Zoe Hewitt of EQT Ventures on building one of Europe's largest Venture Capital Funds via technology and founder support

Zoe Hewitt of EQT Ventures - Podcast Transcript

Scott:	Hey, it’s Scott Orn at 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 in their computer, which sounds kind of like 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 services up and running. It’s actually a really big deal, it saves a lot of money. And the dogs are in the Dogwood. Like we see a lot of startups coming in like Kruze now using Rippling. So please check out Rippling, great service, we love it. I think we have a podcast with 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 Founder and Friends. Thanks.
Singer:	(Singing). It’s Kruze Consulting, Founders and Friends with your host Scotty Orn.
Scott:	Welcome to Founders and Friends podcast, it’s Scott Orn at Kruze Consulting. And today my very special guest is Zoe Jervier Hewitt of EQT Ventures. Welcome, Zoe.
Zoe:	Thank you. Thanks for having me.
Scott:	It’s a pleasure. So, we actually had a great discussion off mic and we were kind of laughing because you have a beautiful name and I was mispronouncing the French aspect of that name, we’re giggling here. Maybe you can retrace your career and tell everyone how you ended up at EQT Ventures.
Zoe:	Yeah, absolutely. So, thanks for having me and a bit about me, so I think I’m one of the sort of rare talent people that deliberately chose to build my career in talent acquisition and recruiting. I went to the University of Oxford where I studied art history. And so, all of my friends and peers were going out to build careers in banking, and management consulting, and finance. And I said, actually, I like working with people and I’m really intellectually curious about how you can develop someone’s talent and how people go on to do really cool things by applying their skills. So very strangely I deliberately chose and sort out a role in talent and recruiting very early on. And so, my first real job was working for Apple on a leadership development program and there, they basically trained a bunch of ambitious graduates up on the best practices in talent management and recruiting. And I think there I really developed my passion for leadership, people operations and yeah, bringing really smart people into organizations and getting the best from them.
Scott:	I was just going to say, it’s super rewarding to do that. I love developing people too, and seeing them, A, recognizing the talented person who needs a break or needs just an entry point and then also helping develop people through their career. And it’s like, amazing, you see people just go on to do really incredible stuff, whether they’re helping your organization or not. So, I share the same passion you have for developing people. So, I think that’s really cool that you are doing that.
Zoe:	Yeah. And now looking back, I think actually at the time, Apple, they had a very progressive view on how people management should look and how leadership could look, they placed a lot of emphasis on coaching for results versus command and control leadership. So anyway, fast forwarding on the story, after I left Apple, I really wanted to work for smaller companies that were growing much faster. And so, I thought, well, why don’t I join a startup and see if I can bring some of these best practices in talent management and recruiting into these smaller organizations. Obviously, it’s a very, very different context working as a startup operator, but I did join one gaming company called Mind Candy, where I joined the talent team there and was responsible for essentially sourcing all of their talent engineering, talent and creative, talent into the gaming company in London. And then my next move from there was where I spent the most time before where I am now, it’s a company called Entrepreneur First. They are a talent investor, which is essentially they create startups from scratch by bringing really smart, high potential pre-founders together, and I guess matching them is the simplest way to explain what they do. They don’t actually match them, but they bring smart people together and from that startups are built. And-
Scott:	Like they take a business founder and a technical founder and match them or are they matching like one founder to a business problem?
Zoe:	Actually, matching is misleading, they actually don’t do any matching.
Scott:	Okay.
Zoe:	Essentially what they do is they recruit very smart people who are very talented and skilled, usually technical people, so engineers and technical PhDs, who have some sort of problem that they want to solve, but they don’t necessarily have to have an idea and they definitely don’t have to have a team. And then they spend enough time together and spend enough socialization time to then potentially meet a co-founder on that program. And if that does happen and does occur, EF will invest in that company as one of the first investors.
Scott:	That’s awesome.
