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With Scott Orn

A Startup Podcast by Kruze Consulting

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Scott Orn

Scott Orn, CFA

Natalie Arora of Susa Ventures shares how she is building an incredible founder experience and introduces the Venture Fellows Program to diversify VC

Posted on: 08/03/2020

Natalie Arora

Natalie Arora

Head of Operations - Susa Ventures

Natalie Arora of Susa Ventures - Podcast Summary

Natalie Arora is Head of Operations at Susa Ventures, an early-stage VC firm. Natalie shares how she operationalizes an incredible founder experience and announces the Venture Fellows Program, a six-month training program for aspiring VC investors, to diversify the industry.

Natalie Arora of Susa Ventures - Podcast Transcript

Scott: Hey, it’s Scott Orn of Kruze Consulting and welcome to another episode of Founders and Friends. And before we start the podcast, let’s give a quick shout out to Rippling. Rippling is the new, cool payroll tool that we see a lot of startups using. Rippling is great for your traditional HR and payroll. They integrate very nicely, but guess what? They did another thing, they integrate into your IT infrastructure. They make it really easy for when you hire someone to spin up all the web services and their computer, which sounds kind of not a huge deal, but actually we did the study at Kruze. We spent $420 on average just getting a new employee’s computer up and running, and their web servers up and running. It’s actually a really good deal. It saves a lot of money. And the dogs are eating the dog food. We see a lot of startups coming in to Kruze now using Rippling. Please check out Rippling, a great service. We love it. I think we have a podcast of Parker Conrad, you can hear it from his own words, but we’re seeing them take market share, so shout out to Rippling. And now to another awesome podcast at Kruze Consulting’s Founders and Friends. Thanks.
Singer: When your troubles are mounting tax or accounting, you go Kruze Founders and Founders. It’s Kruze Consulting’s Founder and Friends with your host, Scotty Orn.
Scott: Welcome to Founders and Friends Podcast with Scott Orn at Kruze Consulting, and today my very special guest is Natalie Arora of Susa Ventures. Welcome.
Natalie: Thanks so much, Scott. Good to be here.
Scott: Yeah, great to have you. We’re both kind of laughing on video here because I knew I’d have a hard time pronouncing Arora, but I think I did pretty well. That was pretty good.
Natalie: You crushed it.
Scott: Awesome. Well, Natalie and I have been friends for a while and we worked together, and maybe you can just kind of retrace your career and tell us how you got to Susa Ventures.
Natalie: Sure. I grew up in the rural Midwest in small towns in Illinois and Wisconsin, raised by a single mother. And through a lot of grit and hard work, and through the power of community, was able to get a full tuition scholarship to college.
Scott: Wow. Where did you go?
Natalie: I went to ASU in Arizona. I had actually never even visited the state of Arizona before I decided to go to school there, but free college was pretty compelling at the time. There, I studied sustainability and focused on food, which was a brand-new program there at the time and remains a passion to this day. With that degree, I moved to San Francisco and dove headfirst into the world of startups in food and food tech. In particular. The first company I worked for, EcoScraps. Was acquired by a public company. The second one Hampton Creek, now called Just, became a unicorn during my time there.
Scott: Yeah. I remember that company, yeah.
Natalie: And the third, Juicero, went out of business and I stuck around to kind of wind it down, I should say. And through all of that, I had experienced a lot of the life cycle of startups and particularly the different outcomes. And with that experience, I started to get really curious about what it could be like to instead of work on one business and work with one founder, to maybe join a firm, continue to be an operator and support across a whole portfolio of founders and companies, and that’s what led me to Susa.
Scott: I’m always envious of your job. I think you actually have a really fun job because you get to have… It’s probably similar to mine where you have your hands in a lot of pots and you’re jumping on whatever’s hot or whatever needs to happen and getting it done. But then you can still look at the entire portfolio of companies and feel really great about the progress they’re all making.
Natalie: Yeah. No, it’s a really fun job and a lot of it is around connecting the dots, which is just so fun. Just finding ways to plug in different folks, different partners to create value and just create that unlocking for a foundation.
