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The pandemic has changed everything, including the enterprise tech and startup landscape. And just like enterprises that are relying on data more than ever before, Valor Ventures has been collecting data to track the changing landscape. In particular, the investor team has been talking to early founders about their use of emerging technologies and how they’re approaching their businesses and investments.
The firm, which focuses on seed-stage startups, is based in Atlanta, Georgia, which founding general partner Lisa Calhoun says “creates a real melting pot of ideas.” And most notably, she’s noticed founders aiming for a “double bottom line,” where they’re both profitable and having a positive impact on the world.
To learn more, VentureBeat chatted with Calhoun about the role of big data in today’s changing startup landscape, other high-level trends she’s observed, and what has her most excited these days.
This interview has been edited for brevity and clarity.
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VentureBeat: If you had to sum it up, how would you describe the current startup and investing landscape around enterprise technologies?
Lisa Calhoun: Exploding. Enterprise technology is in a next wave of development, and we’ve been seeing that AI tools, thinking, and infrastructure are really starting to change the level of transparency that an enterprise can use to function. And so companies are leaner and stronger than they’ve ever been before. And you add to that the fact that a pandemic is enforcing new layers of digital transparency across every horizontal process — from hiring to everyday work, transitioning in and out of a company, and the basic processes of how to track what’s getting done by whom. So it’s a super exciting time to be a seed stage investor. And anytime there’s a lot of disruption, as there certainly is now globally, there’s a lot of money.
VentureBeat: And of course the pandemic has only accelerated digital transformation, and by seven years, according to Gartner. So it’s been very fast moving, as you said. What role would you say that big data specifically has been playing, and how do you expect this to evolve over the next few years?
Calhoun: What’s so interesting about change — and it’s true in big data too — is that it’s not linear. For several years we were in sort of a plateau with incremental improvements around how organizations use their data. And now, because of the pandemic and response to the crisis, we’re in a complete change around how important it is for data to be more accessible, visualizable, and actionable in real time across the organization. And that’s exciting. So it’s kicking off explorations into things like how we can use data in FinTech, on the blockchain, and in security so that companies are more resilient and sustainable than ever.
I’ll point out one more thing we find really interesting, and that’s the interplay of climate change and big data. You see organizations needing to respond to legal compliance at the very least, if not a moral imperative for climate sustainability. And that’s also driving an urgent level of data transformation.
VentureBeat: What are some other high-level trends you’ve seen emerging lately?
Calhoun: Well, one of the biggest trends — which is so obvious that people don’t think to talk about it, even though it is a fundamental change — is that the demographics of the United States have now just made the curve around a majority-minority in almost every urban core. That’s certainly true for places like Atlanta, Boston, Los Angeles, and it just keeps going. And so, we are now an urban majority by origin culture, and the same dynamism that has driven things like music and athletics in this country is now capable of driving the culture and creating an opportunity for all. What I think is most important about that is that because of this demographic transformation, we are on the cusp of one of the largest opportunities ever for net new wealth creation in populations that have historically had a lack of access to capital and wealth creation opportunity. And it’s going to be transformational in our culture.
VentureBeat: That’s great. And when you see new startups popping up and raising funds, what are the main kinds of challenges they seem to be solving for or facing themselves?
Calhoun: My team has talked to several dozen founders, and we track all of these conversations in fair amounts of detail in our CRM to Salesforce, which allows us to actually query our data and look at these trends. This is a regular process for us, and one that has caught our attention recently is how hard founders say it is to find the right seed-stage investor.
This is because we’re in this time of unprecedented disruption, yet many if not most of today’s venture capitalists were raised and invested in periods of greater stability. The vast majority of VCs remain white male investors in a time when all of our cities are minority majority, and the environment is a lot more important to today’s founders than it was even 5 or 10 years ago.
Today’s founders are looking for values alignment and leadership and want investors who really understand what they’re trying to change in the world and why it’s broken. They want investors who are really close to the founder perspective, have operating experience in a multicultural economy, and share many of the same values that the founding team does around issues like climate change, inclusion, data privacy, and other truly frontline issues in technology today. So there’s a bit of a cultural disconnect between many of today’s best founders and a lot of early-stage venture capital. And I think we’ll see that trend continue for several years until we reach a new normal in venture capital.
VentureBeat: That’s really interesting, and I see how it reflects the more broad cultural shifts. Now, are there any evolutions in enterprise and data tech that you’re particularly excited about these days?
Calhoun: One of the things I’m most excited about is the specificity in health care that’s been unlocked by genomic SaaS platforms. Earlier this year, for example, we led the seed round for a company called Allelica whose platform is used by labs to help match a drug to your specific DNA. So your physician is able to choose the drugs, out of the many drugs on the market for your issue, that will match you and your genome the best. The genomic SaaS environment is just really exciting, and to go another step further, the way today’s health care technology founders are democratizing health care is so inspiring. And we’re seeing pitches on a weekly basis for things that you wouldn’t have thought could exist but indeed do exist, are trying to grow, and quite literally save the world. These founders care about a double bottom line, and it’s very clear in their business models and how they treat employees, but also the products that they’re building.
VentureBeat: And that goes back to what we were saying before about founders looking for investors who are aligned with their values. Now before we end, do you have any predictions for what the next few years will look like?
Calhoun: My whole team believes the next trillion-dollar market cap company is going to be built on the foundation of a diverse and inclusive world. It’s not going to be a nice-to-have; it’s going to be core to how the product is built in terms of its data structure, data privacy, leadership, and vision of the company. This is what the United States truly needs from a cultural and demographic level. And that’s where the future is.
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