On December 2, 2021, 500 Global is convening the global venture capital community in Miami to our PreMoney 2021 conference for an interactive experience at the nexus of culture, technology, investment and global finance.
Mar Hershenson, Founding Managing Partner at seed stage venture capital firm Pear VC, will be joining us to discuss how new funding platforms, such as StockX, Alt, Forge, and Allocate are making it easy to make small private capital investments.
An immigrant from Spain, a self described “mathy kid,” and an avid FC Barcelona fan, Mar founded Pear in 2013. The firm has backed Guardant Health (NASDAQ: GH), DoorDash (NYSE:DASH), and Gusto, among other companies.
ZM: Higher valuations are forcing investors to look for investment opportunities earlier. With later stage investors moving in, how is that affecting you?
MH: Pear has always invested very early, at the zero stage. We have been running an accelerator/incubator for the last eight years. We are doubling down on zero stage.
In terms of later seeds – we are adjusting our portfolio strategy but in general, we are not very valuation sensitive – when we see a winning company we go all in.
ZM: What is your advantage as a seed stage investor in this competitive landscape?
MH: Experience and focus on partnering with founders to find Product Market Fit (PMF). Most investors in our firm have been founders and we know how hard and intense it is to go through the search of PMF.
ZM: What are some of the questions that you hear from LPs, especially when it comes to valuations?
MH: LPs are more focused on portfolio construction: ownership rather than valuations. For 30 years, venture portfolios that LPs liked consisted of having 25-30 companies and owning 20-30% of each of them. This made sense when IPO valuations were $500M. We are in the area of IPOs being 10s of billions [of dollars] and thus one can be more flexible with target ownership. LPs are adjusting to the new reality where owning 25% of a company is becoming really hard.
ZM: What do you think the next investment opportunities are? What sectors are you excited about?
MH: Super excited (and worried) about Climate Change opportunities. The events that took place this summer opened everybody’s eyes to the reality of climate change being here. We are going to need the smartests minds across multiple disciplines–civil engineering, computer science, biology, etc.–to build products and services that help us deal with the next 50 years.
ZM: What advice would you give women trying to break into venture?
MH: My advice to anyone that wants to break in: It has never been easier to be an investor. The first thing is wanting and believing you can do it.
The second is to find your superpower–why a founder wants to work with you. We are moving into a time where venture money is a commodity and a founder will have many choices as to who to take money from, investors that have something to offer will win. So if you are a great recruiter over-index on that: create a newsletter around hiring, put together events where founders can meet candidates, connect a founder with candidates. This will make founders want to work with you. Or say you are passionate about fintech, have worked in three fintech start-ups, over-index on that. Share your learnings, your vision of future products, build a strong fintech network, and so on.
We all have a superpower that we can share with others. The great news of venture is that there is not one size fits all. We are all different and help founders differently.
Once a person is valuable to founders and has great opportunities to invest, no matter whether they are or have been an official venture investor or not, they become incredibly valuable to a venture firm and will find it easy to land a job in venture.
Check out our PreMoney agenda here.