Scott: When you were interviewing at Susa, did you… It’s pretty interesting because a lot of times, this is a generalization, but a lot of people who work at venture capital funds tend to have worked at like the unicorn and then they go to the venture capital fund, they’re kind of hot and the company’s hot they used to work at. It’s often source deals from the network of people that you worked at the company with. But you’d had the unicorn and then you went to Juicero, which actually I still think it’s a great idea. I actually really understand the economics of Nespresso and some of these other things. I totally get why it raised so much money, but that’s a little bit untraditional, right? The company didn’t work out. It’s also kind of amazing you stayed and you were the one that wound it down. That’s actually, I’ve been involved in that quite a bit. It’s actually a super thankless job. Was that part of your pitch to Susa like, “Hey Ben, I’ve seen the good and I’ve seen the bad.”
Natalie: Absolutely. I mean, unfortunately more startups fail than succeed. They just don’t always fail so publicly and with that much money raised. I think it’s actually quite common to be a part of a company that didn’t work out for some reason or another. And the reality is that can’t be the fault of any one person on the team, and you learn so much from those types of experiences. I hope to not have to wind down another company, but you learn so many lessons from those experiences.
Scott: Yeah. Well, also I think a lot of people don’t know this, but venture capitalists actually spent a lot of time on the companies that aren’t doing so well. Everyone thinks that if you have a unicorn in your portfolio, that’s all you work on. But really, actually, it’s the companies that aren’t doing so well or doing okay and deserve to keep living, that you end up spending a lot of time. I would imagine the other there probably really value that and really kind of recognize that experience.
Natalie: Yeah, absolutely.
Scott: Yeah. That’s really cool. And you talked about growing up in the Midwest and the single mother, and you talked about grit. What are some memories that jump out at you or how’d you make it happen?
Natalie: Yeah. It’s interesting. Some of it is external. It’s learned, it’s your surroundings, your environment, and some of it is digging deep inside yourself. I think in terms of my surroundings, I certainly had a good example in my mom who worked super hard. She actually got her college degree over the course of probably honestly 10 years of us growing up, and her taking classes here and there and hustling it and working at night to make it all happen. And then also teachers I think were of course extremely, acutely aware of the importance of education right now in these COVID times. And I’m super grateful that even though I lived in a small town, 4,000 population, Mauston, Wisconsin, that didn’t have a lot of resources, but our teachers cared so much and worked so hard for us, wrote grant applications, got the resources we needed to help us. And so, I feel really grateful to have encouragement from that. And then I think internally when you don’t… And we see this a lot with founders too, when you’ve had struggles that you’ve gone through, you have to turn inward and just work super hard and keep your head down until you change your reality.
Scott: Yeah. I think that’s so well said. That’s actually why I asked that question because I feel like it probably gives you… Anyone who starts a business, there’s a famous saying that almost every entrepreneur says, which is “If I would’ve known how hard this was, I wouldn’t have done it in the first place.” Of course, once you finally start making progress and you get to the finish line, you’re very happy you did it, but it’s a struggle. It’s hard. And that’s why I asked that question because do you feel like you can kind of commiserate, but also celebrate the victories with the founders that you’re working with?
Natalie: Yeah, yeah. Absolutely. Go from being the underdog to starting to get some wins.
Scott: Yeah. That’s awesome. Well, at Susa maybe you can kind of explain your role there and kind of your day to day, I think that would be helpful for the audience.
Natalie: Yeah, absolutely. At Susa, and maybe I should explain a bit about us. We’re an early-stage fund based here in San Francisco. We’re on our third seed fund and our first opportunity fund, got a bit over 200 million under management at this point. And we’ve invested in incredible companies like Robinhood and Flexport and others at their earliest stages. And something unique about Susa is we really approach venture as family and being super supportive to our companies, being that trusted advisor. And we think of venture as a flywheel business. You have to see the best deals, you have to be able to be the top choice to founders to win those deals, then you have to be meaningfully helpful to them through that, that feeds your flywheel founders or for other founders. And so, the better each piece of that flywheel becomes and the better we treat people along the way, which is really important, the faster it spins and the better your ultimate outcomes are. And so, as head of operation, my role is to operationalize best practices and accelerate that flywheel and showing the best founder experience. And so, to do this, I run both firm operations as well as portfolio operations or what people call a platform.
