Renegade Partners — a Bay Area-based venture firm co-founded by veteran VCs Renata Quintini and Roseanne Wincek — is taking the wraps off a $100 million debut venture fund that’s been capturing the imagination of the business press since almost its conception in late 2019.

The effort is interesting for a number of reasons, not least because of the backgrounds of both Quintini and Wincek, both of whom left powerhouse venture firms to join forces. Quintini, a trained attorney, was an investment manager with Stanford University’s endowment before being recruited into Felicis Ventures, after which she was poached by Lux Capital. Across those firms, she worked closely with a number of high-flying startups, including the autonomous driving company Cruise, the satellite startup Planet and the clothing company Bonobos.

Wincek was meanwhile once set on nabbing a Ph.D. at UC Berkeley, instead leaving the school with a master’s degree in biophysics to head to Stanford for her MBA. From there, it was on to Canaan as a principal, and then, she headed to IVP, where she rose through the senior ranks to partner, investing across enterprise and consumer companies that include Glossier, Compass, MasterClass and TransferWise.

It’s not a new trend, successful VCs who happen to be women leaving established firms to create their own outfits. Think Mary Meeker of Bond, Dayna Grayson of Construct Capital and Beth Seidenberg of Westlake Village BioPartners, just to name a few. But unlike some of its predecessors, Renegade isn’t limiting itself to playing a certain role in the venture universe. It isn’t bound to any sector. It isn’t marketing itself as an early-stage venture firm. What it is looking for is a fairly specific mix of traction, team and market — a combination that it is finding in companies that are anywhere from their Series A to Series C stage.

Their in-house head data scientist is helping home in on companies in Renegade’s sweet spot, say the co-founders. So is a chief people officer with a powerful resume of her own (Uber, eBay); principal Chloe Breider, a former IVP investor who worked closely with Wincek; and, as Renegade’s “decision scientist,” the former professional poker player and best-selling author Annie Duke.

We talked with Quintini and Wincek earlier today to learn more about what they have assembled — and how Renegade makes its mark in an industry that has never been more competitive. Excerpts from that chat, below, have been edited lightly for length.

TC: People would probably shiv someone to get a job at either firm where you worked. What drove you to leave, and who reached out to whom when it came time to partner?

RW: We first met when I was at Canaan and Renata was at Felicis, and back then, there weren’t many women in venture, so [women VCs were like] “Oh, there’s a new one, ‘Come meet everybody.'” Over the years, we looked at a lot of stuff together, and especially after I moved to IVP,  I was always bugging Renata about what was in her portfolio.

A few years ago, we were at one of those big, boozy dinners, with a bunch of people of our age at a bunch of firms. We were all having the conversation like, “Oh, if I had my own firm, I would do this, and I would do that,” and Renata and I were finishing each other’s sentences. And I remember going up to her and saying, “We should have this conversation for real but maybe with less wine.” And that was Memorial Day of 2019.

Institutional investors sometimes worry about how well an emerging manager team will get along when they’re coming from different places. How did you address this?

RQ: We were good friends, I thought Roseanne was a phenomenal investor, but frankly, we didn’t know if we would be good co-founders and that’s the biggest risk, right? We did ask: how do we de-risk this? And we actually hired a coach for what we jokingly refer to as marriage counseling. But we did a lot of work around how we handle stress and what success looks like and what our values are. We also spent a lot of time in hotel rooms, and I can tell you that Roseanne is more of a morning person than I am.

You were raising this in the middle of the pandemic. How did that impact fundraising?

RQ: We had our first close on Friday, March 13, the weekend before COVID [started shutting everything down]. The Grand Princess Cruise was coming into the Bay, and we’re on the phone with the LPs, and we didn’t know if people were to going to come through. I think if we didn’t have our track records to draw from, [the fund] wouldn’t have happened. We were very lucky that we were backed by institutional LPs — an Ivy League school, endowments, foundations, family offices. But we did not factor in COVID.

I see language about the “supercritical stage” on Renegade’s site. What does that mean?

