Leadership at M13
Leadership -- and lack thereof -- is most evident in crisis. The last nine months have been a time of accelerated progress for some and also deep personal, economic and societal struggles for many. Our health and safety rely on leadership at local, state and federal levels, and the lack of coordinated strategies will affect our lives and communities for the unforeseeable future.
Short-term leadership happens when everyone is watching; enduring leadership is the work that happens when no one is watching.
I led brand and comms at Virgin Group in a time of tremendous growth in North America, and it was in those years that I saw leadership in action. As Virgin’s chief spokesperson, Richard Branson didn’t just get the glory: he publicly took it on the chin for -- and fought back against -- both real and perceived setbacks. What the public does not see are the countless times Richard lends a hand to lift spirits, says thanks to first responders or shows up simply to listen.
M13 is a venture engine built by founders for founders, so our community is one of leaders. Our firm’s purposefully designed systems help our portfolio companies grow, and that infrastructure was just starting to rev when I joined a year ago on September 11, 2019 as M13’s first female partner. A month later, we announced the close of our $190M early stage consumer tech fund, and I commuted biweekly to our Los Angeles headquarters to get to know my colleagues, our companies and our brand values. We did deep dives with our founding teams and identified meaningful projects to enable better execution. We mentored aspiring entrepreneurs in a maximum security prison with Defy Ventures; the proximity to people who on the surface seemed different yet had more in common with us than not reinforced M13’s unconscious bias training that had begun the year before. We hired our newest partner, Lizzie Francis, to lead Launchpad and operations, and three additional staff including our Director of Community.
As early as we are in our journey as a firm, M13 is laying the foundation for a durable franchise. That starts by building an infrastructure and team. Every decision we make determines the quality of our community which affects our investment decisions and execution-focused services for founders and their company’s trajectory. One year in, I can now describe leadership at M13, what we are most proud of and areas we are working on that will be points of pride in the future.
Our work with founding teams is about holistic leadership, which starts with mental wellness. What has that got to do with venture? Everything.
It takes more than money and product intelligence to accelerate growth while creating value for consumers.
Early stage founders -- even the ones who have launched multiple startups -- are building with limited staff, resources, and other constraints. As Partner Gautam Gupta says, “When you’re a founder, every day you’re doing something that you’re not an expert in.” Being a founder takes an emotional toll, and it can be perversely easier to bury yourself in volumes of work than to unpack, accept, and address the real roadblocks -- and to ask for help.
Community and connection contribute to wellbeing, so earlier this year when we had to social distance to protect our collective health, my partners and I worked harder to listen, learn, and build the trust it takes to ask for help.
Trust is the foundation for our collaborative work across our partnership and with our founding teams. We reached out to our portfolio companies and offered strategic planning sessions and office hours, and as a partnership we shared what we learned and asked each other for help. We host monthly M13 founder-only gatherings which have been a source of catharsis, support and idea exchange to people who are only just getting to know each other. Thanks to our portfolio company Bunch, we are offering a special M13 subscription for our founding teams to integrate efficient, actionable and nonjudgmental management lessons into their day. Our Propulsion model is already demonstrating impact but we are most proud of being there for our founders as a trusted sounding board.
Our founding teams lead with empathy. Led by Latif Peracha, our investment focus is future consumer tech in sectors like health, food, personal finance, home and connection. Our approach to holistic leadership is echoed in what and how our founding teams are building in these categories. Accelerated consumer behavior shifts during COVID resulted in unprecedented growth for those with products and services that keep consumers healthy, balanced and productive. At the same time, our companies found ways to support healthcare and essential workers, facilitate COVID research and encourage wellness and resource sharing across their communities. Even at this early stage, they are putting in the work to grow as trusted and beloved brands of the future.
And so do we. Founders in seed to series A stage companies have minimal resources and face inevitable gaps and blind spots. We have been in their shoes and know the quantitative and intrinsic value of being a helpful and reliable partner. Recently one of our founders told investors that they were moving across the country to expand into new markets, and only one investor met them in person for a send off: it was an M13 partner. We took a similar approach with our staff, supporting them as they endured personal struggles during a hard spring and summer, fostering connections for not only our new hires but everyone, and creating frequent moments of digital magic. These are tough times, and we are doing everything we can to help each other endure and thrive.
Human capital is hard to scale, and we strive to make tech work harder for us. Tech can be dehumanizing but at M13 we are building tech tools to enable us to spend our most precious resource, our time, on lending a helping -- and human -- hand. Our key resource, Propulsion, enables founders to leverage our human capital -- vertical domain expertise and a community of supportive and world class entrepreneurs, investors, service providers and partners. We are working hard to prove our model of high touch support while also architecting tech tools that scale our human expertise and proactively anticipate our companies’ launch and community building needs. Two of our tech tools debuted this summer. If you’re launching in a market, our proprietary N.I.C.O. data system leverages 2M pieces of contextualized data across our 75K contacts to identify relevant influencers and micro communities who want your product and service. Our Propulsion Platform, currently in beta, engages our community with meaningful thought leadership and tactical plans for every stage of the founder journey; we are improving based on early feedback and also finishing our search for a team member to lead content strategy.