Scott: I agree with you so much on the flywheel aspect of it. And there’s always a really good tell how good a founder’s experience with the VC firm was in that when they start their second company, because most entrepreneurs are crazy and they can’t help but keep starting companies, do they go back to those same investors to raise money the second time? And that’s kind of the ultimate compliment. And you’re right about the flywheel. I think it’s something we’ve benefited from at Kruze is that the founders really have a really strong network and they share best practices, they share who’s a good service provider, they share who a good VC is. That word of mouth or digital word of mouth is incredibly powerful. That’s pretty cool that you guys recognize that and you’re working to enhance that.
Natalie: Absolutely. Yeah. And platform is a relatively new function in venture. It wasn’t created yesterday. There are definitely some OG people who have been at this for upwards of 10 years, but fairly new. And so that’s typically defined as the support and services provided to founders post-investment. And so as more and more funds start up, the deals become really competitive, platform helps funds differentiate. And up until a few years ago, a platform and a platform team or head of operations, someone like myself, might have been considered a nice to have. But today, it’s really become a need to have in the market.
Scott: Yeah. For some context for the audience, when I was working at Lighthouse and Venture Lending, we were a fund too, this platform concept didn’t exist. You got the Rolodex of the person who is on your board of directors, that was your platform. That was like, if that person needs someone who can help the company, then you got helped. If that person didn’t know someone who could help the company, there was no recruiting team, operations team. There’s a lot of funds that help make introductions to bigger customers, like Fortune 500 customers. What is some other stuff that kind of would generally be defined as platform?
Natalie: Yeah. I think those are a lot of the classic categories. There’s talent, BD and sales, and community, I think. And I know that that’s a little fluffier, but that really is our flavor of platform, I would say, is community in building out the Susa family. And really finding ways to create value just by bringing people together. And Susa family, it’s encompassing not just Susa portfolio founders, but that’s also our LPs who we turn to sometimes to help unlock customers for founders. That’s also co-investors who we help bring around together with. It’s the whole… And it’s kind of like Kruze, right? It’s really great partners and service providers who can help companies as well.
Scott: Well, thank you for that. Appreciate it. But it really does take a village to kind of raise a startup and help the startup get where it needs to go. What are some of the platform stuff that you like to focus on? You talked about community, is there specific functions in doing that or specific programs?
Natalie: Yeah, sure. On the kind of post-investment side, I think there are a few key programs that we run all of which you are somewhat aware of. One is annually we put on Mountain Tech Summit, which is a super unique, one-of-a-kind gathering where we pull together Susa CEOs as well as great co-investors of all different stages and go to the mountains typically to Aspen. And yes, there’s skiing and there’s fun, but they’re also content sessions and intimate dinner settings. And it’s really just the chance for everyone to unplug from the hustle and grind of the Bay and Silicon Valley, and get to know each other as humans around the dinner table, on the ski lifts. And it’s really become an amazing signature gathering for us. Unfortunately, we had to call it off this year as you know. I know we were going to partner with Kruze to bring it to life this year, but we’re looking forward to bringing that back. And then on an ongoing basis, we have two event series that run. One is with boot camps, which we’ve also partnered up on. These are typically one hour, in this current environment, webinars where we partner with domain experts to do deep dives into company-building topics. This is everything from how to get PR, to how to build a sales organization, to most recently with Kruze and some other partners a section on debt financing, and everything in between. And just give our partners a chance to plug into some great education to help them build their businesses. And then the second one, which is purely on the community side, is our family dinner series. We bring together intimate groups of founders with a common thread, just to have a conversation on what’s top of mind, what are things that they want to jam with peers? And so, we get pretty granular on these now that our portfolio is about 110 companies, so we’ll bring together, early stage FinTech CEOs or early stage SaaS CTOs, and have a really meaningful conversation together.
