Elizabeth Edwards Of H Venture Partners: “Persistence ”

Persistence — Stick with it! Pitch 999 times and get 998 no’s. A lot of founders can be dissuaded from talking to people who don’t believe in them, but you must believe in yourself and keep going. There’s constructive feedback in No’s — use it and keep going. As a part of our series about “Why We Need More Women […]

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Persistence — Stick with it! Pitch 999 times and get 998 no’s. A lot of founders can be dissuaded from talking to people who don’t believe in them, but you must believe in yourself and keep going. There’s constructive feedback in No’s — use it and keep going.

As a part of our series about “Why We Need More Women Founders”, I had the pleasure of interviewing Elizabeth Edwards.

Elizabeth is the founder and managing partner of H Venture Partners, a venture capital firm which focuses on investing in science-based consumer brands that are better for human health and better for the environment. Over the past 15 years, she’s invested in over 30 companies in seed through early growth equity all over North America.

Before founding H Venture Partners, she led investments for Maywic Select Investments, a Seed and Series A/B investor in consumer products and devices focused on consumer health, wellness, and wellbeing. Maywic’s portfolio includes Peloton (IPO), Freshly (acquired by Nestle for 1.5 Bn dollars), Farmer’s Fridge, Joy, Aloha, One Hope Wine, GoldieBlox, Happify, Barnraiser, OurCrowd, Abe’s (acquired), The Infatuation, Roots (IPO), Soma (acquired by Full Circle), and SkinnyMom (acquired by Womanista).

Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?

I was lucky to get into the venture capital world at a young age. Many people don’t realize that the VC industry is tiny; there are only around 100,000 people in the industry globally. Comparatively, Deloitte has around 300,000 employees globally, and Procter & Gamble has around 100,000 employees — so literally there are as many people working at one company as there are working in the entire venture capital industry.

My introduction to the world of venture capital was as a strategy consultant at Deloitte. At Deloitte, I was in a group called the Innovator’s Solution, a group that operationalized the work of Clayton Christensen (HBS) and Michael Raynor (Deloitte Research). There, one of my main clients was Johnson & Johnson. We spent a lot of time thinking about what J&J would look like in ten years and trying to find technologies for them to license and acquire. I was talking to consumers and scientists and startups all the time and I loved it.

The more time I spent with entrepreneurs, the more I wanted to be on that side of the table — the risk-taking company-building side of the table. I wanted to spend more time with those types of folks — and that’s what led me to venture capital. Seventeen years later, here I am.

Can you share the most interesting story that happened to you since you began leading your company?

I get a lot of questions as an early investor in Peloton about what drew me to that brand. Around 2014, I was already investing across North America (at that point we were mostly doing conference calls), and so it wasn’t unusual to look at a New York-based company even though I was based in Cincinnati.

When I first heard the pitch for Peloton, a couple of things occurred to me. One — this team is incredible. Why is it that they were having trouble raising capital? If you look at the team, they have everything — domain expertise, category expertise, previous exits, experience working together as a team, complementary skill sets, and there was a lot of executive and startup talent on the founding team, including technical backgrounds and Harvard Business School degrees. Still, they had pitched to over 900 investors, and heard lots of no’s — too capital intensive, too early, hardware is too risky, etc.

The second thing that drew me to Peloton was the way they were solving this problem. They replicated that cult-following feeling that studios have — and they recognized that people prefer to exercise with other people. The brand Peloton means “Together we go farther”. When you’re on a Peloton, you’re going to work harder and get to the finish line — just like if you’re running a marathon. You want to finish with everyone else. And that sense of community is what you don’t see in every other piece of gym equipment.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

I will do anything for my firm, and when we first started out, I did a lot of traveling. For one of the first conferences we were invited to, I knew it was important for us to attend, but the conference hotel was sold out. I thought the conference was such a great opportunity, but I was also really trying to keep costs down because it’s not cheap to start a venture capital firm. The conference was on the harbor and the only other available hotel was far away. So I checked Airbnb and the only thing that was close by was a boat in the harbor that — no joke — looked like the boat from Gilligan’s Island.

So I booked this old wooden boat for a week during this conference. My mistake was not realizing that there was a six-foot drop in between the dock and platform to get onto the boat. So for a week, I went up and down this ladder in a suit, high heels, and a briefcase, not to mention having to lug my suitcase on and off the boat.

Every time I got on and off that boat in that outfit, I felt like there was a 50/50 chance I’d end up in the water.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

There are so many people who have helped me along the way, but one that comes to mind is Kelly Williams, who is the founder of Private Equity Women Investor Network, which is an organization of senior women leaders in private equity. She has always been very generous with her time, network, and knowledge, not just to me but to a lot of female asset managers. She started a program called Project Pinklight, an accelerator program designed to help women launch their own private equity funds. That program helps with practice pitches and provides feedback on what investors are looking to hear from a fund manager and how one should answer investor questions, providing constructive criticism and advice to emerging managers.

Another person is Kim Jordan who was the former Head of Global Haircolor & Care R&D for Procter & Gamble. She was the person who told me that only 1% of all invested capital goes to female and minority managers. And she found out in a pretty dramatic way.

She went to an event for women at her wealth management firm, and at the end of the event she raised her hand and asked, “What percentage of my portfolio is invested with female fund managers?”

