20VC Finding VC Partners That Look Beyond The Numbers, The Black Box of VC Secrets That Needs To Be Shared & The 1,000 Reasons A VC Won't Invest In You When It Has Nothing To Do With You with Leah Busque, General Partner @ Fuel Capital

In this episode of "20 minutes VC," host Harry Stebbings interviews Leah Busque, the innovative founder of TaskRabbit and General Partner at Fuel Capital. Leah shares her journey from an IBM engineer to pioneering the sharing economy with TaskRabbit, which raised over $37 million before being acquired by Ikea. Her experience as a founder deeply influences her VC work, as she seeks founders with passion and perseverance, and believes in supporting them for success. Leah also discusses marketplace dynamics, emphasizing liquidity, unit economics, and the importance of balancing supply and demand. She stresses the value of authenticity, transparency, and alignment between founders and investors, and highlights the significance of early-stage VC relationships. Leah's latest investment in Bark, a social media monitoring platform for parents, reflects her commitment to impactful technology.

• Harry Stebbings introduces the show "20 minutes VC" and encourages listeners to follow him on Instagram.
• Harry expresses his admiration for Leah Busque's founding story of Taskrabbit, which he found inspiring.
• Leah Busque is a general partner at Fuel Capital and a pioneer of the sharing economy.
• Leah's achievements include founding Taskrabbit and raising over $37 million in VC funding before its sale to Ikea.
• Leah has been recognized by Fast Company as one of the 100 most creative people in business.
• Harry thanks Yuri at Forerunner for introducing him to Leah.
• Harry mentions the show's sponsors, Lisa, a mattress company, and Zoom, a video and web conferencing service.

This is the 20 minutes VC with me, Harry Stebbings now if you have not made the transition from Snapchat to Instagram, do it now and you can find me on Instagram at h Stepbings 90 96. Hopefully this will not affect Snapchat's stock price too much, however, to the show today.

This quote is Harry Stebbings promoting his Instagram account and humorously noting the potential impact on Snapchat's stock price.

And I first listened to this incredible guest when I was walking to college around five years ago, and I remember hearing her founding story and it just left me so inspired.

Harry recalls how listening to Leah's founding story years ago left a lasting impression on him.

As for Leah, prior to VC, she was a pioneer of the sharing economy with her founding of Taskrabbit, one of the leading online labor marketplaces in the US, where she raised over $37 million in vc funding in the process before their sale to Ikea last year.

This quote summarizes Leah's achievements before entering the venture capital industry, highlighting her success with Taskrabbit and its sale to Ikea.

• Leah Busque's background in engineering and her eight-year tenure at IBM.
• The idea for Taskrabbit emerged from a personal need for dog food on a snowy night in Boston.
• The concept was to use the iPhone's location awareness and social graph to connect with people in the neighborhood.
• Taskrabbit was one of the pioneers in the peer-to-peer space and the sharing economy.
• Leah's passion for emerging technologies led her to venture capital after a decade at Taskrabbit.
• Leah's introduction to Chris Howard and joining Fuel Capital was facilitated by Megan Quinn from Spark.

Taskrabbit came about one cold winter night in Boston. It was February of 2008. My husband Kevin and I were getting ready to go out to dinner when we realized we were out of dog food.

Leah shares the origin story of Taskrabbit, which was sparked by a real-life situation that highlighted a need for a local marketplace service.

And so when I thought about what I wanted to do next, I realized that I had put my head down in one company and one business in one technology for a decade, and I really, really missed that engineering and that technical side of me that really wanted to pick my head up and look around and continue to learn and be curious about new and emerging technologies.

Leah explains her decision to transition to venture capital as a desire to return to her engineering roots and explore new technologies.

And then I was lucky enough to get introduced to Chris Howard, who founded Fuel Capital four years ago by a mutual friend, Megan Quinn, who runs the growth team at Spark.

