On December 2, 2021, 500 Global convened the global venture capital community in Miami to its PreMoney 2021 conference to talk about the future of private capital.  

Lolita Taub shared with us her journey as a Latina trying to break into venture capital, as part of a panel on emerging VCs, especially from underrepresented backgrounds. Lolita wears multiple hats. She’s a VP of corporate development at a software engineering services company, but her passion lies in investing in what she calls community-driven companies as a co-founder and GP at the Community Fund.

You can listen to Lolita on our podcast Rise of the Next, where she talks about what drove her into venture capital and her investment approach. 

Subscribe here to tune into future episodes on major streaming platforms. 

 

TRANSCRIPT

Lolita Taub

Thank you for having me.

Shereen Abdulla

We’re also, at the time of recording this podcast, at the PreMoney conference out here in Miami, on December 2, and you’ll be going on a panel in a bit.

Lolita Taub

Yes, I’m so excited to talk about the future of VC.

LOLITA’S CURRENT WORK IN VENTURE CAPITAL

Shereen Abdulla

Are you able to share what you’re working on that’s in stealth mode?

Lolita Taub

I don’t — I think there’s some legal liability in it.

Shereen Abdulla

What’s the gist of it?

Lolita Taub

The gist is, I will be one-upping my game. I think, what is right now, I can tell you that building the community, and building the bridges, and serving the folks that I want to invest in and bring on my journey as LPs as well. One thing that I’m very focused on is who are the LPs that believe in me, because when you’re an emerging fund manager it’s like investing in a Pre-seed founder, you’re really — yes, you can do the checkbox thing, market, traction or whatever your due diligence list is, but ultimately, so early on, it’s about investing in the people. So, whoever comes along my journey, I really want them to be in it with their heart and believe that there’s going to be someone working their ass off for a really long time to invest in the best founders, achieve alpha, and all at the same time enable the next generation of the VC startup ecosystem.

LOLITA’S VIEWS ON THE FUTURE OF VC

Shereen Abdulla

What do you plan on talking about? What is the future of VC?

Lolita Taub

Yeah, I think that question can be answered in so many different ways, but for me, personally — you can’t see me, for those who are listening, but I’m wearing a Mexican dress — the future of VC is not just US-based, it is international. Emerging markets are something that we will talk about on the panel. I know some of our panelists, and I’m so excited to hear of the different things that we’re seeing outside of the US. I do invest in North America, but also in LatAm, and to be able to see the opportunity that is outside of Silicon Valley in emerging markets and that we’re neighboring is really exciting. When you can have unique insight because of your socioeconomic background — I came from nothing and a different culture, Mexican culture. Right now, I’m literally living in Mexico City, exploring the ecosystem and really understanding the founders, the VCs.

How do we tap into an underserved, underestimated market? Here in the US, I’ve worked a lot with investing in underestimated founders, not to be confused with underrepresented. Underrepresented is a quota, it’s what percentage is female, male, what percentage is whatever demographic. Underestimated is literally — there’s an under-estimation of the potential that a founder can go and create a unicorn because they don’t fit the traditional status quo Silicon Valley model of a white cisgendered guy who came from money, went to Harvard, and worked at a FAAMG or something. And what we’re talking about is there’s so much money being left on the table when you don’t go out and invest in underestimated founders. What about underestimated markets and underestimated founders in these markets?

LOLITA’S VC INVESTMENT VIEWS

Shereen Abdulla

When you’re evaluating investment opportunities, how much emphasis do you put on the community-driven versus the being-founded-by-an-underrepresented founder aspect? 

Lolita Taub

Yeah, so the thesis is Pre-seed, community-driven. So are they — did they pass the three-element test? That is one thing. I’m looking for a founder who is community-driven themselves because sometimes —

Shereen Abdulla

An underestimated or underestimated founder?

Lolita Taub

It doesn’t necessarily have to be, but I think there’s a lot of opportunity there. So after all of what I’ve said, it doesn’t mean I don’t invest in white, cis-gendered guys who went to Harvard. In fact, I have white males that probably went to Harvard.

Shereen Abdulla 

In your portfolio? 

