How does your product or service make the world a better place? I like this one because I want my money to be deployed in companies that have meaning beyond just the generation of more money. I’m a young investor and plan on living on this planet for a long time. I’d like to live in a world where there is more equality, cleaner air, water, and distribution of resources.
As part of our series about “5 Things I Need To See Before Making A VC Investment” I had the pleasure of interviewing Tiana Laurence, a Partner at Laurence Innovation, an investment fund powering the Fourth Industrial Revolution (AI, blockchain, aerospace, protein folding, graphene), which focuses on early-stage companies founded and led by women and other under-represented founders, as well as opportunities in under-capitalized areas.
Tiana is known in the blockchain industry and venture capital space. She’s co-founder of Factom (a blockchain company in Austin, TX), an author of two books, Blockchain For Dummies and Introduction to Blockchain Technology, and an angel investor for tech startups.
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 have always been curious about money and love to read and research. I would dream up businesses as a kid and do jobs for neighbors to earn money. When I was 16 years old, my brother and I had a little business cleaning up construction sites and landscaping. When I was 19 years old, I worked at a bank during the day, the night shift at a hotel, and waited tables on the weekends and barely made ends meet. I had a moment and realized that if I kept working at my jobs, I would never make enough money to buy a house, go on vacation, let alone retire one day. The math didn’t work. There weren’t enough hours in a day and the hourly rate I made was never enough. So I spent time in the public library and got books on how to start a business and invest. I saved up and bought a laptop and learned how to build websites. Facebook had just come out and Google AdWords were starting to become more important than having a phone book listing. I built a company with a partner that helped companies build an online presence — we ran ad campaigns, shot videos, and built websites. I later sold that company. I took that money and re-invested it, co-founded a software company and helped raise capital, build products, and sold them. I kept investing, reading and researching. I do that to this day. Now I run a small fund, and have many angel investments in AI, IoT, blockchain, aerospace, crypto, agtech, and fintech.
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?
I love Ray Dalio’s book, Principles because the way he thinks about things is intriguing to me and in the book, he describes his ruthless pursuit of truth. Specifically, I love his idea of integrating reality — how do you know what you know is real and the credibility of the sources? Another concept I like about his work is the idea of principles. These are the basic ideas you use to make decisions. For example, if the concept of truth drives you, you will interrogate reality even if it makes you feel uncomfortable. You will ask hard questions even if it is unpopular, and you will make the hard decisions to stay in alignment with your principles around truth even if it costs you in the short term.
I also really enjoyed Tiny Habits by Dr. BJ Fogg. I wanted to get more fit even if I felt stuck at home and this book was the catalyst for me to create a habit of working out. I love this book for learning how to hack habit formation and lead a more self-directed existence.
Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?
“Every new beginning, begins with an end.” ― William Bridges from his book, Managing Transitions: Making the Most of Change
I read William Bridges’ book as one of my last required readings for college. At the time, I owned a beautiful house in the suburbs, had been married for nine years, and was an active Rotary member. I felt a bit resentful of this class “managing transitions” and didn’t care too much for this book. I had transitioned, and my life was set. Six months later, I had moved, sold my company, and got divorced. The universe has a funny sense of humor. I remembered this book because it gave some great advice about how to slow down in between significant life changes and how to sit with the lessons from the significant places of pain, look at them as “learning opportunities” and to choose how to show up differently and grow. It also encouraged loving yourself in the pain and discomfort of life’s changes. It’s an excellent read for any entrepreneur who has failed.
How do you define “Leadership”? Can you explain what you mean or give an example?
Leadership has two parts. There is the idea that leadership is influencing and guiding the people around you, but influencing for what purpose? The more exciting part of leadership is holding the vision for what you are trying to accomplish. The great leaders in history have held to their core principles and ruthlessly pursued their goals. This is a very polarizing concept. Steve Jobs, for example, is loved and hated for who he was as a leader. A guy who was known to smash computers and have crazy outbursts, yet his work at Apple and Pixar changed the world. With Apple, his unapologetically pursuit of excellence in user experience made technology sexy and with Pixar, he made multi-dimensional animation that was enjoyable to watch no matter your age.
