Q&A with Lux Capital's Juliet Fern

Updated: Aug 30, 2018

Juliet Fern is an intern at Lux Capital, based in New York. She is also a venture partner at Contrary Capital and co-founder of Miami Venture, an accelerator program for student-run startups. Next summer, she is joining Insight Venture Partners as an analyst.

What attracted you to venture capital and working with startups?

During my freshman year of high school, I created a healthcare startup that aided the waiting room experience in doctor’s offices. Its front-end software component managed internal patient files, appointments, and doctor ratings. The shared consumer application provided an exact ETA of physician availability. This helped ease scheduling for both sides of the healthcare interaction, allowing patients to finish daily errands rather than wait in an office for an indefinite amount of time. But after deployment, I wasn’t sure what came next.

I continued my focus in health tech in college and worked for two startups on the product and operations side. One was called Israel Brain Technologies, a hub for neuroscience startups. I worked as a product researcher and venture consultant to connect founders with investors. At Aidoc, I was a product manager for their artificial intelligence medical diagnostic scans. The company is doing incredibly well this year – they’ve been accepted to Google and Microsoft’s accelerators and they’re expanding across the US, Europe, and the Middle East.

From these experiences I learned that funding enabled growth and product commercialization. The more I learned about venture capital, the more I saw it as a space to survey products in diverse market landscapes. I could meet entrepreneurs in areas like healthcare, surgical robotics, and deep tech, and identify smart solutions to nontrivial problems.

I’ve heard of people launching startups in college but I’m impressed to hear that you started a company in high school. What inspired you to do that and what challenges did you run into?

I definitely got my entrepreneurial background from my family. My father is the kind of person who creates contraptions for the smallest problems. He’s a doctor as well as the founder of KleenGel. It’s a medical device that can be deployed by obstetricians, gynecologists, cardiologists, and gastroenterologists. Even now, I help him pitch it to investors. I think building products and solving challenges is something we both have in common.

Because he was a doctor, I had to sit in waiting rooms just to see him. That bothered me but I was just a kid who wanted special treatment… I recognized that long waiting periods materially affected busy people who have children and careers. My father told me that they didn’t have a system to improve that part of the patient experience. Because I was into data and computer science, I decided that I could probably build a solution myself.

I started competing in venture competitions, receiving advice and recognition. I pushed forward – gathered data, built a team, surveyed patients and doctors, and found market price points for healthcare software. People really liked the product and the cost. As I continued to expand my startup, I reached high demand in a space where there were few suppliers.

Creating a company was a crash course in entrepreneurship. It has provided me with a foundation for advising other startups and knowing how to qualitatively assess founders/companies.

Do you think being a founder has given you a unique intuition for evaluating companies?

Absolutely. People typically have two philosophies around the kind of background you should have for vc: people either believe you need a lot of operating experience or that you need to come from a hard finance background to be a successful investor. I think being a founder bridges both the operational and miscellaneous.

As a former founder, I have a better ability to help position a company from seed to series B since I know the technology, market, and managerial risks associated with pre-market stages. I can offer structured advice to triage and overcome obstacles.

What in particular attracted you to Lux Capital?

I was attracted to Lux’s founders, technologies, and portfolio strategies. Lux focuses on seed to series B investments (which I find to be my sweet spot). They invest in moonshot, sci-fi technologies – anything from autonomous vehicles to 3D printing with artificial intelligence. They invest in products that will transform what humans can achieve. Given my background in health tech, I saw interning at Lux as a unique opportunity to deploy my skills in deep technology. Now I’m going into my junior year of college after spending the summer as one of Lux’s first non-MBA intern.

In particular, Lux is a leading investor in categories that interest me. I’m fascinated by the possibilities of AI in drug discovery and they’ve funded Recursion, a company that automates experimental biology at scale by using AI to test thousands of compounds on hundreds of cellular disease models. They’ve also invested in Blockstack, which privatizes data using blockchain. These investments show the breadth and depth of Lux’s portfolio. Quite simply, they move away from the static while still creating the right noise.

A few partners at Lux have PhDs. Does that help Lux better evaluate companies and identify investment opportunities?

Almost every partner at Lux has a PhD in a niche space. For example, one partner has a PhD in molecular biology. He actually knows how genomes function and how to assess operative databases; it unquestionably gives us an edge and attracts founders who want expertise for their genomics startups.

Other partners have PhDs in advanced materials, computer science, and artificial intelligence. This isn’t the kind of knowledge you can offer as a generalist investor. You definitely don’t need a technical PhD to successfully fund the next big consumer product but for startups with technically complex products, our partners contribute value as specialists.

Lux is a fantastic place to work because innovation is created inside and outside the firm. Almost every partner has bootstrapped their own company; some of them are currently creating companies on the side. They don’t let any stage of risk halt their vision. If they see a problem, they’ll take it upon themselves to build a solution.

Have you faced any challenges as an intern?

I haven’t encountered any problems. Lux has given me a lot of freedom in terms of research and deal flow. They’ve encouraged me to offer my opinion even if it’s contrarian. I think that’s how you become a real asset: by thinking differently and backing up those opinions. In other fields, I think success can come from following the leader. Venture isn’t like that at all – you should tell partners and founders what they need to hear, not what they want to hear.

