William Stringer of Chisos Capital: “It’s hard to address an issue you don’t measure”

Investment firms would be well-advised to hire a diverse leadership team, particularly on the investment committee. Not only does this help reduce bias in the investment process, but it also signals to female founders that the firm respects and appreciates women in business. As a part of our series about “5 Things We Need To […]

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Investment firms would be well-advised to hire a diverse leadership team, particularly on the investment committee. Not only does this help reduce bias in the investment process, but it also signals to female founders that the firm respects and appreciates women in business.

As a part of our series about “5 Things We Need To Do To Close The VC Gender Gap”, I had the pleasure of interviewing Will Stringer.

Will Stringer is the Co-Founder and CEO of Chisos, an early-stage alternative investment company utilizing a convertible income share agreement to invest at the earliest stages of business ideation and formation.

Will is responsible for creation of the Convertible Income Share Agreement, development of the underwriting and diligence criteria, fundraising, financial planning and general operations of the company.

He is currently an angel investor and advisor to Arcus Partners, a digital document management software solution. Previously, Will served as an advisor to a global payments company working to digitize gold and bring transparency to the gold supply chain.

Will began his career in investment banking as an Analyst in the Energy Investment Banking Group of Bank of America Merrill Lynch. Prior to starting Chisos, Will worked for a Texas-based firm Cockrell Interest and managed all phases of illiquid investment execution including sourcing, diligence and ongoing portfolio management.

Will graduated with high honors from The University of Texas at Austin with a B.B.A. in Finance and Business Honors. He currently resides in the Los Angeles area.

Thank you so much for joining us! Can you tell us the “backstory” that brought you to this career path?

I started my career as an investment banking analyst, moved over to the buy-side at a single family office where I worked directly under the CEO for 4 years and then spent a year working as a product manager at an early stage fintech startup. After my role at the fintech company, I found myself thinking about what comes next. I have always had the entrepreneurial bug, and it seemed like the perfect time to take a risk and try building a company.

As I began looking to get funding for my own company, I realized how limited the options truly were. That experience sparked the idea for Chisos and our unique approach to early stage funding.

The backstory of Chisos is really a combination of investment knowledge and experience combined with the passion and intrigue of early stage technology and business creation. To me, founders building the future through early-stage companies is the most exciting place to be right now.

Can you share a story of your most successful Angel or VC investment? In your opinion, what was its main lesson?

My most successful investments to date have all been in the digital asset / crypto space. I fell down the “crypto rabbit hole” in 2016 and quickly realized the magnitude of the coming asset digitization enabled by blockchain and other decentralized ledger technology. Similar to the early days of the internet, there was (and still is) so much opportunity for disruption. My main takeaway from the last 5 years is that most people are slow to change or adopt new technology. If you can identify the big shifts, it matters less what specific bets you make and more about how much capital can be deployed in “reasonable” opportunities.

We keep these large trends in mind while deploying capital through Chisos. We’re making multiple small bets in areas we believe will experience growth over the coming decades.

Can you share a story of an Angel or VC funding “failure” of yours? Is there a lesson or take away that you took out of that that our readers can learn from?

A valuable lesson I learned early on was to monitor cash burn in relation to fundable milestones. For venture path growth firms, there are predictable metrics that will allow you to raise your next round of capital. Understanding those milestones and understanding the cash burn required to get there is (obviously) critical to not running out of cash. We made an investment at the family office where we failed to properly monitor cash burn and milestones. The founder did not have the milestones clearly laid out, and the end result was running out of cash.

Was there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that?

We had a chance to invest relatively early in Unity, the now-public gaming engine company. The opportunity did not fit our investment thesis at the time, so it wasn’t a decision based on judgement or merits of the company, but it always stings to run the “what-if” scenarios.

Ok let’s jump to the main focus of our interview. According to this article in Fortune, only 2.2% of VC dollars went to women in 2018. Can you share with our readers what your firm is doing to help close the VC gender gap?

