Roseanne Wincek’s career began in the Berkeley chemistry lab working with world renowned scientists as she pursued a PhD in biophysics.  After seeing the way technology was impacting the world around her, she decided to make a change.  Roseanne was introduced to the world of investing during her time at NextBio, a venture-backed analytics company.  Following her time at Stanford business school, Roseanne worked at Canaan Partners before joining IVP in 2015.  Roseanne approaches investing with a sense of curiosity and objectivity that is as authentic as her personality.  On the heels of recent investments in MasterClass and KeepTruckin, we spoke with Roseanne about her professional journey, what makes a great investor, and how she rose to the top of a traditionally male-dominated field.

(Hear the full conversation with Roseanne on iTunes at the GrowthCap Insights page or click the Roseanne Wincek Episode)

RJ: Thanks so much for joining us, Roseanne.  Delighted to chat with you.  Maybe what we could to kick off is to have you share a little bit about your background and both why and how you got into growth investing.

Thank you so much for having me, RJ.  I really appreciate it.  I have an atypical path into growth investing.  I come from a science background and it feels like a random walk, but I’ve ended up in a great place.

To go all the way back, I was a chemistry major as an undergrad and I went to graduate school for biophysics.  After a couple of years, I realized I like thinking about science and talking about science, but I don’t necessarily love doing science.  I felt the work that I did was too specialized.  I saw everything going on around me—I lived in San Francisco at the time, this is 2007 to 2008.  The internet was really coming back.  Facebook was growing and you saw how these products were touching everyone around us.  That made me really excited.  I wanted to work on something that I could see in my everyday life and that would affect the people around me on a daily basis.  That drew me of out the lab and into tech.

I kind of stumbled my way into tech by starting a company.  I mentioned Facebook before, but my company made apps on the Facebook platform.  I then moved to an enterprise software company, a bio informatics and analytics company called NextBio, which Illumina ultimately bought.  An investor in NextBio asked me if I had ever thought about venture capital and frankly I hadn’t.  This was early and there weren’t that many associates back then, not nearly as many as there are today.  I didn’t know any venture capitalists that looked like me.  I started reading everything I could about venture and realized that it was the job for me.

What drew me to venture was the idea that I got to spend time in technology thinking about products that affect the people around me and affect our daily lives, while at the same time being academic about it.  My job is still similar to how things were in graduate school.  I build mental models about the world and do experiments around what I think the outcomes will be or what the underlying trends are.  But instead of pipetting I talk to people.  It’s a much better fit for my personality and it’s a lot more fun.

I ended up going to Stanford for Business School.  I entered the GSB wanting to do venture.  After graduating, I joined Canaan Partners, which is an early-stage venture firm.  It was a phenomenal experience, which I really loved.  I thought, due to my background in both technical and early-stage company roles, that early-stage investing was the right fit for me.

I loved it, but I missed the data and the numbers.  I missed getting to watch companies evolve over time.  I had started a company.  I had been with a company in trying times.  I realized that not everything is always up and to the right.  There are lots of ups and downs.

At the Series A stage, you’re focused on buying 20 percent of a company— which back then was $3 to $5 million dollars—at a time when the company has enough traction that it is interesting but isn’t so far along that you can’t hit your ownership target.  That felt like a constraint to me.  I had seen companies go up and down and I wanted the flexibility to invest when I felt the time was right for me.

IVP approached me almost four years ago and asked if I had ever thought about growth investing.  Candidly, I hadn’t.  I don’t have the typical growth background.  I never did banking and I didn’t grow up through the system.  But the more I thought about it, the more I realized that growth would fulfill the frustrations that I found in early-stage investing.

At the growth stage, I could be more opportunistic.  We could do Series B rounds, we could do C’s, we could do D’s, we do pre-IPO work, we can buy the IPO’s, we can buy the public market.  I love that now I get to invest when I think the time is right, not necessarily when it’s “time” to raise a Series A.

RJ: You talked a little about the flexibility with which IVP invests.  Could you discuss how IVP may be different than other growth funds out there?

At IVP we talk about “hyper growth” and it’s a big area of focus for us.  That’s for two reasons.  For one, those are the most exciting companies.  You realize that when a company hits product-market fit they can grow quickly enough to outpace their competitors.  Being invested in the market leader is so important.

Second, there are a lot of issues that come along with growing quickly, in doubling or tripling your team in a year.  It’s an exciting time for a company, but it’s not without a lot of hard work and a lot of landmines to navigate. That’s where we focus and that’s where we can help companies scale.

We look for companies that are doing more than $10 million in revenue or $10 million of run rate as a crude first pass.  How I think about it personally is, has the company figured out unit economics and product-market fit?  Is there something repeatable in the company that makes sense to pour extra dollars into?

