We’ve covered diversity in the startup community from many angles. From last week’s Google for Entrepreneurs Exchange and Black Wall Street Homecoming to the ongoing conversation about the funding gap and SOAR Triangle’s, we’re covering the evolving identity of North Carolina’s entrepreneurs.
Now, we’re turning our focus to the other side of the table and women investors, from angels to institutional investors to corporate funds.
First, we’ll chat with Christine Primmer, Principal at SJF Ventures, about her work and her path into investing with the bicoastal impact investment firm. Since 1999, SJF has invested in more than 50 companies with a focus on return on investment and impact on the environment, health, education, and energy.
I sat down with Primmer in SJF’s bright offices above Dos Perros in downtown Durham. She had just returned from two weeks on the road, working with companies in Washington, D.C., and joining the conversation on sustainability and profit at SXSW Eco in Austin, TX. Travel is part of how she applies her mechanical engineering and consulting background to the work her portfolio companies are undertaking.
Editor’s Note: I’ve lightly edited her responses for length and clarity.
Q: What is your investment focus?
We embody our tagline of high growth and impact. Our LP’s (limited partners) are interested in venture-grade returns that make the world cleaner, healthier, and smarter.
I look for social and environmental impact in energy, transportation, and industrial innovation. My background is in mechanical engineering, and I worked with GE Energy, then I did consulting in heavy industry, so I concentrate my efforts in these verticals.
*Limited partners are individuals and institutions who entrust money in venture funds as a for-profit investment.
Q: What attracted you to investing and (SJF)?
I had already started the transition to business [from engineering] with management consulting, where I enjoyed working with clients to drive value, but I was not passionate about the industries these clients represented: industries like plastics manufacturing.
Then, I went to business school (Primmer is a Kenan-Flagler Business School alumna) with the intent to find my way into working with companies in industries I was passionate about, companies that promote resource efficiency and clean energy.
I was attracted to UNC’s Center for Sustainable Enterprise coursework and programming. There, I became heavily involved in the Energy Club, thinking through smarter ways to look at existing industries with a significant environmental impact.
VC allows me expand that reach by working with multiple companies at once, so I can share insights and learnings from one to the others, which reminds me of the work I did in consulting. With SJF Ventures, I can do this work in sectors I’m passionate about.
I also love working with growth stage companies. They exude an energy I saw from the inside in consulting, when the company grew from five people to 30 by the time I left. Being in a position to see companies achieve scale is exactly where I like to be.
Q: What was your path to investing?
During business school, I was considering opportunities for internships in a wide range of companies related to energy, from renewables at GE to EnerNOC to SJF. I was very attracted to SJF – it offered me the opportunity to work with the rigor with which I was accustomed in consulting – in industries I cared about.
I remember having lunch downstairs at Dos Perros to talk about the internship with SJF. This was pre third fund, when the team was looking to raise $75 million but didn’t have visibility to that yet. When I asked David [Kirkpatrick, SJF Managing Director] about full time opportunities after the summer, he said there wouldn’t be any.
So, that summer, I worked hard, learned as much as I could while I worked to help close a deal with EnTouch Controls. In the interim, they closed the fund, oversubscribed to $90 million and made plans to hire new staff.
I’d taken a chance on them by taking the internship, and then, I asked them to take a chance on me. At the end of the summer, I accepted an offer to join the team.
It’s funny to reflect on how he said “absolutely not” when I asked about jobs at SJF. It really is a case of the right people, right time combined with taking risks and putting in the work.
Q: What are the most interesting challenges for SJF portfolio companies?
As an engineer by undergraduate training, with more financial experience from consulting and business school, I tend toward rigorous numerical analysis. I had largely disregarded the concept of marketing, or at least the traditional, soft kind of marketing.
I’ve changed my mind recently about how marketing applies to companies in my verticals. We work with companies who are defining new markets. Industrial niches tend to encourage people to be stuck in their ways, and that requires a different perspective on the market. When you’re designing new business models to unlock new benefits, you need someone with a strong knowledge of the market, really strong communication and understanding of the team. I’ve started to think of this as a new role in companies.
I have a whole new appreciation for the concept of marketing and market-making.
Q: What does your deal flow look like, demographic-wise?
We talk a lot about wanting to seek out new sources of dealflow demographically. Right now, our deal flow looks like mostly white men with a few exceptions that come to mind.
SJF made its first investment in a women-led company over the summer, Solera Health. At SJF, we would like to continue to seek out channels for diversity in all of our deal flow and discuss it frequently. We don’t claim to be a leader in this regard, but we have become more intentional about expanding our pipeline. Eighteen months ago, we added a field to our pipeline reporting to begin tracking women and minority-led deal flow.
We seek out relationships with earlier-stage investors that focus on diversity in investments. I just met the women leading True Wealth Ventures in Austin, Texas, who are building a fund around the statistics that show women on boards and in leadership lead to better performance and increased capital efficiency. The funding gap presents an arbitrage opportunity. Frankly, I applaud them, but it’s a tough deal flow strategy for a larger fund like SJF.
For me personally, I would love to break through what I refer to [in jest] as the “blue shirt” phenomena. I sit on three boards, and often look around the boardroom and see that more than 90 percent of the room is wearing a blue or white button down from the men’s department. It becomes visually obvious what studies have found. That women – for one reason or another – tend to be under-represented in the boardroom and management teams, despite reputable studies – from McKinsey and others — that find that companies with more women in leadership roles performed significantly better financially with 41% higher return on equity and 56% better operating results.
Q: What businesses and verticals are you most excited about right now?
In the last year, I’ve been more interested in and excited about the concept of mobility in the transportation space.
I’m not the only one who’s thinking about this concept, either. At the Texas Venture Summit, which isn’t an impact investing event, the leaders all listed transportation as the number one issue facing Austin, which has been named the fastest growing city in the country for the last few years. Uber and Lyft have pulled out of the city because of the fingerprinting policy that the city council passed, so they’re thinking hard about growth and mobility.
We’re overdue for the next order of mobility technology, beyond ride-sourcing like Uber and Lyft, evolving into driving people to public transportation and shared-use mobility. There’s a movement away from single-occupancy vehicles, and I’m still looking for more companies in this space.