Zoe:	So, I joined there as the first employee to build the talent function from scratch, which involved building the recruiting arm. How do you recruit these geniuses and convince them to quit their jobs at Google and come and do that? And also, the selection piece. So, EF is solving a sort of identification challenge or problem in founder selection. So most of these people had never built companies before, so you are really trying to select the people that you felt had the highest potential to be a successful founder. I was there for four and a half years, built a talent team of about 14 people. We expanded from London to Singapore and Berlin just as I was leaving the EF. And along the way, we raised a series A from Reed Hoffman and other top Silicon Valley investors. It was a really fascinating, very fast paced time of my career, but learned a lot along the way. That takes me to where I am today. I left EF after about four and a half years. And I think during my time there, I realized that for companies to become truly important institutions, the founders needed to then access talent themselves and build a team around them that was going to accelerate that company’s growth trajectory. And at least in Europe, that’s still currently quite a hard and broken process in recruiting top talent, particularly when you are an unheard-of startup. So, I grew more and more interested in how can later stage investors support companies, their portfolio companies to go out and do that and became aware of the talent partner role in VCs. And then very serendipitously met EQT Ventures who were just about to go out and look for a talent partner to join them. So that’s where I am today. And my job now is sort of twofold. I spend most of my time supporting our portfolio companies on anything related to people and talent that usually takes the form of helping them build their executive teams, and helping them build diverse and inclusive cultures. And then I’m also a talent advisor to the investment team internally to help them make more informed decisions before you invest in the company.
Scott:	Well, so let’s take those two kinds of separate conversations, I’m super excited about to talk about them. So, let’s through the talent support first, like helping the portfolio companies and you made a great point of like, Hey, they’re early stage startups, they’re kind of unheard of, people don’t know who they are, it’s hard for them to find good people. And I think maybe even harder is getting that really star person to join the team without the social proof of this is working or we’re going to be huge or whatever it is. And I think that’s one of the really high value adds that a VC firm and someone in your role can provide, you can actually be a spokesperson for the company and say, “Hey, these people are going somewhere. We’ve put our own money in the company. You should trust us. You should join.” I mean, how much of your job is finding people versus selling or convincing them that this company you’re working with is the next big thing?
Zoe:	Yeah. I think my time is almost entirely stacked towards the later stages of the talent funnel. So, to your point, I think actually finding the talent you want to hire has become a much easier problem. So, thanks to platforms like LinkedIn, and the networks that VCs have now, I think actually it’s far easier to pinpoint, Oh, that’s the person I want to hire for this role. It’s actually the assessing of that talent. And then the closing of that individual seems to be harder for early stage companies in Europe. Of course, I help out with introductions and spend a lot of time pointing founders in the right direction of where they might find someone. But I think where we can add real value is in making sure that they’re selecting the right person for that role and for that company, and then doing everything we can as the [inaudible] VC to get that person excited and accept the offer.
Scott:	It’s a great point. And we were talking before I turned the mic on that, I had interviewed Glenn Evans of Greylock recently, and Glenn was saying that, actually, you can be one of the key variables to winning a deal, like your venture firm being able to actually invest in the company versus another top tier firm, because you’re so good at helping them source talent, you can kind of demonstrate the value add. I mean, do you see the same thing and experiencing the same thing?
Zoe:	Yeah, absolutely. For the best founders, they’re usually beating top VCs off of a stick. So, I think in terms of positioning yourself as a differentiated value add VC, I think the talent conversation is always a super attractive one to a founder that knows that they’re going to have to go out and build a really, really amazing team. And I think what’s quite different about my involvement in the fund versus a sort of traditional talent partner role is that I get involved much earlier. So, before we invest in companies, I’m usually introduced to founders. And so, we’re talking about talent and their plans to grow their team, but really early on in the process, which one, gets them really excited. But two, that gives them a sort of, try before you buy, this is what you might if we end up being your partner.
Scott:	Yeah. So, there’s some pressure on you because you have to be a great representative of the firm and carry the message, I’m sure too.
Zoe:	Absolutely. That’s a really exciting part of my job. I love talking to founders about how they plan to grow their teams.
Scott:	I love it. And then there’s a second aspect of your job which I found super interesting, which I didn’t even realize you were doing, and maybe you can kind of talk about it, but it’s basically like an analysis from a talent’s perspective of the actual founders you’re investing in.