I think we’re the best fit when things are working, you’ve seen a bunch of experiments, and it’s time to step on the gas.  How do you step on the gas effectively, how do you build the team around yourself to navigate that, and how do you ultimately become that “next level” company?  That’s where we focus and where we’re experts.

RJ: Excellent.  Could we talk about some of your recent investments that look really cool, including MasterClass and KeepTruckin?  It would be great to hear more about your experience with those two companies and chat about some of the work IVP has done throughout the investment period.

We invested in KeepTruckin last December.  It’s been such a fun ride. That company is the definition of hyper growth.  They grew from about $1 million to $30 million in ARR last year.  It’s unlike anything that we’ve ever seen.  What’s really impressive about the company is the infrastructure they have built to support that level of growth.

To take a step back, the company sells an electronic logging device (ELD), which is a device that truck drivers install for compliance and reporting purposes.  There was a new mandate coming out and, starting at the end of last year, every truck had to have an ELD installed.  The company recognized the mandate and prepared for it, which I was very impressed by.

KeepTruckin’s ELD starts at $20 and they sell to a non-technical customer that uses the device to both get their job done and avoid being taken off the road.  It’s mission-critical for their customer, but they need to be able to sell and support the device at a very low cost because it’s not a high ASP software product.  The work that they did to provide such “top-level” sales and support and absorb the wave of demand was phenomenal.  I have so much respect for the CEO, Shoaib Makani, and his foresight.  It’s unlike anything I’ve ever seen.0101

The work that we’ve done since we’ve invested is my favorite kind.  We’ve been helping with executive team building and leveling up the company.  We have spent a ton of time helping Shoaib attract phenomenal new hires.  We hired a new general counsel who was the former general counsel of Weebly and Kiva Systems, which is the robotics company Amazon bought.  We hired an SVP of marketing from G-Suite (Google).  We just signed a head of product last night, which was exciting.  That’s a lot of the current day-to-day work that we do and frankly it’s so much fun.

On MasterClass, we invested in March of 2017.  I’ve known David Rogier, the CEO, for a long time and he’s phenomenal.  He’s extremely mission driven, which is such a fun type of CEO to work with.  I knew David when he was starting the company and I remember he told me his idea for creating an online education platform where the best in the world teach their craft.  I thought, “That’s an amazing idea, I have no idea how you’re going to get these people.” But he did.

When I think back to my time as an early-stage investor and my transition to growth, I think about MasterClass a lot.  Alex Gurevich from Javelin, who led the Series A, took a big bet that David was going to be able to: one, create a value proposition for instructors that was compelling enough to get them on the platform and two, have unit economics that could support good growth.  That was a bet that was too risky for me at the time, but really good for Alex.  He made the right bet and he picked the right entrepreneur.

When IVP came around at the Series C, it was clear that MasterClass had successfully created an amazing bench of instructors.  Other instructors were drawn to it, people wanted to be part of the club.  They’ve kept such a high bar on both the quality of instructors and the quality of content. That’s so important and strategic today. There’s so much junk competing for our attention, so much clickbait and crappy stuff out there.  To be differentiated and immersive you need beautiful content.  MasterClass has done a phenomenal job of that.  We got to see through years of execution that the economics of the business really worked. They were at that place that I mentioned before where we felt very confident throwing more money in.

The company is so fun because the product is amazing.  I personally love it.  Gordon Ramsey’s second class just came out and I can’t wait to watch it.  I’m in the middle of Chris Hadfield’s class. He is the Canadian astronaut who is well known for his YouTube videos.  His class prepares you for space travel because he says some of the people watching will one day go to Mars, which is amazing to think about.

We’ve done a lot of team building.  Frankly, that’s the most important thing we can do to help companies at this stage.  Getting the right people in to actually do the work.  It’s not that the teams aren’t great when we invest.  We wouldn’t invest if there wasn’t a great team behind the company, but when you’re going through this incredible growth trajectory the scope of roles change and grow so much that you either need to add in more experienced people or roles need to be split.  Sometimes you need to build functions that the company hasn’t had before.  Getting the right people around the table is what makes all the difference.

RJ: Those are two great examples of high performing companies and entrepreneurs.  What are you focused on today?  What’s most interesting to you and where do you see yourself spending time over the next few years?

There’s going to be some of it that is business as usual.  The venture market has been so strong, it’s tough to be disciplined and that’s because prices are very high and there is a lot of capital in the system.  On the other hand, there are so many Series A and Series B companies that are getting funded and the quality of the companies that we are seeing is the best ever.

That’s due to not only the amount of early-stage capital in the market, but also today’s ease of starting and scaling a company with services like Amazon.  And also the fact that every consumer and worker has a super computer in their pocket.  We are seeing so much market pull and so much underlying infrastructure, that I think we’re in a “golden age” of tech companies.

