Addie Lerner (@addielerner) is Founder and Managing Partner of Avid Ventures, an early stage venture capital firm investing in exceptional founders building transformative fintech, consumer internet, and software companies. Prior to starting Avid, Addie worked with investments at General Catalyst, General Atlantic and Goldman Sachs. She was named one of NYC Fintech Women’s “50 Inspiring Fintech Females” in 2020 and was featured in the 2019 Forbes “30 Under 30” Venture Capital list.
To hear Addie's other interview on how she launched Avid Ventures click here.
Chapters
- Company culture at Avid Ventures
- Addie’s strengths of authenticity and an analytical mindset
- Investing as a privilege
- Addie’s daily habits of limiting the number of meetings each day, working with a coach, and exercising
- Addie’s favorite learning experience
- Addie’s definition of success
Key Takeaway
Addie’s habits and routines push her toward her own vision of success:
“My definition of success is making an impact on the world and those around me—my immediate family and community. And for me, that hopefully means showing up in multiple different capacities as an investor, as a partner, as a family member, being my best self and really helping to up-level the folks around me.”
“I think this whole job is such a privilege. When you zoom out, you get to work with and spend time with the smartest people in our industry—in the world—on a daily basis. You get to explore brand new ideas and industries.”
Transcript
Daniel Scrivner:
Switching over to the kind of personal side of the equation, I wanted to start first with, I think you're obviously in a very interesting position in that you've had this deep experience at a number of different top tier firms. You then go out and found your own firm. I know that a part of that is obviously, you're now in the seat with your partner of deciding things like, what's the culture we want to have internally in terms of how we work together? What's the culture we want to have externally when we work with the companies that we've invested in or in meeting and diligencing? Talk a little bit about how you've thought about that and how you think about what is super important to the two of you about getting right at Avid.
Addie Lerner:
This is something we've put a lot of thought into because it was a critical piece of why I wanted to start a new firm. It's a critical piece of, when I was sitting there at GC and not planning to start a new firm, but thinking about, "Okay. Someday, if I did, this is what I think I would do differently." I've had the privilege of seeing a lot of different firms and cultures during my career and sort of wanting to pick and choose the best of them, but also seeing things I didn't love that I wanted to innovate on. A lot of it had to do with culture. First things first, I think you have to really love the people you work with. It doesn't mean they have to be your best friends, but I think you just have to have a really stellar working relationship. I'm incredibly fortunate to have that with Tali.
Addie Lerner:
That's why, as we sort of bring on or look to bring on our third teammate, we think that personality fit, we think that working style fit is going to be so critical for us, especially as a small team. I think a key part of our culture will be, even as Avid hopefully grows and gets bigger and raises future funds, and grows the team to really remain quite lean and horizontal. I think bureaucracy and growth for the sake of growth can really be a culture killer and it's the fastest way to lose your best and brightest and upcoming talent. Because with size, just ultimately comes hierarchy and process. That's the, I think, fastest way to stifle innovation and to stifle the development of younger talent. One thing that's really important to me and Tali, even though she is relatively younger in her career, is just remembering what it was like to be in some of those situations when I was like, "I'm going to do this differently."
Addie Lerner:
I'm not always perfect at that, but I've really tried to create, in our processes and in our culture code, in our set of values elements that I think will create a very different kind of internal culture. Where younger and junior talent is really able to thrive.
Daniel Scrivner:
That's incredible. I wanted to ask as well too ... That last question was obviously focused on how you kind of operate internally. Now, switching over to the kind of founder side of the equation, something I was curious, and this again is somewhat of a shot in the dark because I don't know how much you've thought about this or maybe in these terms, but I'm curious when you're meeting founders, when you're deciding what founders to invest in, how do you think about non-negotiable traits or characteristics? Those could either be things where you're like, it could be on a personal level, it could be on a values level, it could be on how they engage with you as a potential investor. Somewhat broad question, but kind of curious if there's anything there that's interesting.
Addie Lerner:
We think about this a lot. Just taking a step back, actually the founders are the number one reason we're going to invest in a company. That's why we talk about not just our portfolio companies, but our portfolio founders. Even on our portfolio page, it's the founders faces there-
Daniel Scrivner:
I love that.