Zoe:	Yeah, absolutely. So, this is one of the reasons why I joined EQT Ventures versus another fund. I think for me, there’s a really interesting challenge in VC, and maybe it’s like paradox around talent because if you speak to most investors, particularly investors operating very, very early stages of company building, most will tell you that talent is a really important factor in making the decision to invest or not. And I know you definitely know that. And so talent is really, really critical, but it’s usually the area of the company that doesn’t have this as sophisticated due diligence process or even time spent on it compared to other things, market problem, growth potential. So-
Scott:	Kind of cool with it too, right? It’s kind of like, I think it’s actually more difficult to evaluate that’s why it’s less scrutinized in a way, does that make sense?
Zoe:	Definitely. It’s far harder to carry out an assessment on a person. And it feels a little wooly, and soft, and numbers are hard. And so, I think that there’s a bunch of reasons why that is the case. And so, I think what we’re seeing in the industry is that a lot of those talent decisions come down to gut-feel, and a sense of a very subjective assessment. And so, my interest is in, can we make those decisions we’re making a little more robust and a little more evidence-based and more informed by just spending a bit more time with teams and founders and also applying a bit of structure? And so, my role is definitely not to judge talent and play Simon Cowell on the X Factor and say pass fail, but my job is thought to help my colleagues on the investment team, make sure they have all the information that they need to make a really, really informed decision on a team.
Scott:	Do you do like a personality assessment? Because we started doing personality assessments at Kruze when we were hiring, and actually it’s really helped us because we can see some people who are perfect fits for the job, and some people, this is a little different than your use case, but maybe applying just to get a job. And I can see the same thing being like, we’ll talk about EQTs, like technology investment and the Mother Brain and all that in a second, but like, I’m assuming you want to find founders who really appreciate that and have that same methodology, that approach, is that the kind of [inaudible] you’re doing?
Zoe:	Yes. I think first of all, I am a massive fan of talent assessments that are psychologically robust. So, I’m a big fan of those sorts of tests. However, there is a challenge when you’re trying to use that in the entrepreneurial success factor context, and that’s because most of these tasks haven’t been designed to select entrepreneurs. And as you know, founders are very spiky characters, and definitely not well-rounded. Most of them would probably not pass a generic interview for a large corporate company, they’re very high variance. And so actually I’ve done a lot of testing, I’ve done a lot of investigation, I haven’t yet found a test, which I think truly gives credit to the entrepreneurial personality if we were to generalize. The second thing is, there’s been a lot of research on successful traits of founders and entrepreneurs, but it is kind of inconclusive and inconsistent. So, the list is really, really long. If you ask someone, what do you think makes a successful founder? You’ll end up with about a hundred traits and all of them are really great things, but they’re not unique to founders. So, my focus instead is on seeing whether we can surface more information around what the founder is really, really strong at, and whether that is situation really and context really relevant to the problem market they’re going after. But more importantly, when that strength is overused, which we all have strengths that we overuse, what are the performance risks associated with that they should be aware of going into it?
Scott:	That’s such a great point. I actually know what you’re talking about because I took our own personality assessment and there’s like four categories and I am two and a half or three standard deviations on three of the four categories, which is not like what you want from a normal human being. And I’m high functioning and a nice person, but I just have certain traits that I have. And for me that’s [inaudible] That was actually really helpful for me to understand my strengths and weaknesses, that was the first time I ever did that. I’m sure founders talk to you and say like, “Oh my gosh, this map you’re giving me of my personality, and my strengths and weaknesses is probably pretty helpful.” Do you ever get the thank you from them?
Zoe:	Yeah, absolutely. And in fact, I think when I first joined the fund, there was a little hesitation around doing this kind of work with founders before we’ve invested, because it might be too invasive and how will that be received? The reality is that founders love going through this exercise and they love having discussions around what their strengths might be and their weaknesses might be and how we could support as a VC. I think it’s estimated something like two thirds of people don’t know their own strengths. So most of us do not know what we’re really good at, and therefore we definitely don’t have a clue as to when we’re overusing that strength and when it’s derailing us. So yeah, my focus is on like, how can we help the founders raise their own awareness? And that is going to be immensely valuable for them on the journey in building the company, whether we invest or not.