Scott: Yeah. And probably the later stage folks can help the early stage folks in those conversations and vice versa. There was also a great story you told me about the Mountain Summit from two or three years ago. We have a client that we work with, that’s been a client for our company for a long time. And I was like, “Oh yeah… “ I don’t want to say their names because I don’t want to say anything I shouldn’t say. But the CEO is telling me how great the event was three years ago. And so, when I first met you, I was telling you about that. And you’re like, “Oh yeah, that CEO, we sat him next to a strategic investor and the strategic leather series B you know.”
Natalie: Exactly.
Scott: Which I thought was the greatest thing of all time.
Natalie: That’s representative of the Susa family. That’s kind of how it happens.
Scott: Yeah. It really is represented because it brings home the relationships and the network, but also getting to know people on a human level. Because you know that CEO, he’s a great person and the kind of person you want to back no matter what. yeah, that’s really fantastic. Yeah. And talking about those learning sessions, it’s been awesome being a part of those. But I know one of our team members, Healy Jones did one in person and at the end there was five founders talking to him asking amazing questions, so we could tell that they got a lot out of it. I think that’s a real value add. It’s super cool you do that. And I also think maybe, because you talked about things like post-investment, but I know that you’re pretty active before the investment, which I think is a critical thing because sometimes people over promise during the courtship phase of a venture capital to a startup founder. And so being able to demonstrate what you do even before you have money in the company, I think is a really strong signal. It’s like that family signal that like, “Hey, we care about you. We want to invest in you. Even if you don’t take our money, we’re still going to help you out.”
Natalie: Absolutely. And I don’t think it has to be a big thing either. I think the devil’s in the details, and again getting back to like how you treat people and how you interact with them. And I totally agree. I think we saw an opportunity as one of our differentiators to really be thoughtful about every touch point. Not just we’ve written the check, but just being thoughtful humans. A few quick examples of what that looks like and how we’ve operationalized it. One is before we actually meet with a founder for the first time to hear their pitch, they actually share the Susa summary with them, which is a one-pager that describes our investing pieces, our process, and then details on what we can provide post-investment.
Scott: I’ve never heard of that. That’s amazing. Wow. That’s really cool.
Natalie: Yeah, [crosstalk] this isn’t more common because the way I look at it, we expect founders to share their deck with us and give us context on their process, and so we think we should provide some context on Susa and how we operate going into the conversation.
Scott: I love it. That’s why I had that reaction because it’s like a offensive information grab from the VC. It’s totally understandable. The venture capitals are trying to make the best decision they possibly can, but it does feel like a lot of like me, me, me sometimes, to do that and extend the olive branch. And also, I think it’s a pretty strong… I bet you, you get some benefit and some founders get some benefit from the signaling aspect of it. Because like if they’re taking that seriously, if they’re reading that document and asking thoughtful questions, it probably shows you that they’re engaged, they have the same values that Susa has.
Natalie: Absolutely. And part of how we decided to develop that in the first place was actually by brought another stage of our process, which is also super interesting. After we’ve met with a founder when we make our decision, if we decide to pass, we send a thoughtful pass email. A very simple concept, not very common I would say. We think it’s really important in general to close the loop, of course, giving us right now. But we go a step further and our investing team gives very specific feedback on the why. And we also include a survey that we asked those founders to fill out to give us feedback on our philosophy too.
Scott: Wow, that’s a good too. Wow, that’s really good.
Natalie: And so, one piece of feedback that we saw a trend in, in those survey responses is that there were some instances where I’m sure our team forgot to mention our process or some details if for meeting with founders all the time. And so, one approach that we had to try to solve that is if we always send this ahead of time, of course we’ll verbalize it as well, but if we always send it, it’s been provided and we’ve done our part to get that context.
