Q&A with FJ Labs' Kelly Anne Tully

Kelly Anne Tully is an investor and platform leader at FJ Labs, based in New York City. Prior to FJ, she worked at Bloomberg Philanthropies and in the Bloomberg Mayoral Administration.

What attracted you to venture capital and working with startups?

I think of venture as intellectual investing. It marries strategy and finance and forces you to think about the big picture.

I decided to get my MBA at Columbia after four years in the Bloomberg orbit - first at City Hall and then at Bloomberg Philanthropies. I knew I wanted to move into the private sector after being in public and non-profit and had begun to think of venture somewhat in parallel to my work at Bloomberg Philanthropies.

In philanthropy, you have a pool of money that you want to give to smart people, solving tough problems in new and innovative ways. At Bloomberg Philanthropies, we also worked to hold the organizations accountable to their data and metrics, the same way you would in VC. Of course, we didn’t care about the financial return but the strategic and emotional intelligence skills are similar in both.

I went full force into recruiting for a venture capital internship during my summer between first and second years at CBS. I took interesting classes to help improve my frameworks around investing and joined the CBS Venture Fellows program where I presented a thesis on trucking logistics tech.

Is the CBS Venture Fellows program like Insite?

Insite is at Columbia but focuses on consulting for startups. CBS Venture Fellows puts you in the shoes of an investor. You get immersed in a space and frame a full investment thesis: what does the industry look like, what are the incumbent and innovative companies in this area, where are the opportunities for disruption, and how would you evaluate a startup in this space?

Why FJ Labs?

I was fortunate that Columbia is in the NYC hub. Investors regularly came to speak on campus, including Fabrice Grinda (FJ’s co-founder). He was incredibly impressive. During his talk, he demonstrated a quality that shines through across the entire FJ team - intellectual stamina. It takes work to questions your assumptions about how the world should and will work in the future. Fabrice and FJ’s other co-founder Jose Marin have seen a tremendous shift in marketplaces, their own area of expertise. Marketplaces appear in many forms, from horizontal to vertical to managed and supply-pick. It takes flexibility and humility to see how the world will change, and how you need to adapt, even if several of your companies are thriving in this particular moment.

Founded by two serial entrepreneurs, FJ Labs also has a very unique approach to investing. We don’t lead and we don’t take board seats. Our average investment cycle is roughly two weeks. Our pace is outrageous at an average 1.5 committed deals/week. That doesn’t make sense for every fund but as a newbie to VC, it’s been like drinking kool-aid out of a fire hose.

FJ also cultivates an entrepreneurial environment because we don’t just invest, we’re incubating startups and hiring EIRs. Twice a year we get together and spend an entire day pitching our wackiest and best business ideas. We debate the merits and then vote on the most viable. The ideas vary widely from a company FJ incubated called Merlin, which is a blue-collared jobs marketplace, to an entirely new religion.

What was the recruitment and hiring process like for you?

FJ Labs has a pretty intense interview and hiring process each year. Each year we recruit 2-4 MBA Associates from business schools including Columbia, Harvard, MIT and Stanford to join our investment team or to become full-time EIRs upon graduation. The recruiting process involved interviews, a startup pitch to the full-time team, and a final round with Fabrice and Jose. I was impressed that they clearly valued cultural fit and intellectual curiosity over pure experience. You can teach someone industry multiples, but you can’t teach someone to be curious. I’ve since helped recruit the new class of associates. I’m so impressed with their desire to learn, ask questions, and drawn upon their own experiences.

What skills did you bring to this position from roles in NYC public policy and philanthropy at Bloomberg?

I mentioned the similarities between venture and philanthropy but from a skill perspective, I think it’s a combination of diligence and trust. Not overthinking everything that could go wrong and trusting that your partners and team to get something over the finish line.

There’s a reason that NYC’s venture and startup community has flourished in the past decade, and frankly it has a lot to do with the Bloomberg Administration. We took steps to make sure New York would be a diverse metropolis, an ideal place to live, work and play. It’s hard to not be inspired when you’re living and working here.

You straddle a platform and investor role. What does your average day end up looking like?

I spend about 30% of my time investing and the rest on platform. I try to keep investing calls to Mondays and half Tuesdays (we have our investment calls on Tuesdays). Throughout the week, I review my assigned deal flow and schedule meetings - we really try to have quick turnaround with our entrepreneurs.

