Wednesday Wisdom from Adam Quinton, Founder & CEO of Lucas Point Ventures
We’re halfway through the week, and it’s time for a boost of inspiration to keep us going. Our #WednesdayWisdom blog series taps into the minds of industry leaders and disruptive visionaries who are working to build the future of entrepreneurship.
We sat down with Adam Quinton, Founder & CEO of Lucas Point Ventures, to discuss the challenges of diversity in the VC space, the characteristics he looks for from a startup before investing and more.
You’re a champion for diversity in tech, specifically as it relates to women. Tell us why you’re passionate about that.
Tech is vitally important to the health of the economy, it represents the growth industries of the future. Yet it is surely missing something, to the detriment all of us, by not fully capturing the talents and expertise of a very diverse population. So there is a “business case” for diversity at a high level, and also one at the level of individual investors too. Because if their minds are closed to opportunities from folks they are less familiar, that don’t look like them, they will lose out. In addition to that, and more importantly in some ways, there is clearly an issue of fairness, or rather lack of, here. When it comes to the people side of the business across many dimensions (gender, race, age and more) tech, which should be a progressive agent for equality and fairness, comes up short all too often. Anyone who believes either or both of those things can decide if they want to be part of the solution … as opposed to part of the problem.
Your portfolio is quite diverse. How do you determine which investments you’d like as additions to your portfolio?
My goal is financial return. Early stage investing is especially uncertain and there is no easy route to deciding which company to invest in. At a high level, I have three screens:
- Can “it” be big? (Does the venture seem to address a really large market opportunity, does it have a compelling solution to a real pain point in that market and does the timing seem right for success?)
- Does “it” have the right team? (Do the founders, in particular, have the right characteristics, experience, expertise, commitment, integrity, etc., to make the venture a success? And where they have gaps on the team, do they have awareness and clarity as to how to fill them?)
- Does “it” have compelling traction? ( Is there evidence, commensurate with the stage of the business, that there really is a solution that the market wants and the team is executing on their visions?)
Aside from return, how do you judge your success as an investor?
I don’t have any other metric. These are financial investments to generate (I hope) above average returns. Simple as that.
Women accounted for only 6% of venture-firm partners in 2013, a decline from 10% in 1999 and at the end of 2016, the number of women working as investors within venture firms increased 2.5 percent over last year. Why do you believe there are still challenges in this area?
VC is a very insular and self-referential business in many ways. Its make is very homogenous (mostly white and Asian guys) as such whether it’s potential partners or investees as so often can happen “like likes like” plays out. Or put more bluntly, VC is a mirrorocracy not a meritocracy … while it claims to objectively select the best people from wherever they may come from, in reality, it really likes what it sees in the mirror and acts accordingly.
The tech industry continues to struggle when it comes to diversity. What role do you feel investors should play when it comes to moving the needle of change?
The Googles and Facebooks of tomorrow are the tiny start-ups of today. Investors have an utterly vital role in driving tech diversity because unless they fund diverse founding teams then the current status quo is locked in place for YEARS – especially at the leadership level from which company culture comes. A depressing data point from the Babson Athena research… over a three year period, only 3% of VC back companies had women CEOs that needs to change and only investors can make that happen.
What’s one piece of advice you’d give to early entrepreneurs?
“Take advice but never follow the advice”: Suck all the insights and advice from all the smart people you can to help you make better-informed decisions, but never blindly follow anyone whatever their reputation or experience. Only you know what is truly best for you and your business and you need to make and OWN decision accordingly.
For an extra dose of #WednesdayWisdom, read our interview with Alexandra Wilkis Wilson, Co-Founder & CEO at Fitz, to discuss this latest startup venture of hers, the future vision for her third business, and tips for early stage entrepreneurship.