Lolita Taub 

In my portfolio. I’ve invested in 96 companies, there’s bound to be all of the dimensions. And while I believe there’s this other level of unit economics when you look at the valuations, you get a discount because other people are not valuing them. So, there are all these different elements. What I’m looking for are the best companies that will out-perform and allow me to create alpha for my LPs. And so it really depends on how you’re looking at it. Do they have to be underestimated? No, but is that who I believe — there’s the best from a business perspective. That’s the best case, you have community-driven underestimated. Oftentimes, too, what I’ve noticed is, from a socio-economic perspective, when you come from less you tend to be more community-driven. So, it’s more organic and normal. Community-driven, I think, is a way to approach even life, as opposed to just, “I think I’m going to have a community.”

Shereen Abdulla

And you’re talking from a personal experience when you say come from less?

LOLITA’S BACKGROUND

Lolita Taub

Yes, absolutely. My parents immigrated from Mexico, so it’s interesting, I’m going back to where they started. They came here in the US to give me a shot at the American dream, and I’m going back because I believe I can create alpha in investing in both North America and LatAm.

Shereen Abdulla

But you’re bridging both geographies, right? 

Lolita Taub

Oh, yeah, for sure! But, to go back, I grew up in South Central. My first home was a garage, my dad turned it into a one-bedroom apartment. We had nothing. My parents were illiterate, they didn’t finish elementry school. My dad’s wish for success for me was to finish high school. But, throughout it all, we couldn’t have survived without the help of our community. From basic needs: food, shelter, security. South Central is where — I’m sure you’ve heard the Bloods and the Crips in a rap song, that’s where the *Censored* The Police song came from. Where the riots, I — the Rodney King riots, if you know of them — I was there. I wasn’t watching it on TV, I was there, I was living it. And so, community has always been really important. And what I’ve realized is for GPs, for investors, we need to lean into our unique insight and our unique ability to identify problems and ways to solve. And for me, community has been helpful on the most basic level in business — again, Airbnb and VRBO. So, it’s amazing. And what happens is you get to do really awesome things with great people, invest in great companies and enjoy all of this because it is a lot of work. 

WHY AND HOW LOLITA ENTERED VENTURED CAPITAL

Shereen Abdulla

Is that why you became an investor?

Lolita Taub

I became an investor because there’s an opportunity here and I do believe that my unique insight gives me an edge in outperforming. I am a little competitive, so let’s make a lot of money! And part of the reason why I also became an investor, outside of the business side, at the end of the day, is giving my family a better life. My mom still cleans houses, to this day. So, I am going to keep hustling? I’ve been on this mechanical VC bull. 

Shereen Abdulla

But you can make money doing a lot of things, so why investing?

Lolita Taub

Why investing? Because money makes a lot of things happen, from my mom being able to have knee surgery, to empowering individuals to be able to take their talents and create the solutions that the world needs, while creating a lot of wealth for me and everyone who’s involved. And I’ve mentioned  before, my background is in sales, and sales is, for me, an exchange of value for value. What is even better — and I’ve sold hardware, software services, and that was great, but then what happens with technology? To me, it’s the juncture point between markets and opportunities, and the ability to create the future, create money, generational wealth. That is really exciting. Also, I’m a really big nerd, so I love all the things we’re talking about, I’m constantly like, “How does this work?” And you’re always learning, it’s very humbling. You don’t know everything, ever. But you get to also work with the smartest people, the most passionate people, probably the craziest and a little masochistic people. So that’s also part of my answer, probably too. I think there’s way easier ways to make money in a more conservative way, but go big or go home, right? This is high-risk, high-reward, right? Or not. I think that, for me, it’s all in or not, and this is an opportunity to not just change the lives of my family but everyone else in my community. And there’s also — money is associated with power, and if you have been marginalized, treated poorly your whole life and it’s so unfair, and you’re able to come from a place of abundance and move our society in a better place. If you give the power to the people who are actually representing the population, I think that’s a good thing. Now that’s not my mission, but I very much hope that, as I share my journey, as I build, and give, and serve my community, that it does work out that way, that it’s a ripple effect, and that we literally are more inclusive to the opportunity that’s sitting there, that’s being neglected, that’s being maltreated, that’s being marginalized. And I’m not for that, I’m like, “Why would you leave money on the table? And why would you not want to learn more things?” I think it’s just exciting.