This quote details how Leah was introduced to Chris Howard and subsequently joined Fuel Capital, emphasizing the role of networking in the venture capital industry.

• Leah reflects on the early days of Taskrabbit and the challenges of being ahead of the market.
• She values perseverance and passion in founders, which she deems critical for overcoming obstacles.
• Leah looks for founders who are purpose-built for their ventures and have a compelling story.
• The experience at Taskrabbit influences Leah's curiosity and willingness to take risks in new technologies as an investor.
• Understanding the technical aspects of a startup is crucial for scaling and figuring out solutions faster.

I love to sit across from a founder and look them in the eyes and just ask them, why are you here? What brought you to this moment? What is your story?

Leah discusses her approach to evaluating founders, emphasizing the importance of their personal connection and passion for their business.

We were at the early cusp of that. And so I've seen the value of being able to look ahead and have a vision for how you can utilize the technology to push innovation forward, to push humanity forward, really.

Leah speaks on the importance of foresight in technology and innovation, drawing from her experience with Taskrabbit.

• Leah's operations background and VC experience provide her with insight into the founder-VC relationship.
• The optimal VC-founder relationship involves mutual understanding and support to help scale the startup efficiently.

Having had know, I've been lucky enough to have some

Unfortunately, the transcript is cut off at this point, so no further information is provided about Leah's views on the VC-founder relationship.

• Leah Busque had positive relationships with early-stage investors who were instrumental in the growth of her company.
• These investors included Anne Miraco from Floodgate Fund, Rob Hayes at First Round, Steve Anderson at Baseline, and Craig Shapiro at Collaborative Fund.
• Leah appreciates investors who bet on her company early on, align with her vision, and share her cultural and value-based principles.
• Each investor played a unique role in supporting her, such as Anne Miraco helping with board setup and metrics, while Steve Anderson provided negotiation advice.
• Leah now aims to replicate these positive relationships in her role as an investor by being a behind-the-scenes confidant and sharing her experiences with new founders.

"Anne Miraco from Floodgate Fund, who led our seed round of know, I consider a great friend and a mentor. She led our seed round. She sat on my board for three years."

This quote highlights the close and supportive relationship Leah had with Anne Miraco, who not only led the seed round but also served as a board member and mentor.

"Steve was someone I would call behind the scenes, on the side, if I was negotiating a partnership or a business development deal and just say, how do I get this?"

Leah valued Steve Anderson's expertise in negotiations and business development, which she could rely on outside of formal board meetings or official channels.

• Leah believes that the alignment of values, vision, and culture between founders and investors is crucial.
• The ability to assess this fit varies depending on the stage and size of the company.
• At Fuel, where Leah is now an investor, the focus is on early-stage investments where decisions and relationships are formed quickly.
• In later stages, such as Series A or B, there is generally more time to assess and form deeper relationships, as board tenures can be lengthy.

"I think at the later stages it's different. When you're raising a series a, a series b, a growth round and someone's going to sit on your board for the next seven years, those end up being different dynamics and different relationships."

Leah points out that later-stage investments involve a longer-term commitment, which allows for a more thorough assessment of the cultural and strategic fit between the founder and the investor.

• Leah Busque has observed a lack of transparency in the venture capital industry, especially for early-stage entrepreneurs.
• She advocates for greater openness, drawing parallels to the transparency seen on social media platforms.
• Leah joined Fuel because of shared values of authenticity and transparency with Chris Howard.
• She believes that transparency is crucial and beneficial for founders, particularly those who are navigating fundraising and venture capital for the first time.

"There's so many things, I think, that have been held close to the chest in the VC community that I feel like deserve transparency."

Leah criticizes the secretive nature of the VC industry and calls for more openness to benefit and guide new entrepreneurs.

• Leah grappled with the challenge of balancing her role as an investor with her experience as a founder.
• She believes in a founder-first philosophy, where supporting the founder's success leads to positive outcomes for both the company and the investor.
• The focus should not be on squeezing out the best deal but on fostering long-term relationships and company growth.

