Office Hours: I was an early stage investor at General Catalyst where I invested in Grammarly, Livongo, Stripe, and Gusto. I'm Megan Maloney.Featured
Hi! I’m Megan Maloney, former early stage investor at General Catalyst and currently starting my MBA at Harvard Business School. At General Catalyst, I worked on our investments in Grammarly, Livongo, Stripe, Gusto, O(1) Labs, Audius, Bitwise, Coda, Pulley, Samsara, Mindstrong and Commure, among others and was a board observer for many of these companies. Prior to General Catalyst, I worked in technology investment banking and sales and trading at Morgan Stanley. My coverage included Workday, Ancestry, and ServiceNow. I have a bachelors degree in economics and music from Columbia University. Ask me anything about multi-stage investing, supporting startups, being on boards, transitioning from banking to VC, the MBA experience, or anything else!
Thanks so much for joining us @Meganbytes94!Elphas – please ask @Meganbytes94 your questions before Friday, September 11th. @Meganbytes94 may not have time to answer every questions, so emoji upvote your favorites 🔥👍🏾➕
Thanks Elpha for having me!
I’d love to learn more about how you made the transition into VC and why you decided that now is the right time to go for your MBA. What do you hope you do post-MBA? Excited to learn more about your journey- thank you for sharing your story.
Thanks for the question! Prior to VC, I was in investment banking at Morgan Stanley. I was a little unique at that time, as I transitoned from sales & trading to tech banking (I loved tech and I wanted some quantitative experience). VC was a long term goal of mine, but I thought I needed to have a successful exit before I got a role there. The good news is, companies are staying private for longer, so a lot of VCs have relationships with investment banks. I studied up on market trends, had a few high profile clients, and became an 'expert' (relative term) in a few topics. That's how I got recommended into venture capital. I'm the type of person who is never comfortable with being comfortable. After being in VC for 3 years, I decided now would be a good time to take a step back and pursue my MBA, which has been a goal of mine for years. More details to come on why at a later time!
Hi Megan. As a board observer and member of various companies. What are the clear inputs expected from a board member to its startup? On the flipside, how can a startup reward its advisory board members?
It really depends on the stage. If an advisory board member is VERY impactful to a founder, then advisory shares would make sense at the early stage. Sometimes, advisory board members are 'awarded' by association with the company as it scales and becomes a large brand. Every board member offers different skillsets based on their background. That's why startups often have 2+ board members. General inputs though are: advice on fundraising (when, how, from whom), hiring, scaling into other geos and how to scale without ruining the culture, pivoting / finding product market fit, connections and introductions to potential customers, and general pulse on the landscape (competition, etc)
How do you know when your start up is VC ready? We launched, have steady traction, however to get to revenue, we need a sustainable runway. We an investors who want to come on board as a partner but will only be funding 1/2 of what we need for 30% equity. We are not comfortable giving away so much equity so soon. What do you recommend?
Great question! How much traction you need depends on where your startup is located and what vertical you're tackling. For example, a food delivery startup (lots of competition) would need to show a lot more traction than a startup offering a new way to diagnose and treat people with depression (less competition). Essentially, your valuation will be a reflection of risk that VCs need to take. The more you can de-risk before raising, the more power you will have in terms of equity negotiation. Generally, 10% week over week growth is good traction-wise.Overall, 30% is A LOT to give up so early on. I'd say <25% is the norm for your first round. If you don't love the VC who gave the offer, see if you can leverage the term sheet to attract others on better terms.
Hi Megan, I have a Bachelor in Business Administration and have been working in the Berlin startup scene for the last 6 years. Now I'm thinking about switching my career from product management to VC - have you seen successful transitions of this kind before? And in your opinion, what things should career-switchers look out for? Big thanks in advance!
Yes! All the time. Product managers have great backgrounds as startups need advice on company & product building. Check out #ANGELS and All Raise for some inspiration on women who have transitioned from operating to VC. Angel investing (if you can) or becoming a scout for a VC fund are really good ways to make a name for yourself and get to know other VCs.
Hi Megan, Thanks for taking the time to answer our questions. I am interested in breaking into VC and looking at associate positions. I'm a former lawyer, CEO & Co-founder of a digital health startup - I want to use what I have learned from my health startup to help diverse founders in digital health. I'm truly passionate about health equity for all, particularly women's health. I have a deep understanding of patient engagement and expertise in data policy and privacy.What is the best way to present myself as someone without a financial analyst background or experience in private equity? Top skills I should work on?
