Jesse Draper Of Halogen Ventures Wants To Create More Women Billionaires. Here’s How She’s Doing Just That
We’re halfway through the week, and it’s time for a boost of inspiration to keep us going. Our #WednesdayWisdom Thought Leadership series taps into the minds of industry leaders and disruptive visionaries who are working to build the future of entrepreneurship.
Jesse Draper is the founding partner of Halogen Ventures, an early-stage venture capital fund based in Los Angeles and focused on female-founded consumer technologies. Her portfolio includes a stellar lineup of game-changing, female-founded companies, including theSkimm, Werk (Jesse sits on the startup’s Board of Directors), The Sill and HopSkipDrive.
A fourth-generation venture capitalist, Jesse entered “the family business” after she spent years interviewing hundreds of entrepreneurs and business visionaries on her Emmy-nominated television series, The Valley Girl Show. We caught up with the woman who Marie Claire named one of the 50 most connected in America to discuss the future of consumer behavior, the red flags that keep her from investing in certain startups, and the reason why she bets so heavily on female founders.
You come from a family of venture capitalists, and your portfolio at Halogen Ventures is already stacked with some really promising startup talent. How do you spot a winner—what is it about a startup’s mission and its founders that makes you believe the company can really fix the problem it’s trying to solve?
Halogen invests in seed stage companies, and while we have spotted some winners, you never know. At the earliest stages [of a company], it is all about three things:
- The team is everything. I like to get to know the founders. I like to know that they are thinking 10 years down the road and planning to build a big company—[that they’re] not just in it for the short exit. I like vibrant forces that feel like they will do anything to make the company happen; I want to know that with or without venture capital, they will build this company.
- Traction. I like to see some traction, whether it be $1 million in annual revenue or a potential customer list of 100,000. If you are pre-product, I would love to see some data that shows there is a need in the space. I like to see proof that something is growing excitement.
- A unique and disruptive product that is changing the game in some way. I typically don’t invest if it’s a noisy space and there are too many people doing the same thing. For example, I invested in Flex after seeing six direct to consumer tampon company pitches, and realized [Flex was] creating new technology and a different product with their menstrual cups that was changing the game.
You’ve received tons of pitches from startup founders at this point. What’s one thing you want female founders to know before pitching you?
Know your market size and don’t apologize. Women go after too small a market not even realizing how big it can get. I want billion-dollar industries—figure out how to build that company before pitching me. I want to create more female billionaires, and that is hard to do in $50 million markets.
Stop apologizing for my time and for the product and for the deck not being perfect—I don’t care (I have seen broken clay prototypes).
Own it. Sell me. No apologies.
How do you determine whether a founder is pitching a company that’s ready for venture capital (i.e. is an idea that can scale and exit) versus a company that isn’t going to give you that 100X return? What advice do you have for female founders who need capital, but aren’t sure whether they’re building a company that can be VC-backed?
Look at your company as though it was your body. Your body is made of equity. Giving away a piece of equity is like cutting off your toe. If you don’t have to raise money, don’t, and when you sell the next Instagram, you will own the whole thing. You won’t have to pay back investors or have the weight of that on your shoulders.
Not everyone has the luxury to do that. A good time to raise is when you are growing so fast that you can’t keep up and bringing on a COO or investing in the technology will help you scale.
What are the red flags that keep you from investing in a startup?
Founders who are stuck in their ways and think they are the smartest in the room and can only run the company one way. You should never think you are the smartest person in the room. [And] you are running the company, but that doesn’t mean you shouldn’t be open to other perspectives.
As creator and host of The Valley Girl, you’ve interviewed hundreds of entrepreneurs and business leaders. In your opinion, what is the most important characteristic a founder needs to possess in order to build and scale a successful startup?
You had your second baby boy right as you launched Halogen Ventures. How has your work life changed since becoming a mom? What’s the most unexpected part of being a working mom, specifically a mom working in the fast-paced venture capital industry?
Being a Mom and running any company is a juggle, not a balance. I was in the hospital about to give birth dealing with a fire at one of my companies. As an early stage investor, you need to be available and accessible. You are their first call. Being a working Mom, there are days when I have to run my kid to the doctor between meetings, and I think it’s the most incredible feat I have ever accomplished if I arrive at the meeting on time with my hair brushed and in the right place.
There are days when my nanny cancels, and I have to figure it out. My nanny once cancelled when I was pitching a [female] investor, and [so] she came over to my house. My toddler ran around in the corner while I took her through my PowerPoint deck. I am forever grateful for her flexibility.
That said, I have help. I can afford help. A lot of people can’t, and that is why I think something needs to change. The traditional child care setup in the U.S. is incredibly broken, and the real heroes are the women working three jobs and figuring out how to take care of their children on top of that. Let’s see more entrepreneurs tackling this problem!
Why did you decide to focus on female founders when you started Halogen Ventures?
I grew up in Silicon Valley and am a 4th generation entrepreneur and investor. Growing up, my Mom was my hero as she raised four children, but my Dad always brought me to conferences and board meetings and I never saw any women. I never had a female technology CEO I could look up to, and that was something I wanted to change.
I realized I could help this problem in two ways: (1) with media exposure through ‘The Valley Girl Show’ and now through my podcast ‘Lady Bosses (And Ben)’ that I co-host with Ben Higgins from the Bachelor; and (2) with funding for women [entrepreneurs], which we provide through Halogen Ventures.
At Halogen Ventures, you’re focused on consumer technologies. What is it about consumer behavior in recent years—and in the future—that has you most excited about investing in the space?
I am so excited! Consumer behavior has changed so much! We shop at our houses, not at malls. Traditional advertising no longer works, and [instead] we look to people we aspire to be from celebrity influencers to our friends on social media. [At Halogen Ventures] we look for innovative brands breaking the traditional consumer mold as well as for technologies and services that support the consumer experience. These are all opportunities for innovation.