Human Ventures

Heather Hartnett is a General Partner and CEO of Human Ventures , where she and her team have created one of New York’s premiere startup studios, incubators and early stage venture funds. Prior to founding Human, Heather’s venture capital career spanned across various roles at firms including Lightspeed Venture Partners, CityLight Capital, and Claremont Creek Ventures. Previously, Heather led the development and operations at the David Lynch Foundation, where she worked with some of the country's largest family offices and investment institutions. She's a graduate of the Kauffman Fellowship Program and serves on the board of Transact Global, Trilantic Capital Partners Founder’s Council, AARP’s Innovation Council, and Summit Impact. Heather is active in the community, serving on the leadership board of tech: nyc and Transact Global. She has been listed as one of The 50 Most Influential Women in America by Hearst Digital Media Publications, is a frequent speaker at TechCrunch Disrupt, and is a regular contributor to Forbes, where she covers a range of venture capital topics.?

#FridayFutures Highlight 2: Heather Hartnett, CEO & General Partner - Human Ventures

What was your first-ever investment? What got you started?

During the late 1980s, my father engaged in various types of investing, including commodities. As a result, I was exposed to the world of investing at an early age. When I was quite young, he had me open an eTrade account where I researched stocks and learned by doing. I particularly enjoyed using the paper trading feature of the platform called ThinkorSwim , where I could put large amounts of fake money towards a portfolio to see how well I did. In addition to public investment, I was introduced to venture capital in 2005 while working in the Bay Area. I was fortunate to have a family friend who worked in this area, and it was an incredible opportunity to provide resources to founders to build and innovate. This experience made me realize that private investing was something I wanted to pursue as a career. Now, 20 years later, I am grateful to be doing just that.

Do you remember what your first venture capital investment was, or the first deal you looked at?

We began as a startup studio, also known as a venture-building firm. Our goal was to assist builders in constructing companies, and we raised capital in New York to support this platform. We invested in the firms we were developing, and one of our earliest investments was current.com . Current is a smart banking platform that started with debit card for teens. Before that, I worked at a fund named City Light Capital , and we might have met when I was there with Josh Cohen and Matt Cohen. Invest Forward was a company that we invested in and that I helped develop. It was a crowdfunding platform for impact investing, and it was ahead of its time in both the crowdfunding and impact sectors. However, it provided me with invaluable insight into the realm of early-stage and private investing, as well as impact and mission-driven endeavors.

Can you tell me more about how you got involved with the David Lynch Foundation and how that experience led to the foundation of Human?

During my time working in venture in the Bay Area, I also volunteered with what would become the David Lynch Foundation as a teacher of transcendental meditation. While working with inner city schools in South San Francisco, I saw the significant benefits of meditation for kids with ADHD and other conditions as an alternative to medication. I became involved with organizing a Paul McCartney concert in New York to raise money for the foundation in 2009, which was my first time in the city. I fell in love with New York and stayed, eventually finding my way back into investing. The foundation opened up an incredible network in New York and gave me the opportunity to work with family offices and philanthropists, leading to my involvement in investing.

What role do you play in the wealth space now, and why is it important??

Traditionally, the field of venture capital has been dominated by a subset of men who have served as decision makers. Statistics indicate that around 70% of decision makers in investing come from either Harvard or Stanford, leading to a narrow pool of people who have been investing for a long time. However, the landscape has started to shift over the past five years since the inception of Human, albeit at a slow pace due to the time investments take to show results. It is essential to have different perspectives on the value that these businesses create, given that people with varied experiences and backgrounds perceive value differently. The current scenario presents a significant opportunity for wealth creation by approaching companies with a different lens. An excellent example is Tia Health , a company we invested in early on. At the time, women's health was considered a niche market with limited growth potential. However, understanding the unique challenges faced by women in accessing gynecological care and other health issues led us to invest in Tia Health, which provides comprehensive women's care across many clinics in the country. By having a different lens on what founders should be sought and which categories and areas to invest in, we can identify opportunities that may have been overlooked previously.

What is the most exciting thing you’ve learned that you would want others to know?

