I recently joined CircleUp after spending the past six and a half years at Uber, scaling the business from operating in a handful of US cities to the ubiquitous global operation it is today. Expanding Uber into new countries around the world required designing and operationalizing highly scalable and repeatable processes, leveraging data to drive decision making, and building a world class team. I had the great pleasure of being part of that growth. Fast-forward to today, Uber now operates all around the world, and the time has come for me to build something from the ground up yet again.
That brings me to CircleUp, and why I am so thrilled to join and lead the creation and expansion of our systematic investment strategy.
While there are hundreds of venture capital funds focused on investing into technology companies, the fundraising options for early- stage consumer companies are limited. Additionally, it is no secret that today the deployment of capital to early-stage founders is anything but evenly distributed. Female founders received just 2% of venture capital funding in 2017. Unconscious bias and human heuristics play a large role in early- stage investment decision making, and systematic investing has the opportunity to level the playing field.
I am deeply passionate about CircleUp’s unwavering mission, to help entrepreneurs thrive by giving them the capital and resources they need, and it’s focus on early-stage consumer brands. I love to wander the aisles of specialty retailers, discovering new products from emerging brands. The focus on providing high quality options and catering products to the most up-to-date nutritional research is something I care about immensely. Empowering these companies to grow and helping make their products available to an increasing number of consumers helps not just the company but the public at large.
As I start working to bring our systematic vision to life, it has became abundantly clear to me that this effort will require a familiar combination of designing and operationalizing highly scalable and repeatable processes, leveraging data to drive decision making, and building a world class team.
Designing Scalable and Repeatable Processes
Over the course of the past decade, quantitative strategies have exploded in popularity as they have provided great returns to investors. When you can buy and sell positions easily on a public stock exchange, the implementation of this type of strategy is relatively straightforward. In the simplest form, your models identify an attractive position, you press a button, and it becomes part of your portfolio.
In private markets, of course, the process of acquiring a stake in a company is considerably more nuanced. Founders have poured their blood, sweat and tears into their companies, and deciding to take (in many cases their first ever) investor capital is a big decision. Engaging companies, performing due diligence, agreeing to deal terms, closing financings and working with our portfolio in an ongoing manner are each distinct, important, and complex processes. I am incredibly excited to build these out in a way that first and foremost meets the needs of the companies, and is also scalable and repeatable.
Data Driven Decision Making
From my stint in VC, I’ve seen early-stage investors rely upon their experience and intuition to arrive at a perspective about a company’s potential for future success. Some investors may heavily consider the profile of a founder, others may have a stronger bias towards teams that have an especially unique approach to a big problem, and some simply “know it when they see it.”
While there are investors and firms that have been wildly successful relying on this human judgement to guide their investment decisions, where I get really excited is thinking about how data science and compiling a large, diversified portfolio can be used to generate strong returns instead. Not only does this approach allow us to scale in a way that human know-how simply cannot, it also gives us the chance to remove considerable structural biases.
At the core of our systematic strategy is Helio, CircleUp’s machine learning platform, which analyzes billions of data points across more than one million brands, providing unparalleled insights into consumer and retail companies, industry patterns, and trends. Helio, a collection of data and models, will drive the creation of our systematic portfolio. In a world where the companies we invest in are selected based upon algorithmically identified signals, rather than an introduction from a friend or a conversation at a tradeshow, we are able to deploy capital based on objective company performance, rather than the strength of a founder’s network or their decision to attend a specific event. To me, that hyper rational, rules-based investment decision making process moves private investing towards a very exciting future, one that I imagine will both foster a more inclusive ecosystem and will deliver strong returns.
Building a World Class Team
I’ve had the great fortune to work with incredible operators and technologists throughout my career – and the team at CircleUp has set a new bar. Beyond their raw intellect and work ethic, the team is made up of high integrity, authentic people who truly love to learn and grow. Executing on our systematic vision requires that we tackle the technical and operational challenges in tandem, and question industry norms from diverse, contrarian perspectives. I could not be more excited to partner with the team we have in place today, and to continue building the team to help bring the systematic vision to life. Did I mention we’re hiring? 🙂