For nearly 25 years, Susan Choe has been making trailblazing strides forward in Silicon Valley’s technology scene. A former Yahoo! executive, Choe was previously the founder of media platform Outspark and cofounded tech investment firm Visionnaire Ventures. January 2018 marked the debut of Katalyst Ventures, an early-stage venture fund founded by Choe. The fund invests in tech companies focused on AI solutions, and rising star entrepreneurs on their way to becoming visionaries in their industry.
One of the most unique assets Choe brings to VC is that she’s going it alone. Katalyst Ventures is one of the few funds led by a lone female managing partner. While this might give others pause at the thought of going into venture capital on their own, Choe thrives in the environment. Running a VC firm solo might actually be Choe’s next trailblazing move — inspiring other women to take the reins and do it, too. I spoke with Choe about how she decided to invest in AI, running Katalyst on her own and as a mother, and the one thing that needs to change in the VC space.
Deborah Sweeney: Before you got into venture capital, what was your career background like?
Susan Choe: I have been in the tech industry since 1995. Since then, my experience has ranged from global operator, corporate development investor, M&A executive and founder of a data driven media publishing startup. Dealing with diverse business models, operating context and approaches and collaborating with strategic investors and long term partners has helped me to support these various companies across industries.
Sweeney: Can you share more with me about the type of fund Katalyst is and its investment approach?
Choe: We recognize that all startups take Herculean effort to bring from concept to execution and growth. As an early stage AI fund, Katalyst is particularly attracted to companies and founders solving immediate problems that wreak havoc and have missions focused on elevating the way we live via digital health, fintech, enterprise ops and logistics. Thematically, we focus on founding teams who have a working prototype with a business model to implement within 12 to 18 months. The investment approach asks fundamental questions about whether a prospective portfolio company is evolving the analog business, technology or operations process patterns or trends via AI. Additionally, we have a portfolio that ranges from having women-led/co-founded tech companies and other diverse backgrounds brings a different perspective to how software and services are formulated and run.
Sweeney: What compelled you to invest in AI?
Choe: I founded Katalyst Ventures because I believe in the promise of new technology and I want to help drive the next era of transformative innovation. AI technology and machine learning are already changing people’s lives, boosting productivity and transforming the way we work, shop and communicate.
I believe that my team has a unique opportunity and a special perspective to find game-changing early stage AI startups that have the right technology and the right leadership to become truly exceptional category leaders in their fields. Artificial intelligence has proven potential to bring significant efficiencies and productivity gains that are not just limited to Silicon Valley. Some of the most promising applications for AI can be found in industries like finance, automotive and healthcare.
Sweeney: Prior to Katalyst, you cofounded Visionnaire Ventures and founded Outspark. Were there lessons learned from starting these companies that you brought to Katalyst?
Choe: Outspark is an online media and gaming platform that publishes content on its own platform, allowing users to engage in interactive entertainment through virtual playgrounds. Visionnaire fund focuses on investing in private companies in the mobile, IT and Internet industries, with specializations in big data, IoT, AI and digital health technologies.
Through these endeavors I ultimately learned that when you set clear milestones with an eye towards capacity of your teams, even if you fall short, it helps guide the teams towards a unified goal. Luckily I’ve never had an issue raising money or getting the teams to believe in their abilities. More often than not, taking the capacity of the team into account will deliver results. Milestones must be guided by either fundraising or growth milestones of comparable companies.
Sweeney: What has your experience been like running Katalyst Ventures solo?
Choe: I leverage the expertise of the many industry veterans I know. Owing to my near 25 years in the tech industry, I know many technologists and operators who share their insight and experiences. Many of our committed advisors assist with due diligence, deal sourcing and ongoing support of our companies to add and maximize value. Having partners with many areas of expertise and networks who continue to work in industry segments as operators and mentors has cultivated a rich network of strategic relationships. My experience with traditional partners taught me that a network of experts can add the most value for the time being.
Sweeney: You’re also a mompreneur to a five-year-old daughter. What are your keys to successfully maintaining work/life balance?
Choe: My daughter helps me optimize my schedule. As all working parents know, time is best utilized when managed well. It’s integral to have a reliable support network, and in order to be successful and efficient, there can’t be a single point of failure in that network. Time can’t be managed if any of the pieces are lacking. This is why it is important to plan for hiccups like last minute meetings, sick days and travel issues.
I always have parallel schedules running in my brain and my duties as a parent translate into my life as an investor. It’s a dual universe. Keeping the LPs up to date on developments and milestones, and having reliable colleagues and team members who are at the top of their game assist in keeping me on track.
As a mom, I always have to consider the wellbeing of my daughter and family. I realize that you can’t always have it all at once; this is necessary for your sanity and the sanity of those around you.
Sweeney: Recently, I interviewed the managing partner and partner behind Female Founders Fund. We talked about why it’s difficult for women entrepreneurs to get the funding they need for their businesses. In your opinion, why do you think it’s a challenge for female entrepreneurs to receive startup funding?
Choe: Female founders and entrepreneurs have so much to offer in the tech and VC landscapes. The problem that remains is that proper access to important resources, such as education and mentorship, are not distributed equally to those seeking to bring their ideas to fruition.
The competitiveness in these industries project the idea that there can only be a select few who “make it” in their collective spaces. This needs to change in order for true progress to be made. While there have been efforts to close the blatant gap that exists over the years, there is still much work to be done in order to truly shatter the glass ceiling.
Sweeney: How would you describe the landscape of venture capital in 2019? What kind of progress has been made that is worth celebrating?
Choe: The venture capital scene has always been primarily focused on what company will rule the tech sector in the next few years. It’s taken a shift from a Microsoft-era, to Google-era, to Facebook-era, and now the Amazon-era. In each of these cases, it’s allowing companies to invest in new business lines, conduct major M&A and squash or increase competition where it’s needed, as opposed to years prior.
Looking ahead, there’s an increasingly important focus on the next generation of investors who have larger women cohorts. With this comes the opportunity for female cohorts to grow into managing partner roles and be supportive of one another on their journeys. An environment that embraces family and the balance of work between life partners is necessary for the professional environment to change and progress. This is something we should all be celebrating!
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