I believe that it takes approximately a decade to build a market around a big company, and it is often said that overnight success takes ten years. This is particularly true for emerging markets that are in their nascent stages. In such cases, it may take up to ten years for the exit environment to be right for the company. Thus, it is crucial to identify founders who have the ability to see and build for a world ten years from now. This skill set is unique but exciting, as it involves hearing futurists pitch their ideas and observing founders who see the world ten years from now and are frustrated with the world not being there yet. As someone who can identify such founders, I consider myself a bridge between the present and the future. My father, a serial entrepreneur, always saw ten years ahead, and his legacy has enabled me to recognize those with similar foresight. It is a challenging feat, and I have tremendous respect for those who possess this skill.

At a recent panel discussion about the Founders of the Future, we explored the qualities that leaders of the future should possess, particularly in the next ten years. The qualities we seek in founders today look quite different from those of the last two decades, as technology has become ubiquitous and accessible to people from various backgrounds. To identify the right founders, we seek a combination of confidence and humility, recognizing that things can and will change in unexpected ways. Resilience is also crucial, as tumultuous events like the pandemic, George Floyd's death, and Silicon Valley Bank's crash have shown us in recent years. We evaluate indicators of resilience in the founders' backgrounds and how they have built their careers.

Is there a person or a company that’s inspiring you right now? And why?

There are a multitude of women in the industry who inspire me, and two in particular come to mind. The first is Carolyn Witte , who impresses me with how quickly she can build and scale her business. She has secured large contracts with medical providers and has established physical clinics, all while maintaining a strong focus on product design and customer satisfaction. The second woman is Paige Finn Doherty , a young and up-and-coming venture capitalist who has successfully raised two funds. As an LP in both of her funds, I am delighted to support the next generation of investors, especially those who bring a unique perspective to the industry. It is inspiring to see women like Paige paving the way for future generations.

What advice do you have for someone getting started?

It is a particularly exciting time in the world of venture capital. The landscape has changed significantly in recent years, with greater opportunities for emerging managers to start funds and more capital sources available to help them get off the ground. This is good news for new investors who have a unique vision and a strong network, as they can make a strong case for starting their own fund.

Family offices have also started to participate more and more in venture capital, which has increased the ability for smaller funds to exist in the market. For those who are interested in getting involved in the industry, my advice would be to research the companies that you admire and see who their early investors were. This will give you an idea of where value is being created and what brands are doing well.

Next, try to make yourself useful or valuable to one of those funds. This can be a great way to get your foot in the door, as many teams are small and in need of additional support. Understanding their network and how you can add value is key.

Another way to get involved is through the limited partner side, as this will give you a good understanding of the venture landscape. Investor relations is also an increasingly valuable skill, so understanding the flow of capital and how funds work can be a valuable entry point as well.

In summary, the venture capital industry is changing rapidly, and there are now many different paths to getting involved. Whether you are interested in starting your own fund, working with a small team, or joining a larger firm, there are opportunities available for those who are willing to put in the effort and learn the ropes.

What advice would you give to LPs or other investors looking to invest in an emerging manager and a fund or get started in that way, as they're thinking about the who and the what to prioritize, besides unique lens, point of view, and access points?

There are currently a number of programs available for emerging fund managers that provide excellent resources and networking opportunities. Cool Water Capital and Wintermead are two programs that come to mind, as they act as a sort of Y Combinator for emerging fund managers and curate their cohorts very carefully. For those starting their own LP program within a family office or early endowment, it's worth exploring these programs. Another excellent resource is the Kaufman Fellows, which offers a powerful network and community effect. When you back a manager who has been through the fellowship program, you can tap into this network as well. Overall, these programs can provide a valuable amplifier effect, so it's definitely worth considering them when looking to invest in emerging fund managers.

How can we stay in touch?

I am quite active online, though I don't use Twitter as much as I used to. However, I find LinkedIn to be a powerful resource and encourage you to connect with me there. Additionally, at our company, we have an Entrepreneur and Residents Program called Humans in the Wild. We plan to launch another version of the program next quarter, and we will be putting out a call for founders who are building. We are always excited to meet new founders, so keep this opportunity on your radar.

Have thoughts on this week’s topic or question for me or Heather? Post your thoughts in the comment section. Until next week.??

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