20VC Worklife Ventures' Brianne Kimmel on Why More Operators Should Start Their Own Fund, How To Structure Your Round for the Highest Signal Round & What The MultiStage Funds Playing At Seed Means For The Rest of The Asset Class

In this episode of "20 minutes VC," host Harry Stebbings interviews Brienne Kimmel, founder and managing partner at Work Life Ventures, which specializes in the future of work and is backed by industry heavyweights like Mark Andreessen and Alexis Ohanian. Kimmel shares her journey from teaching at General Assembly and working at Zendesk to angel investing and eventually establishing Work Life Ventures. She emphasizes the importance of focused entrepreneurship, the rise of 'hype B SaaS,' and the shift from scrappy SaaS models to building consumer-grade experiences in B2B software. Kimmel also discusses the evolution of funding models, the value of angel investors, and her latest investment in Pace, a company that offers flexible payment solutions for SaaS businesses. Throughout the conversation, Stebbings and Kimmel explore the changing landscape of venture capital, the significance of strategic cap table construction, and the growing trend of remote work.

• Work Life Ventures is a new firm focused on the future of work.
• It has received backing from prominent figures in the tech industry.
• Brienne Kimmel, the founder, has a history of investing in successful companies.

"I've been looking forward to releasing this one for quite a long time now and so I'm thrilled to welcome Brienne Kimmel, founder and managing partner at Work Life Ventures, a very new firm focused on the future of work, backed by some of the best in the valley."

The quote introduces Brienne Kimmel and her firm, Work Life Ventures, highlighting its focus and the notable backers supporting it.

• Brienne has a history with Zendesk, focusing on Go-to-Market strategies and building Zendesk for Startups.
• She has been involved in teaching and building communities, which led to her angel investing and eventually founding Work Life Ventures.

"And prior to starting work life, Brienne spent two years at Zendesk on their Go-to-market strategy, building Zendesk for startups, ultimately representing 3000 startups and 250 accelerators."

This quote provides insight into Brienne's experience at Zendesk, which contributed to her expertise and network in the startup ecosystem.

• Airbase is presented as a spend management platform for startups.
• Clearbank offers funding solutions for online businesses.
• Terminal helps build remote engineering teams.

"And that's where Airbase come in. Airbase is the ideal cloud based spend management platform for growing startups."

The quote explains the role of Airbase as a financial management tool for startups, indicating its importance in the startup infrastructure.

• Brienne's venture into angel investing was nontraditional, starting with teaching at General Assembly.
• She progressed from operating roles to teaching, advising, and then writing angel checks.
• Her experience led to the creation of Work Life Ventures, focusing on SaaS businesses and bottoms-up business models.

"I actually started teaching classes at General assembly very early in my career...then started angel investing and then went out to raise some outside capital to build work life."

This quote outlines Brienne's path from teaching to angel investing and eventually raising capital for her own venture firm, emphasizing her unique journey.

• Work Life Ventures is structured as a holdings company, not a traditional fund.
• This structure allows for flexibility in supporting SaaS businesses at various stages and facilitating different funding models.

"I wanted to structure work life in a way where if I meet great entrepreneurs who are hitting some roadblocks around the five to 10 million ARR mark, I do want to have the ability, sort of a separate structure to facilitate some boutique funding models such as private equity."

Brienne explains the rationale behind Work Life Ventures' structure, which is to provide tailored support and funding options for SaaS businesses at different growth stages.

• Work Life Ventures' average check size is around $100,000 to $150,000.
• The fund is designed to be nimble and able to participate in competitive rounds alongside multi-stage funds.

"What I wanted to do from a portfolio construction standpoint with work life is incrementally grow that check size. So I will say my average check is around 100 150 and I can scale up to 200k."

Brienne discusses the strategic approach to check sizes within her portfolio, aiming to maintain a balance between being competitive and founder-friendly.

• Founders are increasingly favoring multi-stage funds over seed funds.
• Work Life Ventures positions itself to be compatible with this trend by keeping a friendly check size.

"I think that the lines and the numbers and the letters are getting blurred...I found that the 100 to 150 is still a friendly check size where I'm able to get into the deal alongside a multistage fund, potentially another seed fund."

Brienne acknowledges the shifting landscape in venture capital, where distinctions between funding stages are becoming less clear, and adapts her strategy accordingly.## Multistage Funds and Seed Practices

• Multistage funds have improved their seed investment practices.
• Repeat entrepreneurs with established relationships often prefer multistage firms for their Series A rounds.
• Seed funds face challenges competing with multistage funds, which can quickly invest with less diligence due to larger fund sizes.

"Multistage funds have done a really impressive job of really ramping up their seed practices."

This quote indicates that multistage funds have significantly improved their approach to seed-stage investing, making them more competitive in this space.

"Once a company starts to gain some momentum and some heat, it is more difficult for a seed fund to compete with one of the sort of top tier multistage."

