As a VC, you should go with your heart as much as what the numbers say. Sometimes it makes no sense to invest in a company other than to follow your gut. A little irrational exuberance shouldn’t just be for founders.
Past success is a good predictor of future success. Bet on those that have moved mountains before.
As part of our series about “5 Things I Need To See Before Making A VC Investment”, I had the pleasure of interviewing Sarah Heering of Muzik.
Sarah has, alongside CEO Jason Hardi, created a fantastic team to support MUZIK’s business operations. Sarah is a media entrepreneur and tech startup founder. She most notably started ‘NailSnaps,’ the only mobile/social nail design system, as a breakout innovation in the custom beauty/fashion vertical. NailSnaps won the 2017 NAWBO Innovation of the Year Award before its exit in 2019. Prior to that, Sarah ran a successful digital media agency for ten years, which was utilized by some of the most renowned brands and advertising agencies. Sarah is an experienced marketer with an analytics approach to media, advertising and e-commerce, combined with a creative approach to customer communications and business strategy. Sarah does an incredible job diligently allocating both human and financial capital resources in efficient ways.
Thank you so much for joining us in this interview series! Before we dig in, our readers would like to get to know you a bit. Can you please share with us the “backstory” behind what brought you to this specific career path?
I guess, I should start stating that I’ve never seen my career path as ‘specific’. What I do know is when I was 10 years old, my biggest dream was to get horseback riding lessons, but my parents thought that was a fleeting desire. It forced me to find my own way to make that happen.
I set out in rural Pennsylvania with a bucket under my arm to clean horse stalls and met a very nice family in the process who ended up giving me the horseback riding lessons while I took care of their two young kids in return.
That experience taught me I could do anything if I set my mind to it and it’s been the defining factor in everything I’ve done since. I’m an entrepreneur with capital ‘E’. That said, for the first time in my career I joined an already existing company called MUZIK, I fell in love with the founder’s passion and vision to change the world through connecting culture and technology. It’s an 8 year old company but still rooted in start-up culture and I’ve been given the reins to tackle the execution of his massive vision. There’s no shortage of excitement in rolling up my sleeves.
Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
“In keeping yourself with labor, you’re in truth loving life, and to love life through labor is to be intimate with life’s inmost secret.”
This quote is from a book called “The Prophet” by Kahlil Gibran. My mother gave it to me when I left home as a 19-year old to go to California. The book is a well-known philosophy book that touches on all sides of life. It holds a dear place in my heart and remains important to me till this day. I keep finding new perspectives in the text every time I revisit it which I do at least once a year.”
Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?
“All anyone wants to become is themselves”. This is a famous quote by Nietzsche. I think it speaks for itself.”
How do you define “Leadership”? Can you explain what you mean or give an example?
If there’s one word that to me defines GOOD leadership, it’s the word ‘empathy’. Obviously, as a leader, you need to have a concise vision, you need to communicate that vision clearly and lay the foundation for an effective process along with that, but ultimately it’s the people you’re working with that’s going to lift the burden of the work and they have to feel that what they do matters and is, ultimately, bigger than themselves. ’Empathy’ is the glue that ties all of this together and makes a strong team spirit.
On the flip side of the coin also comes the responsibility to identify the ‘bad apples’ because a team is only as good as its weakest link. If there is indeed a “bad apple”, you need to cut it out like cancer; otherwise it will spread.”
How have you used your success to bring goodness to the world?
I remain forever thankful to those who have taken the risk to trust me with bigger opportunities and responsibilities despite me being self-taught. That has always been an inspiration and something which is important for me to bring along to people I meet along my path who I feel deserve equal chance(s) to prove themselves. If that turns out successful, there’s nothing more motivating for both sides and till this day, some of my closest work relationships have been shaped this way, just as I try to give back as much as I can to my local community in my private life. I’m a strong believer community and to pay interest in what’s going on, just as I try to donate to causes I believe can make a difference.
Let’s now jump to the main part of our discussion. The United States is currently facing a very important self-reckoning about race, diversity, equality and inclusion. This is of course a huge topic. But briefly, can you share a few things that need to be done on a broader societal level to expand VC opportunities for women, minorities, and people of color?
