Investors' interviews8 Dec 2023 2:08

Investing with Purpose: SoGal Ventures’ Journey with Pocket Sun

by Gauri

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Established in 2016 and headquartered in New York, SoGal Ventures is a venture capital firm dedicated to early-stage investments in diverse founding teams, operating in both the United States and Asia.

As a women-led venture capital firm, SoGal Ventures’s investment philosophy revolves around identifying and supporting world-class women and diverse entrepreneurs to build billion-dollar businesses. The firm actively seeks out underrepresented founders from undercapitalized geographies to tackle underserved problems.

Pocket Sun, the co-founder and Managing Partner of SoGal Ventures, has designed these endeavors to benefit people, society, and the planet with an aim to shape a future where innovation intertwines seamlessly with societal and environmental impact.

Specializing in pre-seed and seed rounds, SoGal Ventures supports a talent pool of women and diverse entrepreneurs, propelling innovations that redefine the future across various facets of life, work, and well-being for the generations to come.

In this exclusive interview, we learn about Pocket Sun’s insights, experiences, and the vision that shaped SoGal Ventures. This article offers a rare glimpse into the strategies, philosophies, and milestones that have made SoGal Ventures a driving force behind the next-gen billion-dollar businesses.

Background

Pocket Sun’s journey in the investment industry has shaped her into the leader she is today. She created the SoGal community in LA, one of the largest global networks for women entrepreneurs and investors.

Partnering with Elizabeth at Stanford, they addressed the stark gender imbalance and inequity in the VC industry. The establishment of SoGal Ventures in 2017 marked a turning point, and since then, they have invested in 150+ startups worldwide, including nurturing five $1B+ unicorns from their earliest stages.

The Vision Behind SoGal

“I met my co-founder at Stanford when we were both exploring venture capital because of the imbalance and inequity we felt. We both started investing right after and decided to partner to build something that breaks the status quo of the VC industry.”

Looking back at SoGal Ventures’ unique focus on women leadership and diverse entrepreneurs, Pocket emphasizes how they began the journey into the venture capital scene.

“In the past eight years, the percentage of funding that goes to women entrepreneurs has consistently been around 2%. When I first discovered this, I felt I had to do something about it because it was a universal pain point felt by women entrepreneurs in the SoGal community. I couldn’t NOT do something about it,” she adds.

The universal pain point experienced by women entrepreneurs in the SoGal community drove her to take action, shaping SoGal Ventures into an institution committed to reshaping the VC narrative.

Challenges and Opportunities in Diverse Ecosystems

SoGal Ventures’ global expansion has not been without its unique challenges and opportunities. As the SoGal community spreads across six continents and 50 city chapters, Pocket highlights the richness of diverse local ecosystems.

“These diverse local ecosystems teach us so much. They sometimes have amazing ideas that we would never think of on our own. It’s truly awesome that the SoGal mission has resonated with these young women around the world who want to bring change to where they are.”

However, managing a tiny team across the globe presented challenges in terms of diligence, compliance, and legalities, leading to a strategic refocus on the US and Canada with Fund II.

“In a highly divided global cultural environment, differences could become sources of conflict. We always try to stay true to our mission – to redefine and empower the next generation of diverse entrepreneurs and investors – respect the differences, and find alignment on the bigger vision,” she further added.

Trends and Developments in Core Sectors

Key Sectors for Pocket Sun:

○ AI, LLM and AI Agent will revolutionize how work is done. We need to take a philosophical look at how this changes the nature of our work and the content we interact with

○ Healthcare experience will be more like a consumer-grade, tech-enabled product

○ Healthcare will have to respond to the climate crisis

○ Future of brands will be co-created by its customers and fans

Diversity as a Driving Force

Diversity, particularly women’s leadership, is a cornerstone of SoGal Ventures’ investment philosophy. Pocket sheds light on the competitive advantage that diversity brings, emphasizing the importance entrepreneurs place on their cap table and the investor-founder relationship. Understanding women founders, investors, and consumers better, SoGal Ventures boasts a 97 Net Promoter Score, providing unparalleled support to its portfolio companies.

“Women leaders come in many different colors, and in general, they really care about the people they’re serving, including customers, employees and investors. They often are very hardworking, capital efficient, and insightful on the problem to solve.”

“In this more challenging market environment, our female founders are incredibly resilient, and our portfolio has stayed pretty much unhinged because female founders are experienced in swimming in tough waters to begin with. Their companies are usually more fairly priced, too. They are more humble and collaborative – we had almost never seen major issues motivated by ego.”

Startups often grapple with balancing short-term financial returns and long-term growth. SoGal Ventures, as patient value investors, encourages mission-driven founders to authentically and strategically optimize their short- and long-term goals. Pocket underscores the imperfection and risk inherent in startups, emphasizing the role of investors as allies, therapists, and bridges to guide them through challenges.

Women Entrepreneurs supported by SoGal Ventures. Picture Credits: SoGal Ventures

Supporting Women Entrepreneurs

Pocket shares insights into common challenges for women entrepreneurs in the fundraising process, citing the lack of capital confidence and prolonged fundraising timelines. SoGal Ventures aims to address this with Fund II by writing bigger checks and leading deals for early-stage founders.

A recipient of numerous awards, including Entrepreneur Magazine’s “100 Most Powerful Women,” Pocket views these accolades as not just personal inspiration but as tools to attract like-minded investors and encourage others to join the movement. The awards serve as a testament to the impact of SoGal Ventures’ mission.

Pocket Sun envisions closing the diversity gap within our generation. Since day one, her mission has been to redefine and empower the next generation of diverse entrepreneurs and investors.

Final Thoughts

Beyond her impressive professional achievements, Pocket’s vocal stance on workplace issues, such as Alibaba’s workplace sexual harassment problem, speaks of her commitment to social issues. A passionate snowboarder, she finds solace and joy in activities outside the investment world.

In Pocket’s own words, “Everything today is history in the making. There’s so much potential for women entrepreneurs and leaders yet to be explored, and trust me, there’s plenty of money to be made here.”