After college, do you see yourself staying in Florida and building the venture community there?

Miami is an interesting case. It’s definitely a growing ecosystem, but it’s not anywhere close to New York, Tel Aviv, or Silicon Valley.

After my time at Magma, I launched an accelerator at the University of Miami. We have an existing but limited campus resource, The Launch Pad. It only helps budding entrepreneurs ideate without assisting product development and access to funding. I was determined to fill that gap with Miami Venture. I gathered my first cohort of startups from various programs ranging from Miami's selective grad institutes to engineering design classes. I connected these student-run startups to more than 30 investors and founders. At the end of the semester, I created a shark tank competition called TAMID Tank with a grand prize of $20,000. It gave the founders an opportunity to pitch in front of investors and an audience of 500+.

I led the accelerator and competition myself, which was interesting because I didn’t have prior connections to the Miami startup world. I was emailing and calling hundreds of founders and vcs. Even if I never heard back, I persistently reached out. I also had to balance my sophomore year classwork while onboarding startups, messaging investors, and operating the program. While this was massively challenging, I saw a need for an accelerator and knew it would create value for young entrepreneurs and the Miami venture community.

I’ve already seen ways that the accelerator has impacted Miami. Startups come to me for operational support and dynamic connections. I've sourced startups from my accelerator for Contrary Capital, a student-run venture fund where I am a partner. I also became a member of the Miami Venture Capital Association. It’s important to me, as an investor, to be at the center of Miami’s investment and emerging tech organizations.

Rough Draft, Dorm Room, Crimson Ventures, and Contrary Capital focus on student entrepreneurship. What do these types of programs offer?

As I mentioned earlier, I am a venture partner at Contrary Capital, which competes with funds like Rough Draft and Dorm Room. We invest in about 30 companies a year. But unlike those other programs, we’re not affiliated with a higher venture capital firm in the way that Dorm Room is part of First Round. Receiving funding from Rough Draft and Dorm Room Fund can lead to mixed consequences. Other vcs might not want to invest if there isn’t a follow-up investment from those higher funds. They’ll wonder why that fund is choosing not to financially support the company again.

I’m inspired by Eric Tarczynski, founder of Contrary Capital, and the network he has built for the fund. He is one of the biggest self-starters you’ll ever meet. He spent two years just creating connections with managing partners at leading vc firms to give Contrary its competitive edge: our summer accelerator program and demo day. The accelerator program in San Francisco assists Contrary’s portfolio companies with growth by partnering them with mentors from startups, Fortune 500 companies, and venture firms. Some mentors have included Facebook co-founders and SVB partners. After the accelerator, the startups can seek follow-up funding at a demo day attended only by managing partners. This direct access to the partners who cut checks is unparalleled at other student venture funds.

We typically invest 50K-250K in the pre-seed stage through a convertible note with a 20% discount and cap. Other programs either price the round, have follow up capital linked (misleading), or don’t have a wide mentor network. Contrary is the best intersection between sufficient funding and growth.

How was working in Israel a solid foundation for the being an investor in the US?

Some of the most brilliant founders and startups come from Israel. With mandatory military service, much of Israel’s entrepreneurial spirit comes from discipline learned during time in the army. There are even units that focus on building military products and security technologies. It’s an environment that teaches persistence: if you create something that fails, start again and understand that failure can help you adapt your product for a different technology or market. It’s no surprise that Israel has the most startups per capita than anywhere in the world. The culture is different in the U.S. When startups fail, people often return to uninspiring corporate jobs.

Israel has also built legitimacy in deep tech, which enables pattern matching for creators and investors. Magma Venture Partners is a good example. Magma invested in Waze (acq. by Google) and Applitools (a dev-ops test automation platform used by Salesforce, Mastercard, Cisco, Wix and many other companies). They also funded Innoviz Technologies which is a top LIDAR sensor in the competitive autonomous driving space. Magma successfully identified these groundbreaking technical products, even though they span hardware, software, and mobile.

In Israel, if you want something you go for it. And I think the partners at Magma and Lux saw that attitude in me even at 19-years-old.

Now that you’ve worked at a few startups and venture firms, are there any investment areas that you’d like to focus on?

I will definitely continue focusing in healthcare especially around genomics. Another interesting area is creative AI in drawing, music, and generative design. I’m also tunneling into natural language processing (NLP). I recently surveyed utilization dealflow in a paper I wrote on NLP deployment in healthcare, big data, automobiles, and customer service sentiment analysis. At Lux, I was able to conduct market research and create my own investment theses in these unique spaces. I plan on refining these theses as I continue my vc career.

Any advice for young women who want to enter venture capital - on the investing, operations, or platform side?

Don’t give up. There will be obstacles that will discourage you along the way. For example, you’ll notice that there aren’t many women at firms you’re interested in or maybe they only recruit people from one school. Perhaps these firms don’t hire interns. That doesn’t mean you can’t be the first female intern or analyst. That doesn’t mean you can’t be the one to break the status quo. If you want something, you have to pursue it actionably not just in thought. Reach out even if you think they won’t respond. Venture is about relationships – and if you can create connections from scratch, you’re halfway to proving you have the skills for vc.