'Venture capital is a very human business' - Jessica Peltz-Zatulove, partner, KBS Ventures
Ahead of her participation at this week's 3% Conference in New York, The Drum caught up with Jessica Peltz-Zatulove, partner at KBS Ventures, to discuss how venture divisions can strengthen creative agencies, the inequalities facing female founders and why VC is an inherently human business.
Jessica Peltz-Zatulove, partner, KBS Ventures
In a world where brands and agencies are fighting to stay relevant with consumers, those who can tap into innovation will be the ones to succeed. Yet despite increasing initiatives from agency groups to work collaboratively with the startup world, the reality is often more fractured as agencies can struggle to stay ahead of the curve, while startups fail to resonate with agencies' hierarchical structures.
So for KBS as a creative agency, having that vantage point of being able to see what's ahead thanks to its ventures arm, has lent the group a competitive edge, according to Peltz-Zatulove, who focuses on investments in early stage startups in digital media and marketing tech.
"We're often seeing things pre-revenue or pre-product," she says. "Most of these companies wouldn't get to a large agency for 12-18 months. From an investment standpoint, we usually only make a handful of investments a year, but we're still able to act as a pipeline for innovation to the rest of our agency and across our network at MDC Partners."
With a background in providing brands with strategic context around the startup space, Peltz-Zatulove is no stranger to the whims of the tech world, and that includes the unfortunate gender disparity in the space.
She cites recent research pointing to the finding that startups with women partners perform 63 per cent better than those without. Why, then, do gender disparities remain within the tech community? The overall number of women in VC is going down, with Peltz-Zatulove claiming it's unconscious bias, rather than a pipeline of talent, that's to blame.
"Often it's the woman getting passed over for a male for a partner role, or she's told to go and get her MBA, which happens time and time again. We need to recognise there's an pipeline of amazing women that provide a diverse perspective on different investment opportunities."
This issue has inspired the thinking behind Parity Partners, the aim of which is to create - in Peltz-Zatulove's terms - a "phenomenal" database of women to become a recruitment pipeline, as well as connecting women already within the community.
The sands are beginning to shift, however, with more and more VC firms recognising that their portfolio is predominantly male and founders becoming aware of those disparities. Lack of team diversity within investments could even be starting to impact future deal flow, believes Peltz-Zatulove.
"It's becoming more visible which venture firms have women partners and which ones don't," she says, citing one example of a female founder who asked a VC firm whether they had any female partners. When they admitted they didn't, she didn't allow them to fund her. "I think it can cause them to lose deal flow if they don't have partners who really resonate with the founders - who are the real talent in the ecosystem," she adds.
Peltz-Zatulove suggests women excel in VC as it's fundamentally a people-centred business, in tune with propelling others forward and helping them succeed - something women in particular often have a natural tendency towards.
"VC is a very human business. These are long-term relationships that you're building with founders and other investors. It's constantly a very bumpy road working with early stage founders, and you have to be able to empathise with them, stay level headed, supportive and nurturing."
"While skills can be learned - it's not that difficult to learn how to read a financial model - you have to genuinely enjoy helping other people when you're a VC. It's something women do really well and find satisfying; being able to look at it through the lens of 'my success is your success'. You have to be able to put yourself in the founder's shoes and and empathise with them, put yourself aside and put all your effort into helping others succeed."
Female startup chief executives often need to work even harder to demonstrate what value their solution has in terms of the problem it's solving, she says, and crucially why they are the person to steer the ship and solve it.
"Women CEOs have to have an abundance of conviction. Sometimes you see women not raising enough money - they don't ask for enough," she says, while acknowledging that things are starting to improve as mentoring levels increase and more female founders pay it forward in the community.
In line with the theme of this year's 3% Conference, we ask Peltz-Zatulove what action point she would advise founders to take to create better diversity in tech. "Recruit out of your comfort zone," she says. "You're getting your talent from people you used to work with, or it's pretty limited to your inner circle. Work to break out of that comfort zone and there will be so many more interesting options. And don't be afraid of it - having different opportunities around the table is just going to make you a more balanced, well rounded company, so encourage diversity in all facets."
The 3% Conference takes place in New York City on November 3-4.