Addie Lerner:
... are bigger than the logos. For us, we think a lot about the framework of what we're looking for in a founder. Enough guidelines that we have sort of a great framework to evaluate folks on, but broad enough that we're never typecasting and that we're never sort of going to miss phenomenal talent because they don't sort of check exactly our boxes. The fifth or five sort of pieces of our framework is basically, is this a good person? To us, that means a number of things. One, is it someone who just has incredibly high integrity, is transparent, who we can trust and nothing sort of fishy is ever going to go on? Are they someone who people really enjoy being around and working with? That also comes into play answer of the, are they a talent magnet point? But it's more important of just, do people really respect them and want to work with them? Then also an element of it is, what are interactions like when we first meet the founder?
Addie Lerner:
Are they sort of the founder who's very full of themselves who feels like he or she are doing us a favor by getting on the phone with a brand new firm? Or are they someone who are truly sort of eager to get to know us, especially if it was through a warm introduction? A lot of the early relationship with the founder, we sort of evaluate and think about, is this someone we want to work with? Is this someone we want to spend time with, and where we think that our help and value add is actually going to be valued? Another big piece of this is loyalty, both for just we think it's a really important trait in a founder and in someone you're going to back when there's probably a decade of work ahead of you.
Addie Lerner:
Also for our investment strategy, is this a founder who, when we're super explicit and upfront about our intention and hope to put a much bigger check into the next round, is this a founder who, even though it's not a contractual right, is going to say, "Yeah, if you guys do the work and earn that privilege as you talk about, I'm going to want you to do that and then deliver on it." I think there's a lot of ways you can sort of diligence that, look at how a founder is treating his or her insider investors in that round in which we're investing is often a good signal. But there's certainly been instances early conversations with founders where the business can be amazing, we think it's going to be an incredible company, but we just get a bad taste from the founder and we've passed. Then there's certainly red flags. Well, for others, they might be orange flags, but for us, an orange flag is a red flag. We'll certainly pass for those reasons as well.
Daniel Scrivner:
Just maybe one follow-up question on that. Every investor, whether it's explicit or not, has some sort of stack rank of like we're underwriting the person first, then the team, then the product. What does that stack rank look like for you, even just the top two to three kind of items in it?
Addie Lerner:
Are you asking specifically on the founder criteria or overall investment?
Daniel Scrivner:
No, I think just zooming out now if that's one of the things that you have to check a box on. It sounds like that's, at the end of the day, you're largely writing checks or at least a major input into that decision as the founder. What are the kind of second and third order things that are also important to you?
Addie Lerner:
It does really start and end with the founder so much. But that said, we're also looking for the sort of product. That for us relates to market. What's the need for this product in this market? Is this solving a real pain point? Is this a really big market opportunity for this product? Then that ties to our evaluation, of course, of like, what's the upside here? Is there a big enough sort of upside case? Then if those two sort of check the boxes, we also really care a lot about, is this a space that we either do have a point of view or perspective on, or is it one that we can get up to speed really quickly enough and sort of underwrite what we do know and don't know sufficiently to make that bet? Then finally, we're not totally evaluation sensitive, we do care about what the deal dynamic is. Then again, how that fits into what we think the upside could be and what we think a double-down check could come in to.
Daniel Scrivner:
I want to ask a couple of questions more just around you and the kind of habits and routines you have each day. You made one kind of point earlier that I loved. I don't know if you use the word superpowers, but you talked about knowing your innate strengths. I love when people use that language and think about things in that way, because I think for most people that's still somewhat uncomfortable. Is knowing both their strengths and their weaknesses, but being proud of those strengths and really leaning into those strengths. I'm curious, can you talk a little bit about your innate superpowers and how you've developed those and kind of shaped what Avid is in how you end up investing around those kinds of superpowers that you have?
Addie Lerner:
I'd say one is probably more qualitative and one is a little more quantitative. The qualitative one is, I think it's my authenticity. Which is the trait that I think underlies my ability to very quickly connect with a founder or a co-investor or an investor. That's so important because in this business you have what, these days of 30 minute Zoom to leave an impression?
Daniel Scrivner:
Very little.
Addie Lerner:
Yeah, very little. Personally, I think my sort of personality, well everyone's, but my personality, it shows up 2D on a 2D screen. I'm taking every in-person meeting now that I can, that people take with me. But I think it is that energy that I can bring to a first meeting. This is actually advice I give to folks who I think are still coming out of their shells or who are earlier in their careers, maybe worked at a large bank and are still finding their personality. Is I sort of give the advice of, "Okay, in a first meeting with a founder, just pretend you've known them for two months and you've already had four meetings. Like this is meeting five. How would you act?" I think it's such a good mindset shift to just realize that if you can sort of authentically act that way with someone immediately, they'll feed on those vibes and you can sort of skip all the small talk and get to know you and really test out, does this feel right? Not to get to know you phase, but the sort of deep relationship working relationship phase.