The rest of the week I work on a mixture of our portfolio offerings, thinking through fund communications, checking in with entrepreneurs for updates and resource conversations, and meeting other people in the platform community. I enjoy learning how other VCs structure their platforms based on their own core competencies, portfolio characteristics, and fund goals. Do they have $1B AUM? A 10-person team? Are they taking board seats? We have a six-person investment team and 1 platform person. I’m constantly thinking about ways to scale platform and make it self-servicing.

We also play foosball every day after lunch. I’m very much a work in progress.

How have you curated FJ Lab's platform services to serve your global portfolio?

FJ has historically and intentionally been pretty hands off with our portfolio companies. That was an intentional choice. But with 311 active portfolio companies, we realized we have a unique opportunity to leverage the lessons we’ve learned as operators and investors and from our entrepreneurs. I was part-time during my second year at CBS and put a deck together and pitched the team on becoming Head of Platform.

Since starting full-time in June, I’ve spent a lot of time thinking about all the different ways we can slice this portfolio - from stage, size, location, industry, business model, etc. Our portfolio is so big that the combinations are endless. At our core, we want to focus on how to help our portfolio companies get back to doing what they do best – running and growing a business – so we focus our strategy on helping them make faster decisions like around resources and KPIs and assisting in fundraising – an important but considerably time-consuming part of a business.

You're a Blue Devil! How do you tap into Duke's venture and startup community for potential investments and partnerships?

People who went to Duke bleed blue. Whenever I see a Blue Devil on the venture side or in the founder community, I’m always impressed by their willingness to collaborate and take a meeting. It’s instant camaraderie. When I think about my time at Duke, the tech and entrepreneurship scene was certainly growing. I was in a student-run business. Today, I think we’re approaching the day when the Research Triangle becomes the next great Austin!

FJ Labs invests in everything from marketplaces and consumer products to frontier and fintech. What kind of input / power do you have in partner meetings on investment decisions?

Honestly, I love the pace of FJ investments. I think we’re a good mix of thesis-driven and opportunistic investing. We continue to be really bullish on the verticalization of marketplaces - companies that take pieces of Craiglist or Upwork and build them into marketplaces you wouldn’t expect would to be massive (like our used musical instrument marketplace, Reverb).

It’s exciting to see market expansions. I think that’s also a consistent theme in our investments. For instance, this summer I led our investment in a D2C, lab-grown diamond engagement ring startup. We’re betting on a new piece of the antiquated diamond industry.

FJ is a really equal environment. The whole investment team including our MBA associates and EIRs are expected to join and give input in our investment meetings. We each lead our own subset of deals. We push each other to think from new angles and questions assumptions. The tone for participation is really set by our partners, Fabrice and Jose, who encourage this equal investment decision framework. I look forward to the debates we have each week in the investment call.

What kind of guidance and support do you receive from other (female) VCs? How do you build an inclusive community at FJ Labs and beyond?

The nature of venture is pretty competitive but I find genuine collaboration amongst the women in VC. I’ve been invited to female investor-only events, accessed resources to be a better negotiator, etc.

The platform community in particular is focused on inclusivity. We all know that women make up a tiny percentage of partnerships and funding. I think the platform community can do a lot to improve investing in women and supporting them.

Have you faced major challenges as a woman in venture?

Like all new jobs, it takes time to feel like you belong. When I think back to my time as an intern last summer, I’m amazed by how much more I recognize. This seems small but I know more people at events and happy hours. But there’s always that lingering feeling… Do I know enough, am I connected enough? Patience is not my strong suit but being in platform has also opened my eyes to the fact I have control over who I am at FJ and how to create a diversified network for myself and the fund.

What advice would you give to young women who want to enter VC - on the investing, operations, or platform side?

A lot of people told me that I wouldn’t make it into VC with my non-traditional background. So my first piece of advice is never to doubt yourself. Read a lot. Become knowledgeable in a certain area of interest (particularly if it’s a hot topic). Ask for a lot of help (a lot of people at CBS helped me do mock interviews and I pay it forward). And when you’re ready to interview, know the portfolio and have an opinion (on what’s bad, what’s good) and stick to it.