We’re taking a multi-pronged approach to helping close the gender gap in VC:

  • We’re partnering with experts in diversity and inclusion to ensure we’re implementing proven best practices. Earlier this year, we completed the Diversity in VC certification; we’re in the 2nd US cohort to be certified.
  • Our online application process is open to all founders via a form on our site. You don’t need connections to apply, and no one’s going to tell you to smile in your interview.
  • We have a diverse investment committee and advisory board. This helps to counteract gender bias during the application process, and ensure that female founders in our portfolio feel supported post-funding.
  • Lastly, we’re actively looking at self-reported demographic data of our applicants and portfolio founders. We use this data to make sure we’re effectively reaching female founders.

Can you recommend 5 things that need to be done on a broader societal level to close the VC gender gap. Please share a story or example for each.

The VC gender gap is rooted in well-documented gender discrimination and gender bias in professional settings. More than 40% of women report experiencing gender bias at work. We’re not going to be able to close the gender gap in VC funding without addressing those deeper issues that are contributing to gender discrimination and bias in the workplace.

That said, there are a few things that can be done today to close the gender VC gap:

  • It’s hard to address an issue you don’t measure. We recommend that VCs look into the demographics of their applicants and portfolio. As mentioned above, we’re analyzing self-reported demographic data to make sure that Chisos attracts a diverse applicant pool.
  • Investment firms would be well-advised to hire a diverse leadership team, particularly on the investment committee. Not only does this help reduce bias in the investment process, but it also signals to female founders that the firm respects and appreciates women in business.
  • Female entrepreneurs seeking funding should consider investment firms and grant programs that thematically invest in female and underrepresented founders, like Chisos, ad-Astra Ventures, Zebras Unite, iFundWomen, and the Girlboss Grant.
  • Continue developing alternative funding approaches that don’t operate on the tired VC “grow-at-all-costs” playbook. These types of approaches tend to be more flexible and more inclusive. Our proprietary CISA approach is one example, but there are plenty of others.
  • Advocates for increased funding to female entrepreneurs should make the business case. A study by the Kauffman Foundation revealed that private tech companies led by women achieved 35% higher ROI than their male counterparts. [Source: https://www.forbes.com/sites/allysonkapin/2019/01/28/10-stats-that-build-the-case-for-investing-in-women-led-startups/?sh=26cd25dc59d5]

You are a person of great 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. 🙂

The movement would be 1) celebrating entrepreneurs and the incredible risks they take to literally invent the future, and 2) enabling those entrepreneurs with better access to capital.

There is so much opportunity for improvement around the world. The most valuable resource today is courage to tackle those big problems. There are some amazing organizations like Right to Start, founded by Victor Hwang (https://www.righttostart.org/), that are making this movement a reality.

Chisos is working to build the first-check investment platform, where any entrepreneur in the world can raise a small amount of capital based on their “future earning potential.”

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Don’t be afraid to try something. It never hurts as bad as you think to fail. You seldom regret what you do. You regret what you didn’t do. Don’t try to be invulnerable. Don’t worry too much about security. If you build a wall around yourself, you become a prisoner of that wall. Take a chance!”

Register & Tribune Syndicate (February, 1982)

Living a life to minimize regret has been my action framework for over a decade now. At the end of life, nothing REALLY matters outside of your own perception of the life you lived. Even that perception only matters to yourself. Why not take risks and strive for goals that you want?

Yes, responsibilities and other obligations will serve as obstacles. Those obstacles may contribute to failure and that’s OK. The true tragedy is not trying — that’s what haunts people on their deathbed. In 20 years, what will you regret?

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, especially if we tag them. 🙂

Simply because of recency bias (I just finished The Startup Community Way) — Brad Feld. Brad, along with Steve Case & Mark Cuban, in my mind, are well known for increasing access and inclusivity in the startup world. I think they would both appreciate what Chisos is looking to accomplish in the world.

Thank you so much for this. This was very inspirational, and we wish you only continued success!

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