Scott: And they also just know. They don’t have to sit there and worry because there’s a lot of anxiety around raising money. The founders don’t know if they should follow up. It’s almost like the Swingers, how often do you call the girl you want to go out on a date with? Do you wait three days? Do you wait four days? The founders just don’t know and they want to work with you, but they don’t know if they’re sending a negative signal if they’re reaching out too much or whatever it is. That’s really powerful. Also, you made a point about just the little things being super important, and I agree a hundred percent on that. Because I don’t know if people… We work with tons of founders; my wife and I had been founders. It’s like you are so overwhelmed pretty much all the time. You just kind of live your life in this overwhelmed, too much going on state of mind. And so, having someone who just… Even the littlest things really make a difference and just lighten the load a little bit. I think that’s really cool that you guys do that.
Natalie: Thank you. I appreciate it. Always looking to get better.
Scott: Yeah. The survey thing is super smart too. I don’t think I’ve ever heard of a venture capital firm doing that as well. It’s almost like you’re bringing all the best practices of actually running a business to the venture capital world, which of course we sit here and go, “Duh,” but you guys are on the forefront of that stuff, so very cool. The other thing we were going to talk about, we joke before I turned the mics on, that I find this super interesting and fun, but that’s probably why I’m doing what I’m doing. You also do the hardcore operations, setting up systems and things like that. But do you find that the founders actually value that and empathize and appreciate your work there?
Natalie: Yeah. I think on the firm ops side, it’s a lot of in the background work that founders wouldn’t even necessarily [crosstalk 00:22:30]-
Scott: Yeah, you’re right.
Natalie: But I do think running the business of Susa, to your point, has a lot of parallels running a startup in general. And so through running that business, we learn tips and tricks and best practices that we can then share with them. And I think that also extends to our EA and office manager, Rachel, for example. She does an awesome job running our CRM and that workflow and our office and our gifting program and pieces of our onboarding program. And all of those learnings we can now share with founders because, to your point, they’re doing all the same things.
Scott: Yeah, yeah, it does. Even just being what would be like, “Oh, this is my favorite payroll system or this is what I use for CRM or here’s my survey tool that we use, a survey.” They liked that stuff because it just makes their life a little bit easier. And you’re right. Probably, your coworkers at Susa, I’m sure value that. I remember at Lighthouse, it’s actually there’s a lot going on and everyone thinks that a venture capital firm is oriented towards deals, and it is at some level, but these type of tools and systems and processes actually really help the firm be successful.
Natalie: Yeah, and I feel really fortunate in that my job was super fun too because in this role of kind of all-encompassing head of operations of the firm, I’m able to do the LP communications and the founder communications. And through that, get to know both, figure out how to connect the dots. And we recently sent out a blast where LPs to ask for introductions to customers for one of our portfolio companies where we knew there was a lot of overlap in contacts. And it’s just been so fun to bring together those two different stakeholders in the Susa family, and again, find that unlocking,
Scott: Yeah, I always love the LP, the annual meetings, and LP dinners and stuff like that. Because, I mean, a venture capital fund is made up of foundations, endowments, groups like that that invest a lot of dollars. But there’s usually a class of people who are just investing their own dollars who are high net worth people. And those are my favorite people sit next to at those events because they always have tons of crazy stories and are usually pretty awesome and are little like… They’re usually slightly wacky, but in a good way. I’m sure you have a good time talking to those people. And also, I’m sure like the work you do with them really makes them feel like they’re contributing even in addition to a financial contribution. That their time and their connections is really valuable.
Natalie: Yeah, absolutely. I think it’s fun for them.
Scott: Yeah, it is. That’s really cool. Well, there’s also a program that you’re launching at Susa that I’d love to talk about if you got a few extra minutes.
Natalie: Yeah, that’s be great.
Scott: Want to tell the audience what you’re working on?
Natalie: Sure. This is very early. We’re still in the building phases of this, but pretty soon we’re going to be launching the Venture Fellows Program and it’s a six-month program for aspiring venture investors. There will be curriculum, one-on-one mentorship with not just Susa GPs Chad, Leo, Seth, and then also their partner, Courtney, but also top GPs from the top VC firms across the industry. And the idea behind this is that historically venture capital has been a bit of a black box and it’s tough to break in. And so, our idea is to build this program in a way to expand access to folks who for some reason or another don’t fit that cookie cutter idea of what the venture capitalist is and where they come from, whether it’s education or geography, socioeconomic background, whatever it may be and give them a shot at it.
