When Vanessa Pestritto (Stern '07) and Brittany Laughlin (Stern '07) met during their undergraduate studies at the NYU Stern School of Business 11+ years ago, the two didn't know they were going to embark on a journey of venture investing and go on to found Lattice Ventures together.
Vanessa, the former Executive Director of the New York Angels and Brittany, the former General Manager of the Union Square Ventures (USV) Network, bumped into each other in January 2014 through their respective roles and were excited to learn that there were other young women interested in investing. They decided they had to know each other and connect more deeply on the cause. And the rest is HERstory.
The two of them began their working relationship by hosting a breakfast series for founders and for over 18 months, hosted a monthly meeting of the Gladiators Club, a place for founders to meet each other, share resources, and offer peer-to-peer mentoring for the group. This was an opportunity for them to assess their working relationship and learn each other's views of the world, and how they envision the future of investing. They concluded their respective roles and launched Lattice Ventures in April 2016, then started a fund in December 2016.
One ideology that is integral to Lattice Ventures is the premise of the network effect and how it impacts their firm, the companies they invest in and the people they want to do business with. "Network effects for defensibility," Vanessa explained, is a key phrase to think about when approaching Lattice. This ideology has helped Lattice make 11 investments in the last 15 months with check sizes between $50,000 - $100,000 per company.
I spoke with Vanessa and Brittany recently, and they had some great tips to share on how to pitch Lattice, ways female entrepreneurs can navigate the startup world, and how best to tackle inevitable challenges.
Desiree Frieson, NYU Entrepreneurial Institute: How do you describe "network effects" and its importance to Lattice Ventures?
Vanessa: The product or service should improve with every new user. This can be done in multiple ways: 1) Provide more data to the network and the network gets smarter and can make better recommendations, or 2) create better services for the people in the network. Another way is to bring existing networks into a product or service, and if those inner networks have outer networks that have other nodes, those can create networks and the product or service is becoming more valuable. Those are different ways we think about it.
Desiree: Can you tell us how female entrepreneurs can effectively use their own networks in their startups?
Vanessa: I understand that people's time is very valuable and if I'm going to be reaching out to people for an ask, or if I want to learn more about anything, I generally try to make an offer while I'm making an ask as well. I also provide some context to how I remember our relationship and our connections so it's more personal. If I don't have anything personal to offer, I will go after some form of curiosity to engage in a conversation depending on the person or the role.
Brittany: It's always surprising how men never have any hesitation about reaching out to people they know to get advice or to ask questions. Probably 95% of the cold emails or LinkedIn requests I get are from men. Cold emailing has a small success rate but probably more women should be doing it even if you don't know someone, because you never know what could happen. If people have an ask when they're reaching out I think it makes it a lot easier to say yes. Being very specific in an ask is being mindful of a person's time.
To Vanessa's point, networking, in general, is a give and take. It's a balance between providing input on where you can, and if you have no value to add in the beginning, that's okay. Maybe after multiple meetings, you might acquire valuable insights for the next person you meet. The dynamic quickly changes as you become connected and build a network.
We're also huge advocates of J. Kelly Hoey's book Build Your Dream Network: Forging Powerful Relationships in a Hyper-Connected World. If people want to go more specific in those ideas, she's done a great job on giving actual insights on how to do that. We love Kelly. I think she's clearly the master.
Desiree: When you think about women in startups or in the workplace, what do you think are the top challenges we still need to overcome and what strategies can we use to do that?
Vanessa: One recent observation was around just getting to market, not necessarily with a product but with working on whatever it is you're working on faster. There are many people that want to be helpful so long as you're showing some value or momentum on whatever it is that you're working on. It really has to do with the context of where you are. For instance, if someone is in an accelerator and there are resources that can be helpful to you, then utilizing those resources—and being mindful and efficient with them—are incredibly important.
But on the flip side, some female founders overly prepare to utilize those resources, when really they should just be going to the resources and saying "here's where I am, here's what I'm doing, here's what I'm thinking of doing next." Especially if there is consistent availability of those resources, such as office hours, mentorship or whatever the case may be. There's a need to find a balance between being prepared and going for the resources.
