Michelle Nacouzi is an associate at Indicator Ventures. Prior to Indicator, she worked as a management consultant for AT Kearney.
What drew you to venture capital and working with startups?
Growing up, I watched my parents work hard to build their own small business (a medical practice). They are both very self-made: my mom paid her way through a decade of medical school when women were outnumbered 5:1, and my dad left the Lebanese Civil War at age 18 with three brothers and $200 to eventually rise through Europe's merit-based education system. They've taught me since day 0 how to be scrappy and ambitious, and to aspire to “be your own boss”. I am my best self when in charge: raising five younger siblings, running an $11M nonprofit in college, managing a yearlong consulting engagement solo as a lowly Analyst—even personal things like being captain of my NYC soccer team. About a year ago, I think I hit my "glass ceiling" in the corporate world when I realized that working for large companies will probably never afford me the autonomy and lifestyle I need. I had to hit rock bottom of feeling miserable and stuck in my career before I finally hit pause and took time off work, but those emotions gave me the confidence I needed to turn down full-time offers from big tech companies and business schools. Instead, I took a sink-or-swim risk and just started pursuing my passions without knowing where it would take me. From there, I worked temporarily as a contractor for an SF ag-tech startup, where I met someone who recommended I pursue venture capital. Through her, I got connected to and found a great fit within the early stage investing space.
Why Indicator Ventures? What gives Indicator a competitive advantage?
It's impossible to meet the Indicator Ventures team and not be compelled by them. The GPs—Ben, Geoff, and Jon—are naturally entrepreneurial and acutely critical, something which can be hard to find in a “spray and pray” market. They also care deeply about our greater team, including me and David (our Analyst), and work insanely hard to support our founders. The Indicator community feels like a family, and one that I am uniquely suited to support because of my background of working closely with clients to solve business problems (except now, my clients are founders and I have real skin in the game).
Part of why I initially pursued and now have stuck with Indicator is because my role is so catch-all, and I'm never bored: this week, I was in SF on Monday, Boston on Tuesday, Manhattan on Wednesday, and worked from home on Thursday; I modeled pro rata cap tables and waterfalls for a Series A round; I designed sales collateral for a pre-product/market fit AI startup; I created weekly cash flow and runway estimates for a fundraising strategy; I ran our Partners Call meeting; I joined an executive offsite; I met with startups looking to raise funding; I attended a VC community event; I built case studies on our top-performing companies; and I flashed a 5.11 I've been projecting for weeks now at the gym (😁🧗🏽♀️).
You have a background in environmental science and economics from Berkeley as well as experience in consulting at AT Kearney. How has that helped you as an investment associate?
My undergrad education was super technical. I took engineering physics, organic chemistry, linear algebra, years of stats...you name it. I wrote two senior theses (one got published!). I learned how to learn—meaning, how to approach complex questions with many unknowns and to design and conduct experiments to test my hypotheses. It's the same skillset that I honed in consulting, where I constantly tackled steep learning curves with every new project. People always laugh that my undergrad has no correlation to my career, but I don't see it that way at all.
You wrote a fantastic Medium article on the 10 major differences between venture capital and consulting. Does it surprise you that few junior investors come from consulting? And of the 10 differences that you outline in your piece, what has been the most challenging for you to adapt to?
VCs should aim to surround themselves with diverse skill sets, including people with entrepreneurial, diligence, and operational experience (amongst others). I understand why the hiring for junior investors is over-indexed with banking and private equity (because most VC Analyst and Associate roles are focused on the diligencing and deal terms modeling) as well as ex-founders and early startup employees (because of their strong networks and ability to relate to portfolio companies), but it does surprise me that consulting is so under-indexed. Consultants are the pocket-knives of business—we can do a bit of everything, so unless you're singularly focused or large enough to compartmentalize, we are your best bet.
As for the most challenging difference, I would say the inverted org structures because the ratio of senior-Partners-I-report-to to junior-staff-supporting-me has flipped from bottom-heavy to top-heavy.
What are the common features of a 'winning' seed stage team?
Walter White, Jesse Pinkman, and Gus Fring—that's a winning team. Someone who understands and can build the product, someone who understand the industry and users, and someone who understands execution and how to scale. The three of them are tenacious and fearless, and balance the fine line between risk and reward. Although, full transparency...I haven't finished "Breaking Bad" seasons 4 and 5, so hopefully this analogy doesn't blow up in my face.
VCs blog. VCs have Twitter accounts. What do you think are the best ways to learn from investors?
I personally prefer blogs to Twitter, because you can dig further into an investor's thoughts on a topic, but also there is such an overwhelming plethora of information online that folks can just pick their favorite medium of ingestion (newsletters? Quora? Reddit?). Also, I've found that most VCs are incredibly receptive to coffee chat requests. Albeit I can more easily get responses now that I'm in VC than before, but even as a random cold-call emailer, if I expressed my passion for their specific work and asked for a low commitment of their time, I was pleasantly surprised by the community's openness. Just be targeted, persistent, and genuine.
You're from California and are known for your love of the outdoors. How do you make time to balance your outdoor activities with the hectic VC schedule?
I do love the outdoors, because being outside and experiencing 'Type 2 fun' makes me feel alive and humbled. Backpacking over 200 miles reminds me to celebrate the small joys in life (like clean running water and fresh fruits), and running a marathon through muddy trails helps take my mind off of petty anxieties. People always tell me that I don't get stressed out enough (and actually, I have routinely received negative feedback for not appearing to 'care enough' about the 'seriousness' of some situations); if emotions were oscillations, my wavelength amplitudes would be alarmingly lower than my professional peers.
I make time for this side of my life because I'm a hyuuuuge believer in work-life balance, and am convinced that our professional, personal, and physical successes are inextricably linked. Being able to take chunks of time away to be off-the-grid in the mountains just requires some planning, flexibility, creativity, and a lot of prioritization. For example, I know that August is a dead month for VC, so I'm already lobbying my friends/family to schedule our hikes next summer to be during that window. I save time by taking redeye flights, I maximize my productivity by working remotely, and I limit the inconveniencing on others by ensuring that I won't be a bottleneck for any work that needs to happens while I'm gone.
What advice do you have for young women who want to enter VC - on the investing, operations, or platform side?
Firstly...I think a lot of people chase VC purely because it has a certain mysterious glamor to it—don't do that. It's fine to explore VC the same way you would for any industry, but being successful in the startup/venture world requires a lot of unrelenting energy. I hate to throw out overused terms like "innovation" and "disruption", but the sentiment is accurate that the work involves constantly questioning and breaking down the status quo, without a playbook, against multi-directional headwinds. Be honest with yourself; if you prefer to have a reliable schedule, a decent understanding of day-to-day activities, and some role guidelines, then venture is probably not the best industry fit. That said, it's an exciting place to be for people who prefer the comforts of the great unknown!
I think part of why women are so underrepresented in VC is because we tend to take fewer career risks and don't self-promote as often as our male counterparts. VC opportunities don't come find you, but rather, you almost always have to go find them. There is no singular path into VC, so my general recommendation is to reach out to people who are well-connected and will champion for you, whether that's a VC-backed founder you know personally, a professor you impressed in school, an ex-coworker who tried to hire you, the blogger you've idolized for years, whatever. When speaking to a VC, be ready to prove your value-add and to provide examples of your entrepreneurial spirit.
Women and minorities need to constantly be looking for ways to elevate one another. I've had a million mentors pull me up over the years, and I try to do the same for others. Feel free to email me 👉 firstname.lastname@example.org 👈 and I'll provide whatever support I can.