Venture capital firms are doomed if they don't invest in young talent

It's one thing to have a seat at the table. It's quite another for people to actually listen to you when you get there. Nicole Quinn, an investor at Lightspeed Venture Partners, tells me she was lucky to find a career where she has both.

A recent graduate from Stanford Business School, 31-year-old Quinn joined Lightspeed part time as an associate partner when she was still working toward her degree. As Lightspeed looks to build out its consumer investing business, her past experiences as a retail specialist at Morgan Stanley proved invaluable.

Today, the firm announced that Quinn will become the firm’s first female partner on the investing team.

"I am really excited to be at a firm where younger people have a voice," she said. "At other firms, younger people are just around to help source deals, but in the partner meetings at Lightspeed, diversity of opinion around the table is important."

Investing in diverse voices is not just talk at Lightspeed. The firm's portfolio includes female-founded and led startups such as Honest Company, Stitch Fix, TaskRabbit and StyleSeat. With women making more than 80% of the consumer spending decisions across American households, Lightspeed is committed to investing in startups led by female decision makers. Originally from England, Quinn says Lightspeed's partnership is one of the more diverse firms in the valley when you look across race, age and experience of the investing partners.

In advance of the news coming out about her promotion, we discussed the investing trends she is most focused on right now, the areas she feels are overhyped and how she tries to invest with a global perspective in mind.

Edited excerpts:

CF: How could more venture capital firms create the inclusive investing environment you described at Lightspeed?

NQ: The main factor is that the managing partners have to really believe in having diverse opinions. Jeremy [Liew, a managing director at Lightspeed] is very much a person who believes that you are only as good as your last investment and you can’t rely on your past history for credibility. There are some venture capital firms on Sand Hill Road that have a great history and past partners who have done a great job, but they haven’t been investing in young partners. Partners that currently run the fund at venture capital firms should think more about bringing more diverse investments, sourcing and relationships to make sure that this fund is going to be good for the next few decades.

CF: You’ve been focused a lot on chat bots recently. What opportunities for investment are you most excited about?

NQ: A lot of people have been talking about death of the apps, but I think it is about the evolution of apps. It is the apps that are able to integrate themselves into other mediums that will succeed. Those areas of integration are augmented reality, virtual reality and chat bots. I had a great meeting with a company last week and they were explaining to me how their current app is version 1.0, but version 2.0 will be integrated 100% with Facebook Messenger and WhatsApp. It is also interesting to see the percentage of people in Europe or Asia who buy things over messaging. Mobile commerce is much bigger in Asia and I think that is an increasing trend that U.S. consumers will move towards.

CF: Why do you think U.S. shoppers are behind when it comes to switching over to mobile?

NQ: We have an entire Slack channel to debate this exact question with our China team. The Chinese are quick to change their consumer behavior and WeChat has fully integrated into messaging to point customers in that direction. Over here in that States, we have been far more focused on desktop. It is also a trust issue. People don’t feel comfortable entering their information all over the place.

CF: A lot of investors are uniquely focused on Silicon Valley. How do you think about investing with a more global perspective?

NQ: The old fashioned view in Silicon Valley is why pass over a good deal locally to get to a good deal on a plane. There are great deals to be had all over the country and all over the world. If it means getting on a plane, we need to get on a plane. Silicon Valley is a great ecosystem, but it isn’t the only ecosystem -- particularly in the consumer landscape. We go to Los Angeles and the media tech companies and marketplaces are incredible. For enterprise, it might be easier to build a big business in Silicon Valley, but in New York, there is a lot of great consumer talent. And it is not just LA, San Francisco and New York City. There are great places all over the country that we need to look at. The same with Europe. A lot of people said to me they didn’t know how to feel about Brexit, but when value is destroyed in one place it is created in another.

CF: You’re originally from England. How are you thinking about Brexit?

NQ: If London loses its financial passport and a lot of resources are moved to Frankfurt or Dublin and talent goes with it, there is going to be hard to get a lot of great fintech startups to be in England. If they don’t lose their financial passport, then they are going to be able to grow great startups at much better valuations.

CF: Are there any investing areas that are overhyped right now?

NQ: I sometimes think that what we think is five years away is closer to 10 years away and what we think is 10 years away could actually be here in the next few years. We are all very excited about VR and we are meeting a lot of entrepreneurs and spending time in the space. A lot of venture capital firms have already made multiple investments in VR, but at South By Southwest this year I realized how overhyped it was. It was just all anyone was talking about, but when you look at the hardware, it is being delivered at such a slow pace. It will be hard to get it into people’s hands as quickly as expected. For the sports lovers and the game lovers, yes, they will buy these headsets, but it will be awhile before we have mass consumer products.

CF: From an investor standpoint, why do we need more female entrepreneurs to start or join consumer-facing startups?

NQ: A majority of consumer decisions are made by women. Over 80% of family health care decisions, for example, are made by women. Given the stats, it is difficult for a company to be built without a woman around the table. We always looks for authentic entrepreneurs. Having a co-founder who is woman is incredible valuable as you try and build these big consumer experiences across verticals. Jeremy [Liew] was one of the first investors in Snapchat and he said in the early days, 70% of their consumers were young women. They were really driving the discussion. What young people do and talk about and buy today is a key factor.

CF: You’re Lightspeed’s first female investing partner. How can we getting more women into positions of power in venture?

NQ: I want to have a long successful career in venture capital. I am very lucky to be working with great and supportive partners who want that too, but I am going to have to wait to have more time to have an educated opinion on this. I am seeing a lot of young women joining venture, which is great. I go back to my earlier point that senior managers of the VCs really need to believe in young women and help move them up in their careers.

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