Lolita Taub of Backstage Capital

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

 

Lolita holds a BA from the University of Southern California and an MBA from the IE Business School. She’s living the dream working alongside and investing in the next generation of diversity-led tech unicorns. 

 VC Direct Q&A with Lolita Taub

Lolita it is great to speak with you! Let’s dive right in because you have a lot going on. I want to go back to how it all started. What drew you into the VC world?

I grew up in Fortune 500s, IBM and Cisco, went into tech startups in Silicon Valley and New York, and then ended up becoming a tech investor. My path from corporate to startup was pretty logical: I liked tech and I wanted to get closer to the exciting fringes of tech innovation.

It was during my startup phase where I realized that there were pretty awesome underrepresented and underestimated founders of tech startups that weren’t getting investments because they didn’t fit the typical Silicon Valley founder mold, which usually involved being a white guy in a hoodie. That didn’t make any sense to me because - no matter what you look like, where you come from, or what school you went to - anyone who puts in the work can build great businesses and have huge exits. Two great examples of this are Katrina Lake, Stitchfix, and Theresa Tucker, Blackline, two women founders who went on to build $2B dollar businesses.

Ultimately, I came to the conclusion that I wanted to leverage my ability to see opportunity that others don’t to invest in awesome founders (regardless of stereotypical VC pattern matching) who will push the future of tech, and make me a lot of money while I’m at it.

If you’re interested in exploring a career in venture capital, I recommend you sign up for the All Raise, NextGen, John Gannon newsletters, and attend my friend Elizabeth’s “Breaking into VC” call here.

 

You have now worked with several funds: K Fund, Portfolio and Backstage Capital. What is it like at Backstage? Give us a glimpse into your typical day.

 

There is no typical day but what I can tell you is that I spend a lot of time re-prioritizing my activities based on whether they will bring me closer to my fiduciary responsibilities: invest in solid companies that will provide outsized returns for our investors. That includes: selecting investments and supporting them on their path to commercialization, growth, and exit.

When you are looking at companies to invest in, what characteristics do you look for?

 

It depends on the stage the business is in, what industry they’re operating in, and many other factors. That said, across the board, I do tend to look at team, market, problem/solution, validation/traction, scalability, differentiation moats, investment ROI, and a positive gut feeling about the team and company. I want teams to have complementary domain expertise in their business niche. I want there to be a +$1Billion market that’s growing. The startup needs to be a solution to a big problem. I want to see that there is validation of their business through, for example, customer traction. I want to understand whether the business is able to grow big and fast. I want to know that the business is hard to replicate. I want to know how investment dollars will be used and the return of it (e.g., sales). Above all, I want to build a sense of trust between the founders and me.  

You can get a more in-depth look into what VCs look for in startups by reading Brad Feld’s Venture Deals book and reading investor blogs.

 

Tell us about your role with Backstage Capital. Do you focus on early stage investments, exit strategies, advising startups or all of the above?  

 

All of the above and more.

 

Startups in some instances will either: 1) hesitate to contact a VC because of the fear of rejection, 2) contact a VC when they have not done their due diligence on the investor, or 3) simply not approach a VC since they do not know how. Lolita, how can a startup become “attractive” so to speak to an investor like yourself?

Startups in some instances will either: 1) hesitate to contact a VC because of the fear of rejection, 2) contact a VC when they have not done their due diligence on the investor, or 3) simply not approach a VC since they do not know how. Lolita, how can a startup become “attractive” so to speak to an investor like yourself?

 

Fearing rejection is normal but the important thing is that you grow used to it because it’s not only a part of building a business and raising capital, but it's also part of life.

 

Consider what stage you are in, how much money you need, what sector you’re in, and then go research what investors invest in your stage, write the check size you need and invest in the sector you are in. Also, take note which investors can add the most value to your startup, whether through the resources that they offer their portfolio companies, their knowledge, or their network. Once you find your VC matches, research individual investors within those funds and reach out to start a relationship before you ask for money.

You can use Signal, VCWiz or Crunchbase to start your VC research.

Outside of investing, you’re a Technolochica 3.0 Ambassador. Can you tell us about your involvement?

 

TECHNOLOchicas, a collaboration of National Council of Women in Tech and Televisa Foundation, is an initiative to raise awareness among Latinas and their families about opportunities and careers in technology. And as one of the 11 Latinx women in STEAM in the US who were selected to be ambassadors of TECHNOLOchicas this year, my task is to get more young Latinas excited about tech. I’m doing that by sharing my story and talking to girls on the ground.

Lastly, I see that you were a Greco-Roman wrestler in high school! I am a big sports fan so I am truly impressed. What motivated you to try out for the boy’s wrestling team?

One of the team’s wrestlers said to me, "Girls can't wrestle. I bet you couldn't handle practice."

My competitiveness kicked in. I had run 3 marathons and I knew wrestling would be a piece of cake. I had to prove that I could do it. So, I signed up and I wrestled for the rest of my high school career...yes, in leopard knee pads.

Sure, I got a concussion at one point and got my butt kicked a bunch, but I did win a handful of matches. And the victory of those was sweet. Girls can wrestle.

It has been a pleasure to speak Lolita. If anyone needed to contact you directly how can they reach you?

Find me on Twitter @lolitataub.

 

Thanks Lolita and all the best to you.

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