Addie Lerner:
I think it can also be just, I guess, come on strong in terms of really feeling like you know someone immediately. It can be kind of disarming and I think that that's helped me stand out a bit as an investor. Someone who's skipping the formalities, skipping the back and forth, but just jumping in with real meaty questions and feedback. That's one, and I think that's some of the micro examples of how it shows up. But I think that that ability has served me sort of in all elements of being an investor and now a founder myself. I think the other is my analytical framework and mindset. I take that to everything from investing and also decision points as we talked about. But I think my ability to be a real optimist and be able to see and believe the dream, but then also verify it and really analyze it and make sure I'm sort of poking holes and feeling comfortable with the downside, is also a real skill of mine.
Addie Lerner:
Then I had the last one, I mean, maybe this is a commodity, but it's funny people will often tell me this is a superpower of mine and I'm sort of like, "Yay, but it's table stakes." But I have to remind myself to pat myself on the back for it frequently is, I'm incredibly hardworking. It doesn't feel like hard work because of how much I care and how much I want Avid to succeed and my companies to succeed. But I will put in the hours and it doesn't feel like it because it's something that motivates me so much. That's something that I feel like I've just an insane privilege to be able to be doing what I love. That's something I encourage folks to try and find and make sure they feel in their careers too.
Daniel Scrivner:
I love those answers. I want to go back to something that you said, and maybe ask if you can elaborate on a little bit, which was that you still think, which I would agree is not typically the way people kind of think of it or approach it, that investing in a company is a privilege. That obviously if you're framing it that way, if you're thinking about it that way, you're going to approach it very differently. I'd love to explore a little bit of why and how did you get there, and why do you think that that's so different than how most people are kind of engaging?
Addie Lerner:
Absolutely. I'll take it back to, like I just said, I think this whole job is such a privilege. When you think about it and zoom out, you get to work with and spend time with the smartest people in our industry in the world on a daily basis. You get to explore brand new ideas and industries. You oftentimes get to do that over delicious meals and drinks that your firm is covering or paying for. It's a really privileged lifestyle. That said, it's shocking to me how candidly rude I think folks can be in this industry, and probably often without meaning to. Emails can go totally unanswered, follow throughs get totally forgotten. But the number of times I hear from founders, my own founders, that investors who seemed so interested a week ago, didn't just pass, but just ghosted, it's shocking to me. To me, that just comes back down to very basic manners. I'm pretty sure most folks in this industry were brought up with very proper manners.
Addie Lerner:
But there's something I think that gets perverted in the daily grind, in the 100 emails in your inbox an hour and candidly leaning into the privilege in a different way. When shifting from believing it's a privilege to get to do what we do to having an entitlement in it, that how you treat people in this industry, it's sort of you give yourself a pass for treating them not so well. That's something that we want to do very differently at Avid, both with our founders certainly and potential founders, but also just with our co-investors and with talent. Tali is often pushing me and sort of like, "But we didn't reply to that email of someone's cold email from the info@avidventures.com this week." Tali is like, "All right, Addie, there're limits to that mentality if you want to get anything done for sure." But we try and set those limits like at the very, very edge. We try and follow through on everything we promise founders. That's why I think it's been relatively easy to exceed expectations, is maybe because expectations from others have been so low to begin with.
Daniel Scrivner:
It checks out with my experience as well too. It seems like some people approach it very transactionally where if they're not going to get out of the transaction, then they just disengage and a switch gets flipped. I think there are others that are playing a different game. Maybe you could say it's a much more long-term game, approaching it a little differently.
Addie Lerner:
What's crazy to me is I don't think that those humans were raised as transactional humans. It's just very strange how this industry, I think can turn people into very transactional operators. The first thing is I think just having an awareness of it. When our mantra is that investing in a startup is a privilege to be earned, it really helps us remember every day how lucky we are to be doing this job and to be serving our founders.
Daniel Scrivner:
I love that. There's one question I always love asking people, and you might not think about it in these terms, but something I think a lot about is what are the things that I can do each day? What are the things I do each day that just helped me show up as my best self? I think especially in a job like being a venture capitalist where so much of the job is interacting with people, so you're really are showing up and someone may have a little bit of background or context, but not a whole lot. A lot of the business happens on first impressions and subsequent impressions. Are there a handful of things that you focus on nailing each day or doing each day that you think help you show up as your best self at work?
Addie Lerner:
Yes. I've had to evolve these and really focus on these, especially as I've certainly become a founder and fund manager myself, and then also as our portfolio has grown from zero to 14 very quickly.
