix your problem I’ve got no time for you. Goldman Sachs has done probably better than anyone at trying to encourage bring more women to the table but it is a multi-hundred-year-old organization from a time women weren’t in the workforce. We’re living in a different world and there’s no excuse for it, for selling a product to a population that holds more than 50 percent of purchasing power and not having a female voice on your board or in your C-suite.