North Carolina welcomed famous venture capitalist and ABC
“Shark” Chris Sacca
with meat sweats, an inspiring transgender coder and a room full of entrepreneurs hungry to hear his experience funding and guiding high-growth tech companies.
The lawyer turned-Google director-turned venture capitalist is proprietor of Lowercase Capital, a California fund with a portfolio of 80 startups including some of the biggest names in technology. So, when he agreed to a fireside chat Monday with HQ Raleigh co-founder and entrepreneur Brooks Bell, dozens of local innovators flocked to CAM Raleigh to take part.
Sacca greeted the audience by joking about his “rib sweats” from a big lunch at The Pit. He also gave a shout-out to the transgender coder he met during lunch, who he called brave in the face of NC’s new, controversial House Bill 2. The room broke out into applause.
But most of his time was spent letting entrepreneurs in on his unique, but successful, model of venture investing. Here are four big takeaways:
The Founder’s Spirit
Sacca had a modest upbringing and his fair share of failure before finding Silicon Valley success. One of his most formative moments came during a difficult dilemma upon graduating from Georgetown Law in 2000. After using his student loans to start a company that ultimately failed, he found himself with a great amount of debt. Because he never considered quitting as an option, he fought his way out of the situation. He worked at a corporate law firm by day and took odd jobs by night, including writing terms and conditions for websites and recording a voiceover for a book.
This time was pivotal because he learned something about himself—what set him apart from others was his skill of figuring out how to get through difficult times.
He looks for this same quality in entrepreneurs. Lowercase Capital seeks founders who’ve worked terrible jobs and made something good out of them, who’ve lived or traveled abroad to see other cultures and who realize how lucky we are in the U.S. That kind of flexibility and resiliency puts an idea into action.
Founders’ confidence in their ideas is also what leads them to success. He recalls Instagram co-founder Kevin Systrom casually saying in the planning stages of the startup that it will get to 50 million users. And Uber founder Travis Kalanick wanted to go global (to Paris) after he'd only launched the company in two U.S. cities. He knew it would be difficult, but he aimed for it anyway.
Sacca advises entrepreneurs to “do a gut check” in order to see whether or not you have to convince yourself and others about the idea or if you just “know in your bones it’ll work.”
“Not everyone is a founder and there’s a time when you have to admit that to yourself,” he says.
One thing Sacca doesn’t subscribe to is the “fake it ‘till you make it” mentality. Vulnerability often turns into opportunity, he believes. He gave an example:
While he was working at Google, there was a tradition in meetings where someone would take notes and make them available to anyone in the company who was interested in the subject matter.
At a meeting for a project one day, a notetaker wrote, “Chris doesn’t know what he’s doing.”
At the next meeting, there were six new people there to help, including Google co-founder Larry Page.
Sacca realized there's power in admitting you need help. And now, he has a code that extends to all his organizations which he calls “bold humility.”
That’s defined as knowing your skills, but also recognizing that you aren’t the best at everything. It's an acknowledgement that reaching out for help will be rewarding.
“When you ask them for that, when you express that and show that openness for someone to help and bring something to the table, they feel great, valued and acknowledged and part of it,” he explains. “It’s what gets people to stay late, to work for free and to think about you when they’re not at work and keep hustling all through the weekend and all the time; It’s what makes people feel like owners.”
Sacca says his career shifted and accelerated when he realized it was okay to be vulnerable.
Vulnerability has contributed a lot toward Sacca’s belief in the importance of authenticity in business. Bell pointed out that Sacca does a lot for people without accepting anything in return.
It comes down to getting to know people, Sacca explains. He and his wife made a big decision several years ago. They left San Francisco, where most days were spent listening to people’s not-so-great ideas over coffee, and bought a house in the woods of Truckee, Calif. Instead of coffees and networking events, he invited entrepreneurs with viable ideas to come visit their home for beer, outdoor activities and conversation. Through running this retreat for entrepreneurs, he got to know whether or not people were worth working with.
There's a pattern with his investments—they were all established when both parties asked, “What can I do for you?”
Another example of authenticity is embracing your own quirkiness. In a Reno airport on his way to a speech, he impulsively bought an embroidered cowboy shirt and wore it to the event. He said no one took him seriously and he had to earn their attention by being himself. He's worn those shirts most days since.
Being authentic, he believes, also gives him the freedom to be vocal about things he previously feared would offend people. Like posting a photo of a North Carolina urinal on Twitter with the tweet, "First bathroom in North Carolina and no one was there to check my junk. Kind of a letdown."
Sacca regularly uses Twitter as a megaphone for his activism, and he's now a member of the company's board. “My Twitter mentions are a hell hole,” he says, adding that he’s become an enemy of the men’s rights movement.
Resistance to diversity seems to be common among venture capitalists, and that doesn't make sense to Sacca. Embracing diverse founders and ideas is paying off for his portfolio.
His wife and business partner Crystal English recently put $50,000 into StyleSeat, an online platform for beauty and wellness professionals to share their work and connect with new and current clients to grow their businesses. The website empowers stylists to work out of their own homes without being tied to a salon, and it's doing well.
But when English and Sacca went to other Silicon Valley venture capitalists to invest in a later round, but they turned it down. Sacca says a bunch of men wearing blue blazers and khaki pants can’t get excited about a digital salon network because they pay $19.50 for their haircuts.
“Women and people of color have diverse perspectives on audiences with huge spending power,” he says, “but the traditional hierarchy doesn’t have anything for them.”
Sacca also brought up Black Twitter, an engaging virtual community raising awareness about the issues black people face through hashtags and memes. Oddly enough, there is no black representation on Twitter’s executive board.
Sacca has struggled a bit to find a way to change the paradigm—he admits his portfolio has yet to have a black founder.
But he's trying to change that by backing venture capital funds run by women and minorities. He's made seven investments so far, with the theory that these funds understand founders like them and markets they serve better than he does.
Sacca stresses that you can’t know what you’re building if you don’t work with a diverse group of people. He left the audience with this:
“You can’t push the envelope if you surround yourself with people who look and talk like you.”