RW: That phrase is purposely vague, because we don’t think the stage definitions mean that much anymore. I started my career as a chemist way back when, and supercritical fluid is the state of matter that is neither liquid nor gas but both at the same time, and we feel like companies can be the same. There’s a product to market, there is some data, there’s early customer love and generally a sizable team, but they’re not the big growth companies yet, right? They’re not ready to raise a big growth round and pour fuel on the fire, and that’s how we think about [our ideal targets].

Our sweet spot is [a startup with] early revenue — from a quarter million dollars a year up to a million dollars a month — [that have] from 20 to 100 employees [and which are] raising rounds that are between $10 million and $50 million. Our first deal was actually a Series C deal, but we have Series A and Series B companies in the portfolio, too, that all sit in that sandbox.

RQ: There’s so much capital today that capital is cheap. But execution is expensive, so our focus is on preparing startups to execute as big, giant companies. It’s: How do I think about the organization as it scales? How do I think about the exact team that I need? How do I think about my option pool? About my founder role design? How do you manage your capital and leverage your board? Things are working so well for some founders that the wheels are falling off the bus; meanwhile, many are thinking about these same questions [that they never had time to sort out].

If you aren’t sector or stage focused, how do you whittle down what you’re looking to fund?

RQ: One good thing about [the types of startups we’re backing] is that they were funded by somebody else before, so it’s a known universe, if you’re thinking about it from a data science perspective.

Beyond that, it’s applying the heuristics that Roseanne, myself, Chloe, Susan [Alban, Renegade’s chief people officer], have had from a decade plus of investing and working at outlier companies. It’s not just a number. It’s the quality of revenue. It’s a combination of other breadcrumbs that the companies put out there in terms of who have they hired and what are customers thinking of their product, and is this company building a system of record, and what is the velocity of adoption. Technology alone can’t do [the work].

There’s so much money sloshing around right now. In terms of the advice you’re giving your portfolio companies, what do you tell them about how to react when someone knocks on the door and offers more funding right after they’ve closed a round?

RQ: There are so many dimensions here. First, you should look at it from your company’s needs. You got to deploy this capital, and you got to provide a return on this capital, and nothing is free, so the more money you raise, the higher the valuation you receive, it catches up to you in the next round because you got to clear that watermark.

[We also tell them to ask themselves] do you have investments to make? Do you have team to hire? Some founders we’ve talked with have said, “I’m not going to raise any more because I cannot go faster or deploy more than my model is already supporting. I’m actually going to execute more and then take more [capital] down the road when I’m going to get more credit for the stuff that I built, and the ROI is going to be better.”

The other piece, too, is when you’re in a very competitive environment, you have to look at what’s happening around you. Sometimes if your competitors are raising and pushing the market forward, it may be a reason to think [about raising more than you’d planned] because maybe they can out-hire you or they can outspend you in certain areas and can generate more traction. So you can’t look at things in absolute terms. At the same time, there is no free money and a lot of founders unwittingly create more problems for themselves [by not thinking through what that next check means].

People see a women-led venture team and wonder how focused you will be on women-led startups.

RQ: I think we’re great investors who happen to be female. Our primary focus is on diversity of experience and thoughts. Gender is just one of the lenses, and diversity is one of the core values of our organization because we believe that provides better returns.

RW: One thing that’s been really fun and validating and inspiring about all this is the people who do come out of the woodwork who are so excited [about Renegade], because representation matters. At the end of the day, this is how this changes. We chip away at this and soon, you won’t ask this question anymore because it won’t be topical. That’s the goal.

Do you feel that the diversity matters for LPs? Do you think that diversity is going to be codified in the way that LPs are looking at investing in funds?

RQ: Some lead with it. Others say, “Let me look at past returns.” They look at lagging indicators. Today, founders are picking investors who reflect their values, who they’re proud to be associated with — people who have their same energy and will go to bat for them and with them. These are the returns of the future, regardless of whatever Cambridge tells you today about investments that were made in the past. Leading LPs know this.

Source: TechCrunch

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