I’m going to spend my time working with top software and internet companies, but I’m also really excited about the new business models that we’re seeing.  We’re getting to a really exciting point with genomics, for instance.  Illumina is not unlike Amazon Web Services (AWS) in the sense that they are standardizing genetic sequencing.  What are the applications that you can build on top of that?

Machine Learning (ML) and Artificial Intelligence (AI) as segments are also getting to a point where we’re seeing phenomenal opportunities emerge.  These business models are going to be different.  They’re not going to be software companies that just sell to their customers.  They’re going to be their own customer and go to market in a different way.

As growth investors we have to be creative in how we think about these opportunities.  Both in valuing them the right way and also in helping set them up for success.  We’re already seeing this in a lot of vertically integrated companies.  For example, Uber doesn’t sell to taxi companies, they operate the service themselves.  Compass doesn’t sell to real estate brokerages, they are the brokerage and they have the agents.  I think we’re going to see more and more of that trend, especially driven by ML and AI.

RJ: You’ve had an interesting path, including time as an earlier stage investor, so I would be interested in your take on this question.  What do you think makes a great growth investor?

That’s a great question.  I feel very lucky that I’ve been an early-stage investor because I’ve seen how raw companies can be.  I remember when I first got to IVP, every company looked amazing, every CEO looked amazing.  I was used to seeing Series A CEOs.  Only the top 10% to 15% make it to the Series C stage.  However, just because they get there doesn’t mean they’re one of the best Series C CEOs.

I’m lucky that I have seen such breadth in company stage.  It reminds me to keep a beginner’s mind and a sense of curiosity when approaching an opportunity.  It’s so important, even at the growth stage, to think about what could be.  In venture investing, the risk/reward is so asymmetric.  The risk is that you lose your capital.  The reward is that you have a 10x or 100x return.  Where we get it wrong in growth investing is on the upside.  We cap what we think “could be.”

Uber talks about having a hard time fundraising in the very early days.  I don’t think anyone thought back then it could be a $60 billion company.  I wish more growth investors could sit next to early-stage investors and see how they get excited about what could be.  We need to do a better job of keeping that curiosity and beginner’s mind, while at the same time staying very disciplined.

At the growth stage, prices are high and we’re investing at high valuations. At the early stage you make money from picking.  At the growth stage you make money from pricing.  You need to make sure that you are excited about what could be, while not baking it so much into your price that you take away your return.  It’s hard to be a growth investor.  You have to pull both strings constantly.  On one side being very, very optimistic and on the other side being very disciplined.  You have to realize that the pressure of investing at the growth stage is that sometimes there are great companies that do not make great investments.

RJ: Let’s close out with a question we chatted through in our last conversation. I found it to be very enlightening and I ask it somewhat selfishly because I have two daughters.  Could you share with us how you were able to climb the ladder and get into the VC world?  And not only the VC world, but also how you became an accomplished person in business?

We talked about how to succeed as a woman in a male-dominated field.  I think about two buckets of my life.  One, I went to a phenomenal all-girls school.  I was talking with somebody about this last night.  I remember reading about Barbara McClintock and Rosalind Franklin and all of these female scientists that were treated really horribly and thinking, “That’s so terrible.  I’m so glad that doesn’t happen anymore.”  I grew up in a bubble.  I was told that I could do anything and I think that was to my benefit.  My dad was always telling me that I could do anything that I wanted to do.  It was ad nauseam and I asked, “Dad, why do you keep saying this? I know.”  He told me it because he knew that I would get into the real world and people would tell me otherwise.  I feel really lucky that as a young person I had it jammed into my brain that I could do whatever I wanted and that being a woman didn’t matter.

I’ve also been really lucky in my career.  I didn’t seek this out, but when I was in science I worked with phenomenal women.  I worked for Judith Klinman, who is a National Medal of Science winner and the first physical science hire at Berkeley.  I also worked Susan Marqusee.  Then I moved to venture and I happened to work with Maha Ibrahim, who’s been at Canaan Partners for 18 or 19 years.  Even today, I’m so lucky because I have so many advocates.  Inside IVP, my partner Jules Maltz, for instance, has been such a phenomenal mentor and advocate for me.

One thing you don’t realize is that, as a minority group, a lot of times you don’t get as much of a voice as everyone else.  When those who are in the majority recognize that and help lend their voice, it’s hugely beneficial.   As a father, tell your daughters they can do anything, even if they tell you to stop and roll their eyes.  In work, helping people that don’t have the visibility that you do and lending some of your visibility to them helps so much.

RJ: That’s a great note to end on and I’ll definitely heed that advice. That about, wraps it up.  We really appreciate the time today.  We covered a lot of ground.  Thanks again, Roseanne.

Thanks so much for having me, RJ.

Hear the full conversation with Roseanne on iTunes at the GrowthCap Insights page.