Daniel Scrivner:
The different hats.
Addie Lerner:
Yeah, lots of hats. I'll say three really important things for me, and there's a lot I try to focus on. One is, I try and limit the number of meetings I'm doing in a day so that I can fully show up for whoever I'm talking to. I went through a few 12 back-to-back Zoom days and literally I couldn't visually focus on anything. I was fried. My EA and I, that's another one to get yourself ... An amazing EA who's really a thought partner. My EA and I sort of made a new rule and rejiggered my schedule so that I would have no more than six meetings in a day. If a meeting had to be scheduled on a day that already had six, we had to swap something out. At first, I was really guilty about the swapping out of a meeting or canceling on someone. But something my coach said that I realized was probably really true is, if you're not going to show up as your best self for that meeting, it's going to be a waste of the other person's time.
Addie Lerner:
They're better served by you showing up on a day that you can be fully present. That's one. I really try and create that time to actually do proactive thinking work and to really recharge so I can be my full extroverted self in those six meetings. Then the next one relates to my executive coach. I love working with my coach. His name is Tim Porthouse. I highly recommend him for anyone who wants to check him out. He has just upleveled me in ways that I hadn't realized would be possible. I joke, but actually mean it, Avid wouldn't exist without him or the work we've done because I really had to learn extremely fast a lot of new things I'd never done before. I had to take risks and bet on myself. What he does and what good coaches do, is they really help you identify your blind spots. The whole point of a blind spot is you can't find it yourself.
Addie Lerner:
I think having that sort of mirror held up to me constantly, having Tim push me to be my absolute best self, investor, fund manager, partner is a really critical part of sort of my weekly routine and really revisiting our homework frequently too. Then the last one I'll say is, this is really for my mental health, but working out. I really try and work out five times a week. Do it in the morning, it puts me in such a good mood and headspace for the rest of the day. I think it can be so hard. I don't even have kids yet. I can only imagine how much harder it gets to squeeze that in. But I look at it not just as a sort of indulgence or thing I need to be doing personally, but as a sort of investment in myself and being my best self, showing up as my best self for my founders.
Daniel Scrivner:
Great thoughtful answers. I want to ask you one more thing, which kind of relates back to approaching the job as a privilege and then making sure that you're dotting all those t's, crossing all those i's, just not letting stuff fall through the cracks. Which is just generally, how do you think about and/or do you have a system/ I'm sure your EA plays into a big part of it, but just managing all the things you have to do in a given day or in a given week. Any advice for other investors, other people there?
Addie Lerner:
Oh my gosh, so much advice and I'm taking all the advice I can get here. I have a few practical things and then I have just one bigger observation and takeaway. Actually I'll start with that because I think that's more interesting. This is something I've worked on with Tim recently, which is, as I started becoming the founding partner of Avid, I had to go through a career shift and a real shift in my mentality from, we call it Addie 1.0, where nothing could fall through the cracks. The reason I was so good at my job at Goldman and GA and GC was because everything got done. I worked extremely hard at making sure everything happened, was done very well and nothing fell through the cracks. The attention to detail was a critical part of my success. As Addie 2.0, as the founder and managing partner of Avid, actually, my job now is to let things fall through the cracks.
Addie Lerner:
My job now is to focus on what are the most important things in any given day, week, month, or quarter, and just focus maniacally and dedicate all of my energy and attention to executing those things really, really well. Then working with exceptional folks like Tali or EA Rebecca to help me make sure things don't actually fall through the cracks. Related to that, come some of the practical tips. Which are, every morning I have in my calendar and I use my calendar as my to-do list too, sort of that Cal invite or to-do item, which is, what are the three things that have to happen today. Those don't have to be the big picture, like discover the next multi-billion dollar category to invest in. Although I probably should have that on there more often than not.
Addie Lerner:
But it also could be things like repay the capital call line or the admin things that can't or shouldn't fall through the cracks. But by looking at it on sort of this daily basis and tying it back to my quarterly and annual OKRs and making sure that the three most important things I'm doing that day are more often than not helping me fulfill those quarterly goals, it's a really helpful way to remind myself to focus on what matters most and remember that everything else can and probably should be falling through the cracks.
Daniel Scrivner:
For anyone listening, I'm over here, just writing notes feverishly trying to remember as much of this as I can. I think this episode is going to create a lot of clips because there's a lot of amazing stuff here. Fantastic answer. I have two other questions that I ask. One of them is going to be kind of an easy soft ball. But one of my favorite questions to ask people is just for a favorite failure. That can be for you, an investment or a founder that you backed that it doesn't matter that it went to zero because you got so much out of being involved. It can be something in your personal life. But just something that for you, you don't view as a failure and that you've taken away a lot from.
