Q&A with Backstage Capital's Lolita Taub

Lolita Taub is Backstage Capital’s Principal for the “It’s About Damn Time” Fund, a fund which is focused on investing in Black women-founded startups. Her prior early-stage tech investing experience includes Portfolia and K Fund. Before joining the VC world, Lolita spent nearly a decade in B2B enterprise tech, consulting and selling solutions to Fortune 500 companies at IBM, Cisco Systems, and Silicon Valley and NYC startups.

What attracted you to venture capital and working with startups, specifically at Backstage?

It all started with Rosie the Robot on the Jetsons. I picked up feminism and a love for tech from that robot. And when it came time to join the working world 10 years ago, I joined the tech world. As a professional in tech, I came to appreciate that technology is so powerful that it can help address human challenges and limitations at unprecedented levels, and I knew I wanted to push tech innovation forward. At first, I figured I could do that through my consulting and operational roles at tech corporates and startups, but that didn’t feel like it was enough. Then, one day, one of my good friends invited me to a venture summit. It was there where I first learned that there are people who work as venture capitalists and spend their lives pushing tech forward. Since then, I knew I wanted to be a venture capitalist, and although it took some time, I became one. And I’m living my best life, because as Principal of Backstage’s “It’s About Damn Time Fund” I get to invest in the future of tech and leadership!

You've built your career in enterprise tech across data analytics, cloud, IoT, and security (to name a few). How did your work selling these solutions at IBM and Cisco translate to startup sales at Blockdaemon and Glassbreakers?

At IBM and Cisco, I got to work with global experts in just about every industry and in every tech (current and futuristic) which helped me become a generalist with a successful track record. I’d say that the most important skills I gained from this part of my career involved learning how to:

  • Think like a visionary (reimagine the future of the world and tech)

  • Think strategically and consistently ask myself: how can I use technology (e.g., software, hardware) as a tool to achieve business goals or address challenges of my customers? And how do I close deals?

  • Work with and leverage a pool of remote talent (e.g., establishing a culture of setting clear expectations, transparency, respect)

All three elements came handy when transitioning into startups with big visions, remote teams, and an eye on the money.

From Portfolia and K Fund, what are some best practices that you've brought to Backstage?

It wasn’t so much Portfolia as it was Trish Costello that taught me the need to constantly question the way traditional venture capital works. She reframed the venture capital business model and developed a new approach to it - one that involves the sophistication of a traditional venture capital fund but provides the community feel of an angel group. Ever since Portfolia, I find myself asking myself, what’s the best way of running a venture capital fund?

At K Fund, Managing Partner, Iñaki Arrola taught me about the importance of team diversity - in particular, diversity of thought. Iñaki always encouraged the team to share their thoughts, whether they conflicted with his own or not. It’s essential to have dissimilar perspective in a fund. That’s where all the best critical thinking happens.

And now at Backstage, I find myself expressing and encouraging dissenting perspectives, while at the same time prompting the team to think about the best ways of running the fund. For example, one of my pet projects became strategizing over and implementing a CRM system that not only serves deal flow purposes but also helps manage all other people-related initiatives in one place.

When you're evaluating a startup, what are the most important factors that you look for in a strong prospective investment?

The characteristics I look for and the process I use in assessing companies is similar to what I used when deciding to marry my husband, Josh. Let me unpack that for you.

At first, I had an inkling that I was into Josh. So, when he approached me I said yes to a date. There was chemistry, and I found him to be scrappy (he likes to maximize his time, money, and resources), a hustler (never letting up on his goals), and gritty (he did not let past traumatic experiences affect his present). We gave the relationship time and I started to see that we could potentially make each others’ lives so much better. And, then my mom liked him because, “he is such a good man and a potential good role-model to [my] siblings.”

Yeah. Josh was a good family fit (my mom hated all other previous boyfriends). Josh, also, felt that I was a good fit for him, too. Eventually (about a year and a half after first meeting), we started talking about closing the deal - getting married. We exchanged health reports and bank statements (I trusted his financial prowess but I wanted to verify it). Everything checked out for the two of us, and we decided that it was a good idea to sign a marriage contract. No prenup clause. It’s been 5 years since we got married - and we’re still glad we did. So far, the returns have been outsized.