"I strongly believe, and Chris believes this as well, that when the founder is successful, the company is successful, and the venture investor is successful, and it happens in that order."

Leah emphasizes the importance of prioritizing the founder's success as a precursor to the overall success of the investment and the company.

• In early stages, founders must rely on instinct to gauge an investor's understanding and passion for the vision and impact of the company.
• Leah looked for investors who could see beyond the numbers and were interested in the broader movement and societal impact of her company, Taskrabbit.
• She valued partners who connected with her on a deeper level, beyond just the financial model.

"I was always looking for partners that kind of looked beyond the numbers and really wanted to be a part of the movement."

Leah sought investors who were not only interested in the financials but also resonated with the mission and larger societal impact of Taskrabbit.

• Leah Busque discusses her excitement about the new chapter in her career moving from operations to venture capital.
• She reflects on how her decade-long experience with Taskrabbit has prepared her for this transition.
• Leah emphasizes her passion for emerging technologies and supporting first-time founders, especially those who lack a traditional network or don't fit the typical mold.

"I now have two other children. So I consider myself with three children, Taskrabbit being the first. And so when you're in it and you're so deep in it, it's hard to think about being out of it and looking beyond it. Now I can say sort of coming out on the other side that I feel like this last decade has really prepared me for what I am meant to do."

Leah compares her startups and personal children, indicating a deep emotional investment. She suggests that her past experiences have equipped her for her current role in venture capital.

• Leah was surprised to learn that many factors unrelated to the quality of a company or founder can influence an investment decision.
• She acknowledges the emotional aspect for founders when seeking investment and the variety of reasons investors may have for not investing.

"You realize that there's so many reasons that have nothing to do with the actual company, with the actual entrepreneur, for reasons why you wouldn't make an investment."

This quote highlights the complexity of investment decisions and the potential disconnect between founders' perceptions and investors' reasoning.

• Leah believes in the importance of being helpful to founders, even when not investing.
• She strives to use meetings with founders productively, offering support such as introductions, feedback, and brainstorming.
• Leah's approach is to build a reputation as a helpful investor and respect entrepreneurs' time.

"I just want to utilize that hour that I've committed to spending with that person in a productive way, because I have so much empathy for where they have been."

Leah emphasizes her empathetic approach to meetings with founders, aiming to be constructive regardless of investment outcomes.

• Leah discusses the learning curve related to understanding the layers of capital and investor dynamics.
• She compares pitching to limited partners (LPs) for a fund to entrepreneurs pitching venture capitalists.
• Leah finds the process of learning about and interacting with LPs enjoyable and crucial for the growth of their fund.

"It wasn't until I started pitching at my investors lp meetings that I realized my investors had investors and then on sort of this side of the table."

Leah expresses her realization of the multi-layered structure of capital in venture capital, highlighting a key learning aspect of her role.

• Leah has analyzed and written about the changing anatomy of marketplaces over the last decade.
• She identifies liquidity between supply and demand as crucial for a successful marketplace.
• Leah looks for metrics around liquidity, network effects, and unit economics to assess marketplace health.
• She believes that understanding these aspects is essential for a marketplace to be ready to scale.

"I think about successful marketplaces, I think about marketplaces that have liquidity between supply and demand."

This quote underscores the importance of liquidity as a fundamental characteristic of successful marketplaces according to Leah.

• Leah discusses the readiness to scale in marketplaces, focusing on understanding unit economics and the ability to match supply with demand.
• She believes that a marketplace is ready to scale when it can operate with positive margins and the underlying metrics are favorable.

"Do you understand unit economics? Do you understand how all the building blocks fit together? And if you were to add 100,000 customers tomorrow, would you know how to build up the other side to match it?"

Leah poses critical questions that determine a marketplace's readiness to scale, emphasizing the importance of a solid operational foundation.