Scott:	I love that you have that conversation and then you’re also the person that can help them then find the people who can complement them, I think that really sets you apart from other firms in that you’re thinking about it from a personality and a fit perspective, and I’m sure not every company works in the VC fund and so sometimes you have to have really tough conversations. I’m sure having that kind of profile, and the background, and really understanding each other helps in those difficult conversations with founders, right? Do you ever go back and be like, Oh, I remember Marcy or Bob, these are his strengths or her strengths, make sure we need to kind of convey this difficult conversation in a way that they can understand it?
Zoe:	Yeah, I think we’ve definitely started to see the observations we’re able to make in the pre-investment process can positively affect the relationship that we then build with founders. And we know when to apply pressure and when to not, and what’s going to get them motivated and bought in, and what’s not. As this build out at the fund, I’m very keen to stress that I think this person should be a two-way street. So as much as we’re asking founders to dedicate the time and give us this information that’s very helpful for us, they should also know about us and what our strengths are and what our performance risks are. So-
Scott:	That was my next question, I was going to ask you that question like, do you share your personality, strengths, and weaknesses because everyone’s got a story of kind of difficult partner at like the board meetings or things like that, it’s a two-way street basically.
Zoe:	Yeah, absolutely. So, as we’re going through this process with a founder, I always share my own strengths and how they flip into risks. And there’s a few psychologically informed strengths assessors like profilers, and I always share my results from that and say, one of my top strengths is emotional control. So, if you’re building a crazy, fast growing, chaotic company, I’m probably the person that can help steady the ship. However, when I’m under immense strain and pressure, and I’m overusing that strength, I might be difficult to read. And that’s an example of how something that has been very successful for me could easily flip into something that would not be creating a positive effect or impact. So, I’m now keen to get the entire investment team to take the same test so that they can share their own profiles when they’re talking to founders they want to invest in.
Scott:	I love it. We actually do that at Kruze, we share with everyone we’re hiring our personality. And the other thing, I’m not sure if you’ve done it yet or not, but what we found, it was great to help our hiring and improve that, and that’s the equivalent to you investing in certain founders, but actually a facilitated conversation amongst our management team and just team in general about each other’s strengths and weaknesses that people didn’t understand. You said that like two thirds of people don’t understand their strengths, well, it’s even harder to understand someone else’s strengths. And so, we’re able to like produce these PDFs and we can talk about it. And sometimes I’m a little impatient or sometimes I’m rushing things. And so other people in the organization can call that out and say, “Hey, you’re leaning in a little too hard on your inpatients, slow down a little bit.” And it’s super healthy because it gives everyone a voice and it gives everyone a central reference point so that no one is offended. It’s just like, everyone knows how you are, we’re just slowing you down a little bit.
Zoe:	Yeah, exactly. And I think normalizing the fact that everyone does have strengths and everyone has performance risks associated with those strengths. And it’s not necessarily a weakness if you know how to manage it. So, the exercise is really raising the self-awareness of the founder, but also the awareness of the team as to how they can become a functioning team. And I actually think it’s really important to the diversity conversation because by doing that exercise, you’re able to see where homogenous patterns lie within the team and where you may need to bring diversity in, cognitive diversity or just diversity of how you solve problems. So actually, I use the talent assessment conversation as a shoe horn to start the diversity conversation from a very sort of evidence-based, data-driven starting point.
Scott:	I love it. This is fascinating, the fact that your fund does this shows how progressive you are. There’s one other thing I want to talk about, which was just like the technological approach and maybe the structure approach of EQT Ventures. Maybe you can explain Mother Brain and tell the audience how it works and how you run the firm with it.
Zoe:	Yeah, definitely. I can try. I’m not the person that built it, but no. So, I think one thing that’s different about EQT Ventures is we’re obviously a fund made up of former operators and former founders, so we have that sort of product DNA in ourselves. And so, what that’s meant is we have spent time building our own software internally for the fund and it’s called Mother Brain, it’s a way that we can make more data-driven investment decisions, and it is essentially like an operating system for the investment team. And it started out helping the investors on our team source companies that are outside of our network and pay attention, or be alerted to companies that were growing really fast that we might not have heard of, or might not even be announced, sort of geographical focus zone. And it’s really become something that’s very foundational announced the way we work as an entire team. So not only does it, I think the entire sort of investment process now is run on Mother Brain from the sourcing all the way through to the voting at the investment committee. But we’re now even thinking for our operating team, how can I use it for talent related purposes? Is there a way that we can use this to predict or identify founders before they start the next thing? So, I’m super excited about the potential of this and not many people know that actually there’s a fully staffed team around it of engineers that are building this. So, it’s not just lip service and smoke and mirrors, which I have to say, I thought it was before I joined the fund, but it’s real.