I used to think the overall answer to this could be described in the word ‘representation’. Yet, my thinking has evolved due to the complexity of our society and time in which we live; you don’t just need to get to the dance, you need to have people to dance with. As I mentioned above, I think it’s everyone’s responsibility to pay attention to and engage with their community. From a practical perspective, my former business partner and I, along with a half a dozen other female founders formed something called Female Founders Alliance to share fundraising materials and information on raising money for women owned businesses, held bi-monthly round table dinners to coach female founders on raising funds. I’d also like to give credit to people like Arlan Hamelton, a former investor, and CEO of Backstage Capital for not only believing in women like me but also bringing awareness around specific topics such as less than 10% of all VC deals go to women, people of color, and LGBTQ founders and helping to solve for that specifically.
Can you share a story with us about a problem that one of your businesses encountered and how you helped to correct the problem? We’d love to hear the details and what its lesson was.
I’ll give the punchline before the story: networking makes the world go round. In starting my last company, we had major hurdles with manufacturing. We forged a good relationship with a large local facility in Southern California. Due to the nature of the product, we needed to work closely with our manufacturing partner to reimagine custom printing on a specific substrate. The owner of the facility took a liking to our company and we were able to negotiate waived NRE and set up charges — which was a big ask because it took an investment of specific machinery. The owner of the company had unexpectedly fallen ill and our hand-shake agreement didn’t hold up with his predecessor. Upon receipt of our largest order, the manufacturer demanded a large upfront fee to fulfill the order and even a percentage of our company if we couldn’t pay that. We passed and instead ignited our network and hit the pavement on speaking with every manufacturer’s door we could knock on. Our solution came from our dream manufacturer — who also turned us down — but connected us with a local shop with no specialization in what we did but was run by a fierce, creative minded woman that got the job done and saved the order — and our company. You thought the lesson was, “get it in writing?” Yeah, maybe that too,
Here is the main question of this interview. What are your “5 things I need to see before making a VC investment” and why. Please share a story or example for each.
1. Too darn obvious but #1 will always remain team. It is the people that will lift a big idea up and make it happen. A great sign of a good team is if they have worked together on past projects or companies. Having a short hand with one another, company culture, and systems in place is key to success and allows you to get to the finish line faster.
2. Traction. As one VC told me, it’s where momentum meets opportunity. Timing is essential in good deal making for both the VC and founder and validation of an idea is key.
3. Chemistry between the founder and the investor makes all the difference. Everyone wants to make the most money possible and it feels oh so good when you’re in the same boat going downstream together. A good VC/founder relationship is when you’re in lockstep and the VC is there to open up their Rolodex to make things happen. It’s a big reason for the founder to choose which VC they want to work with. Yes, I said ‘choose’ them. It’s a bit like dating.
4. As a VC, you should go with your heart as much as what the numbers say. Sometimes it makes no sense to invest in a company other than to follow your gut. A little irrational exuberance shouldn’t just be for founders.
5. Past success is a good predictor of future success. Bet on those that have moved mountains before.
If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be?
How about re-defining the idea of the free market and capitalism in itself? I think one of the strongest lessons to come out of the time we’re currently living through is witnessing the ineffective and flat out destructive sides of the classic idea of the free market and the core workings of capitalism. This is obviously a longer and more complex conversation, but overall it has to do with the wealth gap that is showing its ugly side more than ever. My wish for a movement today would be to gather all the best entrepreneurs to 1) keep solving problems that can contribute and make the world both better and more efficient while 2) be very conscious of fighting inequality as part of every business plan and model, if we are to hand over a better world to future generations. It involves changing our perspective into long-term thinking rather than what we have gotten too used to from short-sighted “stockholder value” principles.
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why?
First of all, it wouldn’t be breakfast, because I don’t do breakfast 🙂 I would LOVE to have lunch with tennis player and champion Serena Williams. Not only is she a fierce athlete and competitor, a mother and a principle based business woman, she’s the coolest and does it all with grace and style. She remains a huge inspiration to me.
This was really meaningful! Thank you so much for your time.