Renegade Partners Deploys Highly Anticipated $ 100 Million First Fund – TechCrunch
Renegade Partners – a Bay Area-based venture capital firm co-founded by VC veterans Renata Quintini and Roseanne Wincek – unveils first $ 100 million venture capital fund that captures the imagination of the business press almost since its conception at the end of 2019.
The effort is interesting for a number of reasons, not least given the track records of Quintini and Wincek, both of whom left powerful venture capital firms to join forces. Quintini, a lawyer by training, was an investment manager at the Stanford University Foundation before being hired by Felicis Ventures, after which she was poached by Lux Capital. In these companies, she worked closely with a number of top-flight startups, including self-driving company Cruise, satellite startup Planet, and clothing company Bonobos.
Meanwhile, Wincek was once determined to earn a doctorate at UC Berkeley, instead leaving the school with a master’s degree in biophysics to travel to Stanford for his MBA. From there she moved to Canaan as a director, and from there she moved on to IVP, where she rose through the upper ranks to become a partner, investing in businesses and consumer ventures such as Glossier, Compass , MasterClass and TransferWise.
This is not a new trend, successful VCs who happen to be women leaving established companies to create their own outfits. Think of Bond’s Mary Meeker, Construct Capital’s Dayna Grayson, and Westlake Village BioPartners’ Beth Seidenberg, to name a few. But unlike some of its predecessors, Renegade is not limited to playing a certain role in the corporate world. It is not linked to any sector. It does not market itself as a early stage venture capital firm. What he’s looking for is a pretty specific mix of traction, team, and market – a combination he finds in companies that are anywhere between their Series A and Series stage. vs.
A chief data scientist at insurance giant John Hancock is helping significantly, the co-founders say. The same goes for a human resources manager with a powerful CV (Uber, Zoom, Milo); Director Chloe Breider, a former IVP investor who worked closely with Wincek; and, as Renegade’s “decision scientist”, former professional poker player and bestselling author Annie Duke.
We chatted with Quintini and Wincek earlier today to learn more about what they’ve put together and how Renegade stands out in an industry that has never been so competitive. The clips from this chat, below, have been edited slightly for length.
TC: People would probably hire someone to get a job at one of the companies where you worked. What prompted you to leave and who reached out to whom when it came time to partner?
RW: We first met when I was Canaan and Renata was in Felicis, and at the time there weren’t a lot of women on the adventure, so [women VCs were like] âOh, there’s a new one, ‘Come meet everyone.’â Over the years we’ve looked at a lot together, and especially after my time at IVP, I’ve always bugged Renata about. of what was in his portfolio.
A few years ago we were at one of those big boozy dinners with a group of our age in a corporate group. We were all chatting like, âOh, if I had my own business, I would do this and I would do that,â and Renata and I would finish each other’s sentences. And I remember walking up to her and saying, “We should be having this conversation for real, but maybe with less wine.” And it was Memorial Day of 2019. â
TC: Institutional investors sometimes worry about the good understanding of a team of emerging managers when they come from different places. How did you approach this?
RQ: We were good friends, I thought Roseanne was a phenomenal investor, but frankly we didn’t know if we would be good co-founders and that’s the biggest risk, right? We asked: how to reduce this risk? And we actually hired a coach for what we jokingly call marriage counseling. But we’ve done a lot of work on how we deal with stress, what success looks like and what our values ââare. We also had a parcel time spent in hotel rooms, and I can tell you Roseanne is more early morning than I am.
TC: You were raising this in the midst of the pandemic. How did this impact fundraising?
RQ: We had our first close on Friday March 13, the weekend before COVID [started shutting everything down]. The Grand Princess Cruise was coming into the bay, and we were on the phone with the LPs, and we didn’t know if people were going to pass. I think if we didn’t have our background to draw on, [the fund] would not have happened. We were very lucky to be supported by institutional LPs – an Ivy League school, endowments, foundations, family offices. But we didn’t take COVID into account.
TC: I see language on the âsupercritical stepâ on the Renegade site. What does it mean?
