Gold Coins In front of Stock Data

Meet a VC: Stephen DeBerry

1. How did you get your start in the venture capital community?

I’ve always been on a unique path. I was a classically trained linguistic and cultural anthropologist but I applied traditional social theory to urban culture, like Hiphop. I’d always been an entrepreneur though. I started my first business selling used golf balls when I was 9 and kept building new and bigger businesses as I got older. When I was in graduate school I would go to class during the day and then ran a web development business late through the night while it was still the business day in the United States. I was eight hours ahead at Oxford University (the literal definition of old school) so the contrast between my daytime life as an academic and my nighttime life on the Internet as an entrepreneur was stark. That contrast helped me see just how deeply technology would impact all of us, eventually, and that some of us would benefit sooner and more than others.

I could see the opportunity to use business and technology to improve lives across the many communities I’d been thinking about as an anthropologist, including my own. That realization prompted me to switch my aspirations from earning a doctoral degree and becoming a professor to sit for an MBA and focus on using business to improve society. After school I had a quick stint in Australia starting a juice company (fun story — details another time.) I ended up moving to Silicon Valley to work for Microsoft co-founder, Paul Allen, as a business development guy in the late 90s. I cut my teeth looking at licensing deals, joint ventures — I even went through the process of raising venture capital and got more operating experience running a spinout company for Paul. My first role as an investor was with Omidyar Network, which was perfect for me because I got to invest with a focus on social impact. I later became a partner at Kapor Capital for several years before starting my own firm, Bronze Investments.

2. What’s a day in your life as a VC like?

Exhilirating. Volatile. Inspiring. Unpredictable. Educational. Emotionally-exhausting. Totally fulfilling.

I feel like I have two really big jobs — being a dad and being a VC — so every day is a balancing act. I start each day by meditating, taking my two girls to school and then I hit the gym. Once my mind and body are prepared I transition into a very tightly scheduled gauntlet of activities that vary between learning about new companies and categories, researching markets and people; fielding founder pitches, and doing whatever it takes to support my portfolio companies. I always tell my portfolio companies “I want to lead the league in assists,” whether that’s making a key introduction, giving product feedback or helping recruit employees. Every day is an adventure and no two are the same. It ain’t always easy, in fact it’s rarely easy, but I totally and completely love what I do.

3. How many companies have you invested in and what is your overall investment?

I’ve learned a lot after working on over 80 deals in my career. No two are the same. Most are venture equity deals, but I’ve also worked on debt; real estate; mergers and acquisitions; even grants, which are an under-utilized financing tool in my opinion. You end up doing a lot in the course of building a company, so it helps to have as broad a toolkit as possible. Having options is always valuable.

4. What stage do you focus on and how much capital do you look to deploy for each portfolio addition?

I mostly invest in brand new startups: seed and Series A deals. My typical initial investments range from $250K to $2 million and I can follow on with bigger checks as my companies grow. I’m flexible. I prioritize strategic alignment and deal quality over check size. I’m trending towards bigger checks and fewer deals, with more engagement.

5. What matters to you most when evaluating a company as a potential fit for your firm and how does that relate to the ambitious companies that you have worked with in the past?

Balancing financial returns and social impact is the critical balance for us at Bronze. I solely back companies that make money by doing good, especially in Eastside Communities. I’m very focused on the city of East Palo Alto in the middle of Silicon Valley. The history of Silicon Valley will be judged, in part, by whether that community is included in what is arguably the largest wealth creation event in human history. You may not know this specific city, but you’ll intuitively understand what I mean by Eastside Community when I tell you the story of East Palo Alto is, broadly writ, the same story as East Oakland, East LA, East Baltimore, East Detroit, East St. Louis (near Ferguson), and on and on.

These communities are so similar because they are artifacts of the same systemic challenges. They have been designed to be on the social and economic margin through our history of legal segregation, wack infrastructure planning, bad transportation policy, redlining and related forces. There’s no question that we designed ourselves into this mess. We can design ourselves out of it, too. Bronze exists to provide the capital and support to entrepreneurs who can help us design meaningful new products and services that improve lives of every day people, everywhere, including the Eastside. The beautiful thing is we can do this profitably and sustainably.

I’m excited about big challenging categories at the intersection of community and technology. I see a lot in health, education and financial services, but there are many more categories to be remade and invented. And the good news is some of the most highly skilled and experienced entrepreneurs are starting to focus on these Eastside communities. They’re no dummies. Some of the biggest opportunities lie there, where few others are looking. We are in a very challenged, but also very exciting moment as a society. This is what growth and progress feels like, and we are all sitting in the front row, right next to the steps to climb on history’s stage. This is a special moment.

6. What differentiates your firm in the way you add value to the startups you invest in?

Two things are different about Bronze: 1) we think we know Eastside Communities better than most, so we’re in a strong position to help founders position products, gain customers and solidify market positions there, and 2) we strive to help protect founder ownership by being smart about financing beyond venture capital, which isn’t the right mechanism for everyone all the time. Sometimes it also makes sense to think about debt, grants and other tricks of the trade that keep more dollars in founder and employee pockets. Who doesn’t love that?

7. What has been your favorite startup to work with and why?

I love all my companies. I learn from them all. I have to say, though, I’m really having a ball with one of my newest companies, LocoL, which is revolutionizing fast food. They opened their first store in Watts, a community that has been on the economic and social margin since before the riots there in 1965. Today, some people are driving from a couple hours away for the unique food and experience there at LocoL in Watts. We have a shot at helping to revitalize the community there and adding another important proof point to that Eastside investment thesis.

I also think it’s important that an investor who looks like me lead that particular deal; for people in these communities to see images of themselves as the leaders of a new economy. I’ve worked my tail off to get into position to be able to do that. We’re not just changing food. We’re changing what the venture and startup industries look like, and the way we all think about the role of businesses in our neighborhoods and in our world. We plan to open many more nationally. Watch out for it.

8. What advice do you offer to a first time founder?

It’s best to start a business that’s who you are, not what you do. Work on the one thing you can’t not do. Building a great company is so hard that if you’re not irrationally passionate about your business you will quit.

9. What is the one common denominator that stands out to you across all great investments your firm has made during its history?

Quality teams win. Many investors would answer this way. That’s because it really is true. I’d be doing founders a disservice to try to say something unique here. I’ve seen companies with a stellar management team fly high with a mediocre product that later became great. Conversely, I’ve seen some amazing ideas go down in flames because the company didn’t have the management horsepower to adapt to markets or continue hiring high quality teams. High integrity, relentless, insatiably curious, adaptable, domain experts build great companies. Full stop. Damn, I love a good team.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.