How have you used your success to bring goodness to the world?
I put my money where my mouth is. I want to see more women invested in, so I invest in women. I want to see more hard tech invested in, so I invest in all technology types, not just SaaS. Each of us has our passions and skills. Mine is money, investing, and technology. The most significant positive impact I can have is investing in technology to solve some of our world’s most challenging problems. I also think investing in diverse founders is the right thing to do and the financially sound thing to do. For example, women-founded companies see about 3% of the venture capital while founding approximately 40% of companies, graduate from top universities at nearly the same rates as men, and help companies achieve 30% higher returns.
Ok, thank you for that. 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?
We need to look at the bias in funding. Specifically, irrational bias and heuristics that don’t have anything to do with the quality of an idea or a founder’s ability to execute on that idea.
Can you share a story with us about your most successful Angel or VC investment? What was its lesson?
I was early in the bitcoin space and helped shape the blockchain industry. This space went crazy in 2017 with many ICOs that did not adhere to basic principles around incentives and value creations. Frankly there was a ton of fraud. I navigated that time by always asking, what is the business model and how does that generate value for the end-user. Having this idea as part of my decision making framework helped me filter out the crap and focus on the companies and teams that were building real technology.
Can you share a story of an Angel or VC funding failure of yours? What was its lesson?
I have had to ask founders to return checks, teams that have not worked on their project, and teams that tried to bait and switch me on the terms we agreed to. This is never fun but is part of the work of being a good steward of capital.
Can you share a story with us about a problem that one of your portfolio companies encountered and how you helped to correct the problem? We’d love to hear the details and what its lesson was.
I recently invested in an aerospace company that has an amazing product. It is a high altitude airship that deploys telecommunication over 5,000 square miles. Their product is cheap, mobile, and long lasting. The problem was they kept calling it a blimp. This was a major branding problem because when they said blimp the next thing investors and customers thought was Hindenburg and explosion. So, we rebranded to a high altitude airship. It sounds futuristic, steampunk, and cool. They then raised 7 million dollars in funding. I’m not saying the rebranding accounted for all of that but I believe it helped.
Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?
There are a lot of fish in the sea so I don’t feel bad when my fund is not the right fit for a startup. It is better to stick to your investment thesis and make measured changes when you have the data that justifies that change.
Super. 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.
- A single line description of your company. I like seeing that a founder can distil what they are doing down to a one-liner. This lets me know they have a clear understanding of who they are and what they do for whom.
- What is novel and useful about what you’re doing? This is important because there is not really anything new under the sun, we simply combine old technologies and combine them in novel new ways. I want to see if the founders know what they are building and why it is interesting and useful to their customer.
- How does it impact customers? I can’t tell you how many founders I’ve met with low empathy. People that only understand how a product or service will benefit them, they forget about who they are making their product or service for.
- Who else is good at doing what you’re doing? This question came out of my time in the blockchain space. I kept seeing a “me too” product that was not unique and yet the teams kept claiming they were going to reinvent the metaphorical wheel. I believe this is a waste of capital. Founders that have knowledge about their peers is important to the development of their own products and services.
- How does your product or service make the world a better place? I like this one because I want my money to be deployed in companies that have meaning beyond just the generation of more money. I’m a young investor and plan on living on this planet for a long time. I’d like to live in a world where there is more equality, cleaner air, water, and distribution of resources.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
With my fund, Laurence Innovation, we’re making investments in diverse founders that are building a better future and I hope that more investors will follow suit. With my other company, GoodMatch.org, this is a platform that connects communities to local nonprofits that are improving the world. The idea is that if everyone contributed 10% of their resources to causes for good, we can elevate our communities, inspire our people, and improve the global condition.
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? He or she might see this. 🙂
Hands down, Chamath Palihapitiya because I love his mission.
This was really meaningful! Thank you so much for your time.