Shereen Abdulla

You make it sound so easy, but I’m sure you’ve face challenges along the way, right?

Lolita Taub

Of course! I was facing challenges getting in here, right? I was not even being allowed in here, into this room.

Shereen Abdulla

But we figured it out! 

Lolita Taub

We figured it out, but I’m facing these things all day, every day. 

Shereen Abdulla

What are some examples? 

Lolita Taub

“Why a fund? I’m not sure you want to do this. I’m not sure you belong.”

Shereen Abdulla

Who challenged you in that way? 

Lolita Taub

Oh, so many people in the VC space. I remember when I was first getting started, it was probably the worst. I think people now consider what they say because of my following, because of my community, because there’s a community of us that are changing the future of VC.  But at the beginning, they were like, “Oh, I’m sorry, you didn’t go to Harvard?” “Oh, why don’t you do it all the way, and if you really wanted to have a fund, obviously, you would quit everything and jump into it.” And I’m like, “Dude, I don’t have a trust fund.”

“You’re not very committed if you are working on anything besides this.” “Oh, I’m sorry. You don’t check the box, if —” “Did you go to — did you work at any of these companies?” “Did you have an exit?” “I don’t know if you’re really made for this Lolita?”

How can anyone enter an industry that’s been exclusive for so long with that kind of welcome? And so I try to talk about that because the reality is there’s a lot of bad stuff that happens and a lot of it is emotional abuse and bias. There’s something really interesting that happens when you talk about underestimated. The default thing, and it just irks me, is, “Oh, so you’re a social impact investor?” The moment you say that, it was like a default bias that you associated, almost like philanthropy — something good versus actually, this is a big ass opportunity to make money. So there are people who are open to this idea of, “Ah, maybe I can make money in the majority of the people who have been ignored, but they actually have the biggest amount of purchasing power and there’s all this opportunity.’ And maybe it’s also like, “I don’t get it. So there’s not a lot of people in it, so we should go after it.” I think that needs to be part of it, but it’s complicated, right? Because VC is supposed to be about taking risks, but then why do we have so many cookie-cutter VCs?

ADVICE FROM LOLITA

Shereen Abdulla

And what advice would you give to up-and-coming investors who come from underestimated backgrounds who are looking to break into the VC world?

Lolita Taub

Yeah, that’s a really great question. actually, a journalist from the Business Insider asked me the same thing and so I will share my TL;DR of what I shared with her. First thing is, know that you belong, no matter what anyone says, or whatever your little voice inside says, because internalized racism is real and it’s something that so many of us have to work through. So number one, you belong. If this is what you want to do, that’s what you want to do! It’s a hard journey, but if you say it, I’m going to take it at face value. Number two is really understanding what your thesis is and to investing — because, honestly, we see it’s all about how can I make other people more money, right? The other thing would be, really understand your three customers, which we talked about before. You have your founders who you’re selling capital to. You have your LPs who you’re selling — you’re basically, well, you’re taking their money, but you’re selling them what you’re building. And then there’s the ecosystem, that can be operators, that can be different organizations that can do a couple of things. One, be part of the different funnel when you are, as a VC, but also can help and complement your support after you invest because the investment is the easiest part, it’s what comes after we sign — how value-add are we? And I don’t think any individual person or fund needs to do it all but you do need to be able to leverage a community. Again, I am biased because I’m community-driven.

Shereen Abdulla

Well you see an opportunity in it, so…

Lolita Taub

That’s what it is. I have community-eyes. But to your point earlier I will say this, just because I say that — for those founders that may be listening, your business does not need to be community-driven to be successful. I just happen to be really bullish on them.

Shereen Abdulla

And if it is community-driven, hit Lolita up on Twitter!

Lolita Taub

@Lolitataub, I am there all the time.

Shereen Abdulla

Thank you so much for coming on the show. I’ve had a wonderful conversation and I do hope that the listeners have come out of this with some takeaways.

Lolita Taub

Yeah, definitely. Thank you so much for having me.

 

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