The quote reveals the difficulty seed funds have in competing with top-tier multistage funds, especially when a company begins to show significant growth potential.

• Concerns are shared about the rapid pace of seed fundraising.
• The market is very active, with a lot of capital available for early-stage companies.
• Boutique seed funds offer more support and infrastructure compared to multistage funds, which may expect entrepreneurs to figure out many issues independently.

"I do share some concerns around how quickly the seed landscape is moving."

The speaker expresses concerns about the fast pace at which seed-stage fundraising is happening, indicating potential issues with this trend.

"A lot of the boutique seed funds already have the infrastructure in place."

This quote suggests that boutique seed funds provide more support infrastructure to startups than multistage funds, which could be beneficial for certain entrepreneurs.

• Angel funds are becoming more prevalent due to the abundance of capital and new avenues to build a track record.
• Scout programs and productized offerings from platforms like AngelList and Carta facilitate the creation of micro VC funds.
• Some angels are considering moving away from scouting to deploy their own capital for better economics and vested interest.

"There's this combination of scout funds, less syndicates, and there's these new ways to really build a track record as angel."

The speaker points out that the landscape for angel investors is evolving with new mechanisms to establish themselves in the venture ecosystem.

"A lot of individuals who are exploring this more boutique micro VC model where potentially you can continue operating."

This quote highlights a trend where individuals are starting boutique micro VC funds that allow them to invest while possibly maintaining their primary occupations.

• The focus is crucial for entrepreneurs, and there are concerns about founders getting distracted by angel investing.
• Successful companies often result from focused CEOs who systematically approach culture and operations.
• Distractions from the core business, like angel investing, might not be the best use of a founder's time and resources.

"The greatest thing an entrepreneur can do today is to stay focused."

This quote emphasizes the importance of focus for entrepreneurs, indicating that diversions like angel investing might detract from their primary goals.

"These breakout companies don't happen by chance."

The speaker suggests that the success of companies like Slack, Zoom, and Webflow is not accidental but the result of deliberate and focused efforts by their CEOs.

• Startups have become a mainstream cultural phenomenon, attracting interest from celebrities and athletes.
• Celebrities are diversifying their portfolios by aligning with brands that resonate with their image.
• The rise of the creative class is creating new opportunities for professionals to become influencers within their fields.

"Startups are going mainstream."

This quote reflects the growing interest in startups beyond traditional tech circles, with celebrities and athletes now engaging in the startup ecosystem.

"The next generation of great consumer tech companies, they sort of meet at this intersection of work and life."

The speaker notes that new consumer tech companies are emerging at the intersection of work and personal life, appealing to a broader audience, including celebrities.

• Founders should be strategic in constructing their cap tables to include a mix of "show horses" and "workhorses."
• Show horses are investors with strong reputations who can attract follow-on investors.
• Workhorses are hands-on angels who actively support startups outside their primary jobs.

"What would a perfect cap table look like?"

This question suggests the importance of deliberate cap table construction to attract the right mix of investors who can provide both reputation and hands-on support.

"Founders should find both show horses and workhorses."

The speaker advises founders to seek investors who can not only lend credibility but also contribute actively to the startup's growth and development.## Portfolio Construction and Active Operators

• Active operators in the investment space are meticulous in portfolio construction.
• They focus on investing in the next generation of companies while balancing their primary roles.
• Jeff Morris Jr., a product leader at Tinder, has built a VC fund called Chapter One and is an example of balancing company support with product focus.

He's omni first, but really wants to give back and invest in the next generation of great companies.

This quote highlights the dual focus of active operators: commitment to their primary roles and dedication to fostering new ventures.

• The role and expectations of angel investors have evolved over time.
• Entrepreneurs should expect tangible value from angel investors, such as sourcing candidates or dedicating a few hours per month.
• Angels are becoming more selective and mindful of the companies they invest in, often seeking to build a strong reputation and track record.

If angel sources and clothes is one key candidate, or they give you one to two dedicated hours per month, they've delivered their value for, say, a 25 to 50k check.

This quote outlines the expected contributions of angel investors in relation to the size of their investment.

• There is a blurring of lines between work and life, especially in the tech-driven workforce.
• The fund aims to explore new ways of accessing work and unlocking human potential at scale.

What does the future of work look like? Not just from a software standpoint for individuals who are building software applications for other startups, but what are some new ways that both individuals are accessing new types of work?

This quote reflects the fund's focus on reimagining the future of work beyond traditional software applications.

• Traditional B2B language is becoming irrelevant as consumer tech operators enter the B2B SaaS space.
• These operators bring best practices from consumer tech companies to B2B SaaS, creating tools that are widely applicable.

The next generation of great SaaS companies, they're actually being built by operators who are spinning out of consumer tech companies.

This quote explains the shift in who is creating B2B SaaS companies, emphasizing the influence of consumer tech practices.