The answer? Zero percent.

After hearing that, she was all fired up and went straight from that event to our office. She marched in and said, “I want to invest in your fund.”

So that prompted me to do research on this disparity — and start working on solutions to bring more transparency into the investment world. If women knew that only 1% of their money is managed by female fund managers, I think they would make different investment decisions with their retirement accounts — and we would see more women on public boards or as fund managers, as well as more capital flowing to female-founded companies.

Ok, thank you for that. Let’s now jump to the primary focus of our interview. According to this EY report, only about 20 percent of funded companies have women founders. This reflects great historical progress, but it also shows that more work still has to be done to empower women to create companies. In your opinion and experience, what is currently holding back women from founding companies?

One of the big hurdles is the gap in the capital markets. Even though women account for two-thirds of all wealth and 51% of the population, only 1% of that wealth is invested with female fund managers. So female founders have very few female VCs to pitch to — meaning very few investors that may identify with them as founders or identify with the problems they are solving. Female VCs are twice as likely to invest in female founders. So, if we can get more female VCs — and there’s plenty of room for growth there — I believe we will see more female founders getting backing.

Can you help articulate a few things that can be done as individuals, as a society, or by the government, to help overcome those obstacles?

The primary one is transparency in capital markets. Wealth managers should be required to disclose the gender, race, and ethnicity of the owners of the funds they are invested in. This allows people to make their own decisions. Right now, I can see the fees and expenses of any fund I am invested in and I can see the return, but I don’t see any Diversity & Inclusion statistics.

If anyone saw a report that every single year your portfolio was 100% invested with one gender, they’d wonder, “Is this a meritocracy? Is my wealth manager any good?” Transparency is key for people to make their own decisions.

This might be intuitive to you as a woman founder but I think it will be helpful to spell this out. Can you share a few reasons why more women should become founders?

Founders change the world — and women have a lot to contribute. We have a different lived experience — and I think we can impact this generation and be an example for the next one.

What are the “myths” that you would like to dispel about being a founder? Can you explain what you mean?

The biggest myth of entrepreneurship is that it is easier than a day job. It is so much harder. It consumes your life. You must be all in.

A lot of people at big firms say they want more flexibility, so want to start their own company, but don’t realize how all-consuming it is.

Is everyone cut out to be a founder? In your opinion, which specific traits increase the likelihood that a person will be a successful founder and what type of person should perhaps seek a “regular job” as an employee? Can you explain what you mean?

To go from an established organization where you’re one of many to then being the one person that is part of every function — that is something a lot of people find very difficult. As a founder, you usually start with little to no support, invest all your resources, and take a big risk. In order to be a founder, you must embrace risk and have persistence. 999 people can tell you no, but you’re going to keep pitching. That is what it takes to keep growing and be successful.

Ok super. Here is the main question of our interview. Based on your opinion and experience, what are the “Five Things You Need To Thrive and Succeed as a Woman Founder?” (Please share a story or example for each.)

  1. Patience — Entrepreneurs are by nature impatient people, they want everything to happen yesterday, they are going at a frenetic pace in most cases, but there are no real overnight successes.
  2. Persistence — Stick with it! Pitch 999 times and get 998 no’s. A lot of founders can be dissuaded from talking to people who don’t believe in them, but you must believe in yourself and keep going. There’s constructive feedback in No’s — use it and keep going.
  3. Emotional Sounding Boards — Entrepreneurship can be so lonely. I remember being hugely pregnant, sitting in an office on Christmas Eve by myself downtown, and remember this moment thinking, “Man, this is so hard. Maybe I just need to get a day job”. You need a sounding board that is more than a business sounding board; you need an emotional sounding board because entrepreneurship can be isolating at times.
  4. Business Advisory Board — Emotional sounding boards are cheerleaders and friends that believe in you, but separately you need a business advisory board to bat the ball around strategically with people who know the industry, know your business, and can help strategize and make connections to help propel you forward.
  5. A great spouse/partner — One of the most overlooked roles in startups is the spouse or partner of the founders. They are usually the person who supports the family when you’re on the road, not getting a salary for the first few years and essentially holding down the fort at home. This person allows you to take the risks and work the long hours.

How have you used your success to make the world a better place?

This is the reason I started H Venture Partners. Female founders were being overlooked by VCs — and the entire consumer sector as well.

At the same time, the consumer sector has a huge impact on human health and the environment — ranging from the food supply chain, apparel, plastic, the use of Round-up in our crops, and what ends up in landfills. The impact that consumer venture capitalists can have on the environment is massive. Shockingly, only 3% of VC dollars go to consumers even though 69% of our GDP is consumer spend.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.

One of the initiatives I’m actively working on and talking to folks on Capitol Hill about is bringing transparency to the financial services/wealth management sectors and to shine a light on the lack of diversity, inclusion, and meritocracy.

I want to see female and underrepresented fund managers and startup founders get funding, scale, and generate returns for investors that are aligned with their values.

We are very blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.

Kamala Harris, so I can say hello and tell her that her — or any woman’s — run for the presidency will be that much harder if 99% of the capital is controlled by one group. It’s time for transparency around diversity and inclusion in the financial markets — and I think it will have a positive ripple effect in every aspect of our economy and democracy.

Thank you for these fantastic insights. We greatly appreciate the time you spent on this.

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