Our culture matters, and it’s helping M13 attract and retain top quality talent. A community starts with a culture that radiates an aspirational purpose and brand values. The ripple effects of COVID reinforced that M13 was ahead of the curve with our purposefully designed venture engine that puts founding teams at the center. In 2019, Partner Matt Hoffman predicted that top talent will be most attracted to companies with a compelling culture and purpose. That’s being validated in real time based on the volume and quality of outstanding candidates for M13’s open roles. COVID and WFH tested our culture: we have always been a distributed workforce in San Francisco, Los Angeles and NYC but would we survive our personal struggles, lean on team bonds and keep productivity up to match our outsized ambitions? In late April, our talent team shared the results of our annual employee engagement survey that measures employee motivation, enthusiasm and connection. Compared with tech companies of our size (<200), M13 performed seven points higher than the average 2019 engagement score; most importantly we beat our previous year score by ten points. M13 scored highest on confidence in our future and company pride, and we have received great feedback on our leadership practices. Just as our venture engine is designed to help founding teams endure downturns, our culture fosters high engagement and resilience among our team. Said one teammate, “We all care for one another in a way that I have never experienced at any other company.”
We can and will do more to diversify our networks of entrepreneurs and venture partners. Human capital determines our success, and we consciously make everything at M13 work harder for us -- so we must do more across all functions to foster diversity.
We leave opportunities and money on the table when we don’t access people traditionally overlooked by venture.
In early 2019, a Propulsion associate offered to organize unconscious bias training, and we jumped at the chance to stimulate honest dialogue and efforts across the firm to broaden our professional networks; since then unconscious bias workshops have been a regular part of employee programming and offered to every partner and associate. We learned that unconscious bias workshops aren’t effective without institutional systems and practices which we are adopting to ensure a more diverse pipeline of talent in our recruitment and investment efforts. Latif and Co-Founder Carter Reum recently volunteered in a mentorship program called the Blueprint Project, and we are testing ways to track intros, meetings and deals with traditionally underrepresented entrepreneurs. The brand team is spending 50% of our vendor budget on underrepresented groups. Among fund II companies, 32% have one or more female co-founders, and 27% have one or more co-founders from an underrepresented group (1). We have a long way to go and a lot more to learn from and adopt and try. If you have opportunities from diverse pools of founders that you’d like to partner on, we’d like to hear from you: please connect with us at firstname.lastname@example.org.
We are keeping ourselves accountable with transparency and systematized processes to build enduring sustainable companies. Sustainability was defined by the UN as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” We are committed to long term outperformance and have begun to wrap policy and metrics around our environmental, social and governance practices essential for a durable franchise. We are also opening up the conversation: we hosted an ESG event featuring former Nature Conservancy President & CEO Mark Tercek and others. Hearing from practitioners about big ideas and systemic change drive value across our ecosystem, and we will continue to share our progress and learnings.
We gave ourselves permission to experiment and reimagine the status quo and enlisted the help of our community. Like others, we have yet to truly comprehend the effects of this traumatic year. Instead we poured our energy into picking ourselves up and convening the bright talent represented across our community of entrepreneurs and investors. 2020 began with a diversity, equity and inclusion event co-hosted by ThinkHuman and plans for additional monthly in person gatherings. Like everyone else, in March we had to rethink everything. As a company planning out our first year of programming and having to cancel most of it, we decided that we were constrained only by our imaginations and on March 9 tried something we’d never done before: digital events. Our first virtual event was a candid conversation on preparing an office for remote work; it was relatable, collaborative, on time and well received. Since then, we have hosted more than 30 digital events and flexed our ability to convene M13’s super star community from Katie Couric and Deepak Chopra to Riot Games and Snap; Impossible Foods, Thrive Market and Daily Harvest; Capsule, Seed and Feelmore Labs; NPR and LinkedIn and executive coaches, sports coaches and men's support groups. We learned a ton about what people want and need, and we also have relevant content to reach even more people with these insights. Our experimentation with digital events continues as all of us strive to get better at virtually connecting and nourishing our minds.
Two bricklayers were asked what they are doing. One of them said they make bricks, and the other said they are building a cathedral. As former founders and operators with decades of experience building companies, all of us joined M13 for the hard work as much as for the long term vision. Managing Partner Karl Alomar recently said, “We’re not by any means a backseat investor.” Nothing we do at M13 hasn’t been done before -- so what does it mean to lead in venture today? For M13, it means bringing together purposeful teammates, exercising the humility to address our areas of improvement, nurturing a collaborative community, methodically building systems and processes, and applying pattern recognition, ingenuity and empathy to ensure that our founders thrive.
I have seen our community come together in service of our founders during the toughest of times. These crises are far from over, and we will continue to lean on each other and help each other move forward. We have the team in place to build something extraordinary that, with each year, will look less like bricks and more like the cathedral of our dreams.
Thank you for joining us on this journey. We could not do it without our community.
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(1): Underrepresented group refers to the percentage of companies with 1 or more co-founders who are not white, East Asian or South Asian. According to RateMyInvestor and Diversity VC’s latest industry report, 9% of VC co-founders were women, 2.4% were Middle Eastern, 1.9% were Latinx and 1% were black