Let’s start with the manifesto you created for Fika. What was the inspiration behind it?
Eva Ho: Early on, TX and I had been having conversations about starting a venture capital fund, and the manifesto actually developed extremely organically. It wasn’t like we sat down one day and said, “What are the words that we should use that people would find appealing and attractive?” Instead, we said, “What do we represent? What are our first principles, and what do we want this firm to represent for our founders?”
Only after we wrote it did the founders really gravitate to it. A lot of people who write us cold emails say, “It was because I read your manifesto that I’m asking you to take a look. I’m interested in working with you.” We didn’t recognize the impact of those words, because for us it was just who we were and what we were living and what we wanted to represent. So it’s been very interesting actually writing them.
Eva, what advice would you give to founders who were interested in creating their own manifesto? How would you guide them?
Eva: The first step is just starting one. I think a lot of founders don’t think about that early on, and it doesn’t become part of the DNA of the company that they’re founding. They usually do it three years later. And that’s actually OK. But for our portfolio companies, even if you’re a solo founder, write down what you believe in. Answer these questions: What do you want five years from now? What would you be proud of to have started?
And it could shift and evolve. It’s not the Ten Commandments; it’s a document that’s meant to evolve and be dynamic. For example, I think we have a strong commitment to diversity. So for us, that kind of conversation happens early — we want our companies and our founders to be really committed to and thinking about how they’re going to approach diversity early on.
That leads into the next topic of discussion. Female and minority VCs are underrepresented, and female and minority founders receive a small fraction of the total VC funding. What advice would you give to these aspiring VC and entrepreneurs?
Eva: This is such a deep and meaningful topic that TX and I have been committed to for several years. This is not a new problem, but many of the practices and approaches trying to solve it have not worked. So we’re sitting in a situation where the notion of [female] representation in tech is really bad. But it’s even worse for other diverse individuals, whether it’s socioeconomic or race.
I think we, as investors and as unicorn founders, have a responsibility to think of ways of making some impact. It’s not something where you say, “Hey, I need to work on it for a year. I need to do some unconscious-bias training.” It’s making a sustained commitment to be the change. So whether you’re an early-stage founder or you’re the founder of a billion-dollar company, whether you’re a VC at a $10 million fund or you’re a VC at a billion-dollar fund, everyone needs to pitch in.
TX Zhuo: The advice I would give is — I think a lot of minorities have been forced to conform to the construct of an ideal founder profile. My advice would be to embrace your identity and feel free to express yourself differently. There might be different ways you communicate, there might be different ways you think about things, but that’s what makes you special and that’s going to allow you to succeed. So embrace your identity and feel free to express yourself.
How has your involvement in All Raise helped what you’re trying to achieve?
Eva: All Raise is a nonprofit whose mission is to focus on accelerating the success of female funders and founders. To be 100% clear, it’s not just about gender. It’s about all underserved populations in the world. But we started with females because we knew we needed to focus. The genesis of All Raise started in early 2018, when where there were a lot of bad incidents happening in many tech companies, that really got us thinking, “We have a lot of problems. What can we do to fix it?”
And of course you bring together a group of really type A women — we quickly thought about “Let’s ship some initiatives and see what happens.” We launched two programs: Female Founders Office Hours and Founders for Change. After we launched it, we recognized how much the world wanted and needed it, and that started a whole thing. Fast-forward a year and a half, and we’re officially a nonprofit with a community of over a thousand women and men of all shapes, sizes and color. And we’re really focused on this mission: How do we drive more diverse people into the industry, both on the capital and the entrepreneurship sides?
Switching gears, can you tell us a little bit about your journey from being an entrepreneur to becoming a VC?
Eva: I’ll highlight one from the early 2000s. While I was not the founder, I was part of the small executive team. It was interesting because we had VCs on the cap table for that company, but it was a really antagonistic relationship. We were in our late 20s, none of us had been in tech before, and it was a really difficult financial environment at that time. We had a hard time getting funding, so not only was the financing difficult, but the way we were treated as entrepreneurs and founders of a company was really challenging.
And we took those lessons to figure out what we did not want to do with Fika. What was the type of relationship we did not want to build with our portfolio founders? That experience has made us very cautious of the power dynamic of the person who has the money sitting on this side versus the person who desperately needs your help. And for us, because we’ve been on the other side, we’re really sympathetic to that — we don’t want to take the steering wheel from the founder.
Lastly, what advice would you give someone who’s approaching a liquidity event like an IPO or selling a company?
TX: It’s a lot about personal convictions. It’s about what you want to do with your story, your journey. I think some stories have to come to an end at some point, and if you feel that this is a great way to end on a high and you’ve accomplished what you set out to do, then I think an acquisition makes a lot of sense. In some famous cases, founders turned down many different acquisition offers, and that turned out to be the right move. You, as an entrepreneur, have written your story to date. You know what the journey has been over the last number of years. I think you would be in a great position to make that judgment call as to whether an acquisition makes sense for your company or whether you want to take it to the next level.