• Leah acknowledges the challenge of balancing satisfaction between the supply and demand sides of a marketplace.
• She notes that changes benefiting one side can often upset the other, highlighting the complexity of managing a marketplace.

"No one is ever happy with you. If you change things on one side and customers are really happy, chances are that on the other side of the marketplace, you've really made someone mad."

This quote reflects the inherent difficulties in maintaining equilibrium between the supply and demand sides of a marketplace, as experienced by Leah with Taskrabbit.

• Marketplaces must manage the experiences of both suppliers and customers.
• Achieving a balance where both parties are satisfied is challenging.
• It's common for the Net Promoter Score (NPS) of one side to be the inverse of the other.
• Balancing both sides' experiences is a complex but essential part of operating a marketplace.

"If the suppliers were having a great experience and were making a lot of money, that sometimes could have been at the detriment of the customers. And so it's a tough balance."

This quote emphasizes the difficulty in ensuring both suppliers and customers have positive experiences without one side's gains causing detriment to the other.

• Reading books can significantly influence career decisions and life changes.
• "Founders at Work" by Jessica Livingston inspired Leah to leave her job and start Taskrabbit.
• Books can provide insights into the startup community and founder experiences.

"It is a book that literally changed my life. I read it over ten years ago, right before I founded Taskrabbit."

Leah credits the book "Founders at Work" with inspiring her to take the leap into entrepreneurship, showing the profound impact that reading can have on personal and professional development.

• Becoming a parent can dramatically change one's worldview.
• Parenthood influences investment decisions, focusing on generational impact and humanity.
• Investors may seek companies with the potential for long-lasting, positive contributions.

"It's changed my views dramatically. I think that as a parent, I've realized that I want to leave this world in a better place..."

Parenthood has given Leah a deeper perspective on the broader implications of technology, influencing her to invest in businesses that can positively affect future generations.

• Early mentorship can be a pivotal factor in career development.
• Scott Griffith of Zipcar provided guidance and resources to Leah in her early entrepreneurial days.
• Observing and interacting with a mentor can offer insights into leadership and management.

"He kind of took me under his wing, and he gave me the courage to quit my job to start Taskrabbit."

Scott Griffith's mentorship was instrumental in Leah's decision to start her own company, highlighting the value of having a supportive and experienced mentor.

• The character and values of collaborators are crucial in business partnerships.
• Authenticity, transparency, and shared values are important traits when selecting collaborators.
• Working with people who are enjoyable to be around can contribute to building something meaningful.

"People are the most important thing in anything you do... And when I met Chris at Fuel, I realized that he is just a great person."

Leah emphasizes the importance of people and shared values in her decision to work with Chris at Fuel, underscoring the significance of personal connections in professional collaborations.

• Mutual respect and understanding each other's strengths and weaknesses are key to a successful partnership.
• Leveraging insights into each other's capabilities can enhance collaboration.
• Balancing technical and emotional support is essential.

"I think it just really comes down to, of course, respect, but then also realizing sort of what each person is really good at..."

This quote explains how respect and recognition of each other's strengths contribute to the effective partnership between Leah and her husband, Kevin, both professionally and personally.

• The potential impact of a company is a significant factor in investment decisions.
• Companies that utilize technology to address societal issues, like Bark's monitoring platform, are attractive investments.
• The technical expertise of the founder and the company's mission can be compelling reasons to invest.

"He has a vision for this business that is so high impact and so important... I'm really excited about their mission and also the technical aspects of what they've built."

Leah's investment in Bark reflects her interest in companies with impactful visions and strong technical foundations, showcasing her focus on meaningful and technologically innovative businesses.

• The joy of working in one's chosen field is a key aspect of professional fulfillment.
• Engaging with inspiring individuals can enhance the enjoyment of one's work.

"One of those shows where I really remember how much I love what I do."

Harry Stebbings expresses his enjoyment of the podcast and his profession, indicating the personal satisfaction derived from engaging conversations and connections in his work.