Brittany: I agree. Be prepared to not know everything and have open questions is the mindset of an entrepreneur. In building past businesses myself and then in venture capital, there's always going to be something you don't know and it's very common. Especially for very driven, ambitious and motivated women, they don't want to have a lot of it figured out before they get started or talk about something publicly. I think that hesitation can sometimes be prolonged much longer than it should be.
We've also seen a lot of entrepreneurs, especially female entrepreneurs, in industries that are traditionally female-focused, which is not a downside, I think that's a great thing, but if you're pitching to or selling to people who do not completely understand that market, it's important to educate them. Really laying out and not being afraid of going into detail and educate people around you, and not assuming they know what you know. That can work for female-focused enterprises or it can be something really complicated like shipping logistics that have no real attached gender but if you walk-in and assume each investor knows it's a big opportunity, or know there's a big gap in where the technology is, they won't get it unless you educate them. Any entrepreneur has to do this but especially women in an industry they know well but perhaps other people may not.
Desiree: How could entrepreneurs stay motivated when they're getting ready to start up?
Brittany: Setting milestones that are time-based and can be revisited is important. Challenge your own perceptions. Continue to test your hypotheses. Use these mechanisms to stay focused and try to boil the ocean. Even big companies have to focus.
Vanessa: [For the NYU Entrepreneurial Institute] I would ask the mentors how they can be helpful to women entrepreneurs and make sure the Leslie eLab pairs teams with the best mentor(s) to see how they can maximize their learning.
Desiree: What types of industries, sectors or companies does Lattice Ventures fund?
Vanessa: We generally invest in the "future of work," blockchain technologies, infrastructure projects, developer tools, and fintech.
Desiree: At what stage does Lattice Ventures invest and what locations?
Vanessa: We invest between $50,000 - $100,000, with an average investment being $50,000. We invest as early as pre-seed up to series A. We invest in U.S. based entities, more so the East Coast.
Desiree: How do you like to be pitched?
Vanessa: Working with companies that fit our ideologies and values is always a win for us. People can send over a blurb and a deck and we will get back to them pretty quickly if it's a fit for us or not, or if we would like to learn more. If we're interested we will proceed with a call because we are mindful of the entrepreneur's time and want to make sure there is enough interest before we proceed.
Desiree: What is your timeline to actually make an investment?
Vanessa: Investing is collaborative with other funds in New York, other angels, or even the entrepreneur's own network. It depends on when the round is coming together. For us to have conviction, we will try to do our best to get "due diligence" checks out in two weeks.
Desiree: Can you explain "due diligence" in very few terms?
Vanessa: The team we're investing in has to meet criteria of what we believe is required to go after the product or service or market they're going after. We have to be analytical around the team, product, go-to-market execution, financials, and we want to see that customers are showing interest in what they're building. We make investments on companies that can validate their market opportunity and actually have a path for owning a good piece of the market. We also want to believe that our investment can raise future capital and attract talent.
- Network. Don't be afraid to reach out to someone in or out of your network. Come prepared with an ask, valuable insights to share or something to offer, remember everyone's time is valuable. Be strategic and efficient in your ask. If none of those tactics work, keep trying. Get comfortable with being uncomfortable.
- Leverage resources. Take advantage of the resources you have available at your fingertips and don't wait to be prepared to use them. Find a balance between being prepared and just going for it.
- Startup quickly. Pursue what you're working on without hesitation. Rely on help and feedback but prioritize the most important jobs to be done, and go for it.
- Peer-to-peer community. Get together with a group of founders and share recent wins, challenges, and lessons learned, as this provides a support network to help build confidence and stay motivated.
If you're an NYU entrepreneur interested in receiving mentorship and coaching on your startup, you can book a coaching session with one of our Blackstone LaunchPad mentors!
About Lattice Ventures
Lattice invests in entrepreneurs who personally understand the problems they plan to solve. Building a lasting business requires a big vision, backed by strong skills and insights and a rooted passion in the outcome is key. We believe that connections to experienced operators, peers and industry experts at the right time can dramatically accelerate company growth. We believe in funding the best and accelerating our portfolio with the right networks. We believe there are a diversity of needs that are not currently served by technology. We invest in companies pursuing industries hungry for innovation with technologies that are defensible via network effects.