You're a co-founder of a digital health startup with a unique background in law! See what I did there? :) Leverage that to chat with a few VCs who focus on digital health. Try to get warm intros if you can, but if you can't, do some writing on digital health trends and build a community / following, or send VCs startups that you are advising (hint: you should start advising).
@Meganbytes94 - no question just want to say you keep crushing it Queen! I am so proud/happy to read about your background :D
Hi Megan! Wondering if you can share insights into what gave you confidence in the investing decision around Grammarly. Any thoughts on how their go to market strategy helped them succeed?
Grammarly had actually bootstrapped their way to ~7 million users before GC originally invested (that initial round was led by my partner Hemant Taneja). The thesis was simple: Grammarly has the opportunity to transform the way that people communicate. The founders & CEO are incredible at go to market strategy and their insights are 'the secret sauce.' It's a ubiquitous product powered by AI, operating on a freemium model. Last year, their CEO wrote a great post about where the company is heading: https://www.grammarly.com/blog/90-million-funding-round-2019/
Hi Megan, my name is Veronica Zhai and I’m curious to learn more about the intention behind each of your career milestone. - What motivated you to move from banking to VC? - What makes now a good time to take a break? - What do you hope to gain from a HBS experience? I have a lot in common with you (studied Econ/stats/dance at Columbia, started off my career in option trading at JPMorgan, and now a PM in tech) - really respect your track record! 👍🙏🔥
Hi Megan! Thanks for your time! Would love to hear your thoughts on the pros and cons of investment banking, in terms of the transition to VC? What skills in banking have been most helpful in your career as an investor, and conversely, what skills do you wish you had more opportunities to develop? What skills/habits, if any, that you developed in banking that you’ve had to unlearn in VC?Thank you!
Hi @Meganbytes94 thank you for offering your time and perspective this week! I am interested in learning more about communicating my value proposition to potential VC employers. I am also getting my MBA and I am pivoting from operations/strategy roles to VC. What skillsets/value-add propositions have you found to be impactful when looking at people breaking into the industry?
Hi Megan, thank you for taking the time to share your story and advice with the Elpha community! I am interested to know what guides you when you are thinking about your next career decision. What do you look for in a new role - an opportunity to learn a specific skill you want to add to your toolkit, the chance to work with a specific mentor, etc?
@Meganbytes94 Your background is amazing and I see that building professional relationships must matter a lot to you. Right now clients hire me to find collaborations that look like being featured as a guest expert on podcasts, virtual summits, and the like. My question is this: How can this skill add value to startups founders who are building a reputation in a new industry? I find that many startups focus on paid traffic vs building intimate business relationships at scale by way of being featured as a guest expert in front of decision-makers. In short, do you have any tips on how I can better educate startup founders on this under-utilized method of quickly building deep professional relationships?
Thanks so much for sharing your background and career path! I’m wondering how you made the transition from Sales and Trading to Investment Banking at MS. I’m currently working in Markets and would love to make the jump. Do you think it was necessary to move to banking to ultimately break out into VC?
Hi Megan; first thanks for doing AMA. My ? as a serial Entrepreneur & non-tech founder of a tech startup is, everyone is look'g for CTO's (startups and reg co's). How can great Entrepreneurs get funded when they can't even find the tech talent they need to get an MVP tested? I went to a pitch night at a local Acceoerator and 80% of the people were look'g for tech co-founders to code their MVP's for sweat equity. Tysm.
Hi, Megan, pretty impressed on what you have accomplished so far and yet still managed to look for ways to grow! I'm also interested in what made you decide to pursue a MBA and what's the plan post-MBA? From your VC experiences, what have you learned is the most important metric on evaluating startups?
Hi. My spouse is thinking of taking a leadership job at a startup and we are wondering about the best way to evaluate the companies potential. He would be giving up equity in a publicly traded company so it would be a big drop in actual income for us. Not to mention the medical insurance is terrible compared to his current company insurance. They’ve offered to let him speak to an investor but what questions should he ask? Thank you!
Hi Megan,Thank you for such an informative, insightful thread. I'd love to connect offline. As a startup attorney who represents early stage companies, it's always helpful chatting with investors to bolster the guidance I provide clients.If you're interested/available, feel free to message me.in any case, wishing you all the best!