• Many SaaS products are easy to build, so having a competitive advantage is crucial.
• Competitive advantages may stem from unique distribution channels or building products alongside influential tech companies.

There needs to be some sort of competitive advantage.

This quote underlines the necessity of having a unique selling point for SaaS products to stand out in the market.

• The era of quickly launched SaaS businesses with a freemium model is fading.
• Companies are now focusing on collecting data, providing consumer-grade experiences, and asking users to pay from the outset.

Scrappy SaaS is dead.

This quote declares the end of a particular approach to SaaS that relied on rapid, often undifferentiated product launches.

• There is a growing emphasis on incorporating consumer-grade experiences into workplace products.
• Superhuman is cited as an example of a product that uses video game design principles to solve productivity challenges.

We need to figure out how to bring that into the workplace.

This quote suggests that the appeal of consumer experiences should be leveraged to enhance workplace software.

• The quick fire round is a segment where immediate thoughts are exchanged on various prompts.

Are you ready to rock and roll?

This quote sets the stage for a rapid exchange of ideas, indicating a shift in the conversation's format.## Reading Preferences in Silicon Valley

• Individuals in Silicon Valley are typically nonfiction readers.
• Brienne Kimmel has developed an interest in comic books that explore the future of work, with a dystopian angle.

lks in Silicon Valley tend to read a lot of nonfiction. So I have been going through, there are a number of comic books that touch the future of work. So I'm quite turning into this weird, like, dystopian sort of comic book reader.

This quote indicates that while nonfiction is common among Silicon Valley readers, Kimmel personally has taken an interest in comic books related to the future of work, suggesting a unique approach to understanding work trends.

• Brienne Kimmel discusses her desire to integrate historical insights, like those from Black Wall Street, into the future of work.
• She sees potential in tech-enabled, venture-backed businesses to create platforms for black entrepreneurs.
• Ethel's Club is highlighted as an example of a modern platform that can lead to the development of great businesses.

And I do believe that we can take these insights from places like Black Wall Street. We can apply it to what are the programs and infrastructure and companies to be built around this?

The quote reflects Kimmel's belief in learning from historical examples of entrepreneurial ecosystems to inform current and future initiatives in the tech industry, particularly for African American entrepreneurs.

• Founders should focus on building relationships with potential investors, especially between Seed and Series A funding rounds.
• Selecting a board member is a critical decision, and founders should take advantage of the current investor climate to evaluate potential board members through working sessions.
• The relationship with a board member is long-term, and founders should consider the partner's network, future funding rounds, and hiring.

Choosing your board member is no easy feat. I highly encourage entrepreneurs to really keep in mind that at this moment in time in the tech ecosystem, investors are on the sell side.

This quote emphasizes the importance of the founder-investor relationship and the strategic approach founders should take in selecting board members during early funding stages.

• Kimmel is focused on understanding the causes of underemployment and exploring new classes of work that can be accessed remotely.
• The trip to Tulsa highlighted forward-thinking programs like Tulsa Remote, which supports individuals in various life stages to access technology careers regardless of location.
• Silicon Valley's ecosystem is dense with learning opportunities, but it's important to consider how work and personal life can be integrated, especially through remote and distributed work options.

I'm very mindful of the power and impact that technology has on everyday people.

This quote demonstrates Kimmel's awareness of the broader social implications of technology on work and her commitment to addressing challenges such as underemployment through innovative work structures.

• Kimmel disagrees with the traditional notion of mentorship, suggesting that a mentee may rely too heavily on a single perspective.
• She advocates for building a community of like-minded peers and learning from individuals outside one's direct industry.
• Drawing insights from different sectors can lead to greater learning and career acceleration.

I often find with a mentorship relationship, I think that oftentimes the mentee is typically over indexing on information and inputs from one data point.

The quote challenges the traditional mentor-mentee dynamic and encourages a more diverse approach to seeking guidance and learning for career advancement.

• Brienne Kimmel's most recent investment is in a company called Pace, which offers flexible payment options for SaaS companies.
• Pace's model allows sales reps to close deals faster and offers financial teams a streamlined process for invoicing.
• The investment in Pace is based on its potential to change how software is bought and sold, providing more accessible financing options for startups.

Pace enables SaaS companies to offer flexible payments on annual contract while getting paid upfront so there's no debt, no payment risk.

This quote explains the value proposition of Pace and why Kimmel believes it is a game-changing model for the software industry, highlighting the innovative approach to SaaS financing.

• Harry Stebings expresses excitement for Brienne Kimmel's future endeavors with Work Life.
• Kimmel and Stebings conclude the episode with mutual appreciation for the discussion and the insights shared.

I absolutely love doing that episode with Brienne.

Harry Stebings's quote reflects his positive sentiment towards the episode with Brienne Kimmel and his anticipation for her future contributions to the tech ecosystem.