Sharon Fay ’82: Welcome to Women's Voices Amplified. The podcast from Brown Women's Network, where we talk with Brunonian changemakers about making an impact in their communities and beyond. I'm Sharon Fay and I graduated from Brown University in 1982 with a Bachelor of Arts. In this episode, I'll be speaking with Lorine Pendleton, class of 1991, about her work as a business development executive, attorney, angel investor, and venture capital investor.
Let's dive in. I'm going to start, Lorine, with a question of, what is an angel investor? And how is that similar or different from a venture capital investor?
Lorine Pendleton ‘91: Thanks, Sharon. So an angel investor is someone who actually invests their own money in early and high growth stage companies, versus a venture capitalist who basically raises a fund, invests other people's money. They actually do put their own money in it as well. But you know it's typically larger money to play with and to invest with. So they actually have a fund that they're investing out of. So that's the distinction.
Fay: Okay. So then, what does a typical workday look like for you? And maybe you can comment on what that workday looks like today when we're all on Zoom versus what it looked like pre-pandemic.
Pendleton: So pre-pandemic, I had actually just launched a fund with some other people. A lot of it was setting up meetings and meeting with people in person. And then the pandemic hit. And then, obviously, we shifted our world to virtual. And so, with the virtual shift, it's actually been beneficial because I can have a lot more meetings with people virtually, and I've had access to people that I think I wouldn’t have typically had access to kind of pre-pandemic because I think there's a more openness to connect with people. So currently my typical day, because I have this fund, which we launched right before the pandemic, so late 2019. Now we're deploying capital that we raised. And so, a lot of it is meeting with entrepreneurs.
We get deal-flow, so people send us investment opportunities. Either entrepreneurs reach out directly to us, or people we have in our network will send us potential investment opportunities. That could be other investors. And so I'm setting up meetings with these companies. They'll pitch me and go through their business model. Also, I’m meeting with my partners of the fund to look at companies that we have. Do we want to invest in it? We perform due diligence on companies that we were considering investing with.
What that really is, is doing a deep dive on the company's financials: their business model, product-market fit, getting references from their customers, people they've worked with. So that's a lot of what I do. Also, much like this, there's been kind of profile-raising media, recording podcasts. I speak a lot at conferences, which have shifted now to virtual. So that's my day typically.
Fay: Is this where you thought you would be? Is this the path you thought you would take in your career when you were a student at Brown?
Pendleton: No, not at all. So when I was at Brown, I was a DJ on WBRU, which is the college commercial station at Brown and that was really a great experience. And I was majoring in economics, with a minor in computer science, and thinking I was going to work at a company like a Microsoft or one of those kind of tech companies that were early-stage at the time. And when I graduated I ended up joining a record label. Actually, I had an internship from a Brown alum the winter break before I graduated, and they really liked me, and they made me an offer. So it was Blue Note Records, which is Capitol Records. They're a jazz label. So that was my very first job out of college.
And I said, "I'm going to have a career in entertainment." And I ended up going to law school in the evenings so I could keep my entertainment contacts. And when I got out, I became an entertainment attorney. My firm, we represented really big artists like Prince, Chaka Khan, Stevie Wonder, which was just an incredible experience because I grew up listening to these artists. And then to represent them! And so that was really great. But this is around the late nineties, early 2000s. The internet had just really come out in the way that it is kind of more mass people adopting the internet. And I knew that there was going to be a convergence of technology and entertainment. And I took a risk. I left practicing law, and I joined an early-stage startup company where they were taking their technology and licensing it to entertainment types of companies and media companies.
And so, I took that leap of faith. And I did business development. They liked that I had entertainment contacts. I worked at a couple of startups. Happy to say two, which were sold and exited. Actually, one was a Brown alum, SelectMinds, and that company was sold to Oracle. And then I ended up going back into law firm life but on the business development side. And how I started investing is because I heard that less than 1% of black founders get venture capital. Now, remember, I worked at three startups. We were all venture-backed. I saw what it took to launch those companies and then to have a capital infusion to grow your company, it's really important. And just basically, if you only have 1% of African-American founders getting funding, they’re just so at a disadvantage. And so I said, I want to change that.
So I threw that out in the universe but I've never invested in a company before. Yes, I had startup experience and a legal background. So I say, "the universe conspired," because a few weeks after I'd made that decision to do that, I got this newsletter, and they talked about Pipeline Angels, which teaches women how to become angel investors. And I applied to the program, I got in, and that launched my angel investment career.