Did you pick up on what would be the qualitative criteria that would translate into startup evaluation? I bullet point them below in the form of questions:

  • Is there a good chemistry fit? Do they get me excited about their business? Would I like to work with this person when things are good and when the shit hits the fan?

  • Are they the scrappy and gritty hustler types? Do I believe that they can: do more with less? Not be phased by adversity and persist in the ups and downs of business?

  • Is there goal alignment? Do they have a dream of building a great company alongside us and then having a huge exit or do they want to have a lifestyle business?

  • Is there trust and respect going both ways?

  • Would the team make the life of the rest of the portfolio family better?

  • Do their docs check out in diligence?

  • From what I know, will they be good with money? Will they turn every $1 I invest into $10 dollars?

Not only does Backstage focus on underrepresented founders, the firm is also market agnostic. Other than enterprise, what sectors/spaces do you think are exciting and ripe for investment?

If you bring it back to the basic definition and goal of venture capital, you’ll find that the best businesses to invest in are the ones that are high-risk, and the ones that are likely to multiply the fund’s investment tenfold. With that in mind, for me it’s less about identifying exciting and ripe investment sectors and spaces, and it’s all about identifying startups that are reframing real problems in a new way, coming up with uniquely differentiated solutions for which a billion dollar market full of customers are ready to pay for (consistently and sustainably).

That said, I do have a keen interest in following and promoting AI B2B Enterprise applications.

In 2015, you founded The F Show (acq. by SoGal) where you interviewed female entrepreneurs from around the world. What drove you to start The F Show? What are the ways The F Show has been helpful for you at Backstage?

You’ll have to watch my first TEDx talk to hear the story that drove me to quit my 6-figure figure tech job to launch The F Show.

In terms of The F Show, I’d say that having founded and launched my own startup and interviewing 100 female millennial entrepreneurs from over 20 countries definitely helped:

  • Develop my empathy towards underrepresented founders (the struggle is real)

  • Give me access to global startup and supporting ecosystem networks

  • Teach me that diverse founders are underestimated and that leads to better prices for investors

So, thanks to The F Show, I’m able to bring a lot to Backstage - access, empathy, and a keen understanding of the economics of investing in our target market.

You attended Phillips Academy for high school, USC for undergrad and received an MBA at the IE Business School in Europe. You're also an avid traveler. Why is an international background and outlook important to you as an investor?

I’m grateful that, from high school to grad school, life found a way to put me right in the middle of a rich and diverse global community. I’ll admit that, at first, it was strange to learn of different customs (e.g., arranged marriages, circumcision, eating tarantulas, drinking horse milk). But, I am all the better for it, because it was the continuous discomfort that I felt that stretched my mind to think beyond the constructs of my upbringing, my culture, my religion, and my social-economic disposition.

And the 65 countries I’ve visited in my lifetime have only added to my collection of lenses through which I see the world. I believe this ability to see things from different angles adds to my edge as an investor. After all, isn’t it the job of an investor to be able to see what others cannot and to appreciate that innovation comes from the intersection of a diverse set of peoples with a diverse set of disciplines, backgrounds, and ideas?

As a World Economic Forum Shaper, how do you build an inclusive community at Backstage and beyond?

I don’t have to do much to help build an inclusive community at Backstage because we already have one. The secret sauce, if you want to know it, is two-fold: our leaders make diversity a priority, and the team has a culture of inclusion.

When I think of the World Economic Forum (WEF), what comes to mind is the global agenda to address problems around the Fourth Industrial Revolution (4IR) and the ability to materialize the WEF’s mission to “improve the state of the world.” One of the biggest challenges I see in the 4IR is that creators and leaders of this revolution are not currently reflective of the diverse population in the world.

So, how am I helping address this diversity problem? I speak, I write, and now, as an investor in tech, I am putting money into 4IR companies that are founded and led by people of color, LGBTQ, and women. In my humble opinion, I believe that at the intersection of tech and venture capital, we can address the diversity gap and truly make it possible for the 4IR to improve the state of the world for ALL.

Have you faced major challenges as an investor?

My biggest challenge, to date, is rejecting the startups of founders I absolutely believe in but whose business is not a good fit.

What advice do you have for young women who want to enter VC?

I have tons of advice to share. You can read about it here.