Addie Lerner:
Man, I've tried to like lock all those away in a little box in my head.
Daniel Scrivner:
I'm sure.
Addie Lerner:
No, just kidding. They're part of personal growth. I'll talk about an investment that's been a tough one that was sort of at the point in my career to really sort of mentally approach or handle. That's our early investment at Avid in The Wing. The Wing is a company that I got to know during my time at General Catalyst. We looked at investing in the Series C that Sequoia led. I got to know the founders. They became really great friends and even actually started advising me as I built Avid. Then The Wing became our second investment in the fund three weeks before COVID hit. As a business that was at that point, revenues were entirely reliant on memberships for the physical spaces ... The Wing had 10 spaces in multiple geographies, including London at that point. COVID just totally shut down the business. It's been a very tough path for the company, and they ultimately took a majority investment from IWG, which is the parent company of Regus. Which is actually I think, a great partner for the business because they're going to help them expand the physical locations in multiple geographies.
Addie Lerner:
Coming out of COVID I'm personally quite bullish on coworking as a-
Daniel Scrivner:
Me too.
Addie Lerner:
... great enablement of remote work. I think community is more needed than ever. I've been super excited as The Wing locations have you been reopened in New York. The learnings from that experience and why I ultimately don't consider it a "failure" ... By the way, the company is still very much a going concern, so failure might be a bit harsh for this one, but it was a really tough one. As coming out of our first close, still having a lot of the fundraise to go, and already having a company that went from sizable revenues to overnight zero revenues and leadership challenges in the middle of that was really tough to face. But I'm extremely proud that right as COVID hit, Avid and I were able to get involved with the company. Actually their CFO was out on maternity leave at the time. I got very involved with the board and with the founders and the team on actually acting like this outsourced CFO and helping to lead a lot of the scenario modeling work, understanding what cash runway looked like, drawing down on the debt facility, just thinking about the various options.
Addie Lerner:
First of all, it felt very good to be doing something and to be quite helpful with the business. But it also was a really important lesson. I think being an investor is not just about when things are ripping and going really well, but it's about how do you show up? Do you show up, and how do you show up when things are really tough? My relationship with the founders remains extremely strong. I think it was a really good sort of case study for how Avid shows up when things don't happen as you think they will. My investors have been really fantastic about it because it's not all investments are going to work out and we all very much still believe in the original investment thesis and the potential of what The Wing is building. I'm excited to see what happens in the years to come.
Daniel Scrivner:
I think it's a great answer. Especially it also seems to me like you can clearly point to that story again, as, it's a reflection of the fact that you are investing and viewing investing as a privilege because you're a partner in that company. Even when things don't go well, that means you need to show up and support the team and know why you invested in the first place. Last question. What is your definition of success? Maybe this is something you've worked on with your coach. Maybe this has changed in this phase of life. It can be anything, but what is your definition?
Addie Lerner:
My definition of success is making an impact on the world quite broadly, and those around me, my immediate family and community. For me, that hopefully means showing up in multiple different capacities as an investor, as a partner, as a family member and being my best self and really helping to up-level the folks around me. I think my definition of success of having an impact at that highest level probably certainly stems from some of my earlier in life interests in public or international policy. How do you create change? As we started the conversation talking about, for me, I want to create as much impactful change as possible as quickly as possible. That for me was through the private sector and specifically through venture capital. That's why I think I can actually achieve success in that role. Obviously a huge piece, well, of some folks' definitions of success is financial success.
Addie Lerner:
I think that's very important to me too. I think anyone in venture capital would probably be lying to themselves if they said that making money wasn't important. Making money is important to me and a part of success for a number of reasons, but also because of I think what you can do when you do have a lot of capital. It enables you to do a lot personally and for your family. I'm part of a sort of generation or part of generations where every successive generation has been able to achieve what they've been able to achieve because their parents, the prior generation, sacrificed and really upleveled their own position sort of in society in America. Being able to give that on to my children is really important, but also what you can do philanthropically with capital is extremely important to me as well. Again, I just feel super lucky that I get to sit in this seat and seemingly have an impact already. But I have big visions for what success looks like and being able to do that in multiple of the ways I just mentioned in the future.
Daniel Scrivner:
That is the perfect note to end on. Thank you so much for the time, Addie. This has been one of my favorite interviews by far.
Addie Lerner:
Thank you, Daniel. You ask fabulous questions. It's been really wonderful to chat with you as well.