Scott:	So, I worked in Venture Capital from like ‘02 to what? 2013, 14, something like that. And in those days, an investor would invest in your company, and they would sit on your board and you would get the benefit of their Rolodex, but pretty much like no one else’s Rolodex, even Rolodex is an old term, their network, right? And then like Andreessen Horowitz came by and was like, “Hey, we’re going to turn this into an agency approach and help in a lot of different ways.” And that was pretty revolutionary. And now what you folks are doing with all this technical analysis and data-driven, everything you’re doing, it seems like kind of version 3.0 of the Venture Capital model, I think it’s really interesting.
Zoe:	And to that point, one of the data sources that Mother Brain uses is our own networks that we’re bringing to the fund as former founders and former operators. So, I started to use that as a way to surface, who do we know between us that might be valuable to introduce to the portfolio company? And my focus at the moment is helping our portfolio companies expand their shortlist for new board positions, because I feel that we can help them source more diverse candidates for that list.
Scott:	That’s amazing. I just interviewed Natalie Aurora at Susa Ventures like two weeks ago, and they have a similar diversity initiative and that stuff works so well because you’re right, the echo chamber of like, if you went to the right school, you know those people and you can get on boards or work at the same company, you can get on boards. But I love how you’re kind of getting outside that immediate circle and talking to a lot of different people because board seats, they’re kind of intimidating on the outside, it sounds kind of scary. And it is a lot of responsibility, but once you’ve kind of done it a few times, you know that you’re just like a special advisor as a company and the company’s going to take your advice sometimes and not take your advice other times, and that’s okay. So, it’s actually something that more people should have access to so we can get out of that echo chamber or connection limitations.
Zoe:	Absolutely. And you’re so right, I think board roles are really inaccessible and they’re very rarely taken to market in a sort of public fashion [inaudible] usually are working across our portfolio to run those searches. But I think in my experience, the challenge I found with the majority of search firms, not all of them, but the majority is that they will build a shortlist based on a really narrow view on what makes a great board member. And that usually means, in our world and in the sort of early stage venture world, someone that has been a former CEO or CFO, or has played a board role multiple time before. And that directly, already excludes a lot of women from the list, for example. So, I’ve been able to use Mother Brain to take a broader approach and see, well, who are the women that have scaled a tech company and could actually add value at board level from an organizational development point of view? And I’ve been able to find some really, really talented, exciting profiles to share.
Scott:	I totally agree. Or like someone who’s a VP at a tech company, who’s not even the CEO, but they’ve helped the company grow or built something really amazing or has this … Like I was telling my wife and that’s I said, hopefully she’ll be on a bunch of boards when we’re old so I can retire. But she’s a woman who’s built around company. It’s like that kind of stuff you learn so much, even though it’s not a multi-billion-dollar company, it’s like, she actually knows what she’s doing. So I think that’s fantastic. This has been amazing. You have a super interesting job. I think if I wasn’t working at Kruze, I’d probably be wanting to do what you’re doing. I can totally visualize how this is so helpful to the founders, just being able to take that personality test, understand who they are, in the partnership understanding who they are, because so many times you’re sitting in the partnership being like, what kind of person is this? Should we invest in them or not? Is this the right decision? And so, having that psychological profile and having them be receptive to it probably, is a real coachable signal for your firm too. So, I think what you’re doing is fascinating.
Zoe:	Yeah. I’m just distressed it’s by no means something that I think we would ever enforce on a founder, but it definitely is revealing to see which founders are really sort of bought into this conversation and which ones aren’t. So, we’ll see how it grows from here.
Scott:	I love it. Well, Zoe, thank you so much for coming by. I really appreciate it. You got a cool job, I really like it.
Zoe:	Thank you. Thanks for having me.
Singer:	(Singing). It’s Kruze Consulting, Founders and Friends with your host Scotty Orn.

Zoe Hewitt of EQT Ventures on building one of Europe's largest Venture Capital Funds via technology and founder support

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