RW: This sentence is intentionally vague, because we think that stage definitions don’t make so much sense anymore. I started my career as a chemist a long time ago, and supercritical fluid is the state of matter that is neither liquid nor gaseous but both, and we believe that companies can be the same. There’s a product to market, there’s data, there’s early customer love and usually a big team, but these aren’t the big growth companies yet, are they? They are not ready to raise a tall tower of growth and add fuel to the fire, and this is how we think of [our ideal targets].
Our sweet spot is [a startup with] anticipated income – from a quarter of a million dollars per year to one million dollars per month – [that have] from 20 to 100 employees [and which are] rounds of funding of between $ 10 million and $ 50 million. Our first transaction was actually a Series C transaction, but we also have Series A and Series B companies in the portfolio, all of which are in that sandbox.
RQ: There is so much capital today that capital is cheap. But execution is expensive, so our focus is on preparing startups to execute as big giant companies. It’s: how do I think about the organization as it evolves? How do I think about the exact team I need? How do I think about my options pool? What about the conception of my role as founder? How do you manage your capital and leverage your board of directors? Things work so well for some founders that the wheels fall off the bus; in the meantime, many are pondering these same questions [that they never had time to sort out].
TC: If you are not focused on the sector or the stage, how do you reduce what you are looking to fund?
RQ: A good thing about [the types of startups weâre backing] it’s that they’ve been funded by someone else before, so it’s a known universe, if you think about it from a data science perspective.
Beyond that, it is by applying the heuristic that Roseanne, myself, ChloÃ©, Susan [Alban, Renageâs chief people officer], have invested and worked in aberrant companies for over a decade. It’s not just a number. It is the quality of income. It’s a combination of other breadcrumbs that companies come up with to find out who they’ve hired and what customers think of their product, and is this company building a recording system and how fast is it? adoption. Technology alone cannot do [the work].
TC: There is so much money going around right now. Regarding the advice you give to the companies in your portfolio, what do you tell them about how to react when someone knocks on the door and offers more funding right after a round is closed?
RQ: There are so many dimensions here. First of all, you need to examine it from the needs of your business. You have to deploy that capital, and you have to provide a return on that capital, and nothing is free, so the more money you collect the higher the valuation you receive, it catches up with you in the next round because you have to erase this watermark.
[We also tell them to ask themselves] do you have any investments to make? Do you have a team to hire? Some founders we spoke with said, âI’m not going to scale up anymore because I can’t go faster or deploy more than my model already supports. I will actually run more and then take more [capital] down the road when I’m going to get more credit for the things I’ve built, and the ROI is going to be better.
The other part, too, is that when you’re in a very competitive environment, you have to look at what’s going on around you. Sometimes if your competition is increasing and pushing the market forward, it might be a reason to think [about raising more than youâd planned] because maybe they can hire you or they can spend you more in some areas and can generate more traction. So you can’t look at it in absolute terms. At the same time, there is no free money and many founders unintentionally create more problems for themselves. [by not thinking through what that next check means].
TC: People see a business team led by women and wonder how much you will focus on startups led by women.
RQ: I think we are big investors who happen to be women. Our main goal is the diversity of experiences and thoughts. Gender is only one of the goals, and diversity is one of the core values ââof the organization because we believe it delivers better returns.
RW: One thing that’s been really fun, validated, and inspiring about it all is the people coming out of the woods who are so excited. [about Renegade], because representation matters. Ultimately, that’s how it changes. We nibble this and soon, you will not ask this question again because it will no longer be relevant. That’s the point.
TC: Do you think diversity matters for LPs? Do you think diversity is going to be codified in the way LPs plan to invest in funds?
RQ: Some lead with it. Others say, âLet me look at past returns. They look at lagging indicators. Today, the founders choose investors who reflect their values, with whom they are proud to be associated – people who have the same energy and who fight for them and with them. These are the returns of the future, no matter what Cambridge tells you today about the investments that have been made in the past. The greatest LPs know it.