Scott: Well, and that’s amazing. And also, people in venture tend to hire people they know because they’re really busy and they don’t have a lot of time, and they’re usually not hiring a lot of people. And so, I think what’s really cool about this is you’re enhancing the circle or the circle of people that Susa Ventures knows and who you have access to. And by definition, you should find some really amazing people in there that you wouldn’t have found otherwise, which I think is really cool.
Natalie: Absolutely. And that’s why I’m glad to share it here. We absolutely have to get the word out to people beyond just our personal networks and our network as a firm, because inherently that’s what you can just access. And so, I hope that there may be some folks who listen in to Kruze Founders and Friends who are looking to break into venture.
Scott: That’s fantastic. I know the program isn’t completely set up yet, you’re still working on it.
Natalie: Yeah.
Scott: And we’re recording as a couple of weeks ahead of time before it actually launches, so Natalie still has a lot of work to do I’m sure. How would someone go about reaching out. Do they go your website? How should they inquire this?
Natalie: Sure. Just go to www.susaventures.com and we will very soon have a tab there for the program and on LinkedIn.
Scott: Yeah. When is posted, there will be a tab there I’m sure. Well, that will be really fantastic. Yeah, I think about how I got into Lighthouse, it was because one of the people I worked for at Hambrecht & Quist, JP Morgan, that was like an old school investment bank in the Valley in San Francisco. They went to lighthouse so they called me. And I had an interview, I think, against a ton of people, as I’m sure you had to interview against a ton of people to get your job. But I definitely had that relationship going into it. Otherwise, I wouldn’t even know the job was available. I never would’ve found a posting or anything like that. Because I knew set the right person, get a chance. I think that’s really cool that you’re building this fellowship.
Natalie: Thank you. Yeah, I mean, oftentimes those roles aren’t ever posted.
Scott: No. Yeah. Yeah, it’s exciting to see. I also think the stuff that AngelList is doing, it’s so incredible. There’s a guy, I follow the guy who runs Gumroad, which is like a checkout experience. You just buy stuff, buy PDFs or anything like that. He’s done pretty well. And he’s like, “Hey, I’m going to raise an AngelList fund pretty soon. Anyone who wants to… “ Capital is being democratized. AngelList is doing it for people who are not firms or for people who want to get on that road. But I think it’s really great that Susa is starting this fellowship because you’re going to democratize the knowledge of how a professional VC firm runs, and what a professional VC firm does and how they look at deals and how they build the network and the community and get that flywheel going. I think that’s really cool.
Natalie: Absolutely. And by the way, we aspire to match the diversity of the country and also of the customers that startups serve. And I think that’s really important too. This isn’t diversity for the sake of checking the box. This is diversity for the sake of building meaningful companies and finding great companies and empowering that through capital.
Scott: Yeah. I love it. Well, that’s really cool. I think it’s a noble pursuit, but also a pursuit that will probably make Susa Ventures some amazing deals. You’ll probably hire some really great people out of that, or the people who go through that will end up at another venture capital firm that you end up co-investing with or late stage firm that leads a round in a Susa Venture’s portfolio company. I think there’s probably economic impact and also a societal benefit you’re creating. Kudos to you for building that. That’s really cool. I know those things are hard. In addition to your normal day job, you’re doing that, which is pretty neat.
Natalie: It’s a full team effort. It’s pretty [inaudible 00:30:43]. Everyone’s pretty energized by it.
Scott: I love it. It’s the Susa family approach. Well, this has been amazing. You’ve already kind of told people where they could find you on the website. I don’t know if there’s an email box that people if they want to pitch Susa Ventures. Or if someone has a deal or wants to show you the company they built, how do they get in touch?
Natalie: The best place to reach out would probably be on Twitter to one of our GPs.
Scott: Wow, that’s awesome. That’s very progressive. I love it. All right, Natalie, thank you so much for coming by. I really appreciate it and congratulations to, A, the entire career you’ve had in which you’re building and also this fellowship especially sounds really cool.
Natalie: Thank you so much.
Singer: So, when your troubles are mounting in tax or accounting, you go to Kruze Founders and Friends. Hey, it’s Kruze Consulting’s Founders and Friends with your host, Scotty Orn.

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