Fay: So it sounds to me like not at all a linear progression. But really following what your interests were and taking some risks along the way?
Pendleton: Absolutely. And I think for me my Brown education provided a foundation and taught me to follow your passion. And like I said, I was on this trajectory when I graduated to do something else, go get a corporate job and ended up working at a record label. And then going to law school and doing different things. And now, I'm investing, and I think Brown is a special place in terms of following your passion. And I think people who go to Brown, we want to change the world. And I think what I'm doing is trying to do that. And I think Brown provided a great foundation for me to think about these things and pivot and be okay with that.
Fay: Yeah. And I know that for many of us, I feel like Brown was about learning how to learn new things, right?
Fay: Not being afraid of starting up in something that maybe you weren't an expert in to begin with.
Pendleton: Absolutely. And I think it provided us the tools to learn how to learn. I mean, I think we're all... I mean, for me, I'm a perpetual learner and if I don't know something about it, I'll dive in and learn about it. And I think Brown provided the tools, and the skillsets to be able to do that and become a quick learner. A quick study on a topic.
Fay: You were recently named by “Marie Claire” as one of the Most 50 Connected Women in America. So I'm pleased that you're joining us today. And Crunchbase recognized you as one of 39 Black women investors, inspiring a new generation of investors. Wow. So why don't you talk a little bit about what those achievements have meant to you more personally?
Pendleton: I think it's been a validation of what I'm doing. I set out to try to deploy, get more capital to women and diverse founders, and doing it because I just felt like it was the right thing to do, it was important. And I didn't set out to get accolades or anything like that. And it just shows that if you see something, do something. And I'm doing something and being recognized for that, which was really great. Seven years, nearly eight years ago, when I was talking about investing in diverse founders, women founders, people questioned that, and they said, "Oh, you're just investing in these companies because of their gender and their race."
And now we fast forward, I think people are seeing the massive inequality when it comes to fundraising for both women and founders of color. And I think people are recognizing that. Organizations, companies, VC funds are recognizing that. It's actually a strategic business imperative. By 20... I think it's 2048, the United States is going to be a majority-minority. And so what that means is you're a company, if you're selling consumer goods, if you have a product service that goes to the consumer market or broader market you’re at a competitive disadvantage by not having people of color in your organization. By not funding companies where you have founders who are diverse, who are women, who bring a different perspective and a lens to a solution. And so, I think, I was a little ahead of the curve in terms of investing, but I knew that that was something I wanted to do, was the right thing to do, and also just made business sense to do.
Fay: So 2020 is likely to be a year that goes down in the history books in the U.S., not only because of the global pandemic, but also because of what appears to be the start of a new racial reckoning. So how's that racial reckoning impacted women and minority entrepreneurs? Is there a growing interest in funding those businesses? Do you feel a little less lonely, I guess, in your quest of what you set out to do?
Pendleton: I think you're absolutely right. 2020 was definitely a reckoning. For me, in the space of investing in diverse founders. I think it accelerated investments where you have a number of companies who are setting aside money to invest in diverse fund managers, as well as directly into founders. So PayPal launched a $100 million dollar fund. SoftBank, which is one of the largest VC funds, launched a $100 million dollar fund to invest in diverse founders. You have VC funds who are looking at their ranks to say, "We need to diversify people at our funds. We need to start looking at investing in more diverse founders." So we'll see. I mean, I'm cautiously hopeful. It'll be interesting to see what happens, fast forward four or five years from now, what that looks like.
One other thing: I think there's been an emergence of a lot of diverse fund managers in the VC space and they've been able to raise $50 million, $100 million, some even more, which was unheard of. And so I think we're going in the right direction. We're nowhere where we need to be when you have thousands of venture funds. And if you look at the number of diverse or women-led VC funds, I think it's something like 1.5%. I think what needs to happen is we need to have a unicorn. And so, for people who don't know what that is, it's like a billion-dollar company that has an exit or is either acquired or goes public. That's diverse like a Black or Latinx founder, so that it shows that these companies can do well and they can have a return on your investment. So I think we're going towards that. Hopefully, four or five years from now, we'll have some of those unicorns that are being invested in now and growing. And then, I think, people will recognize that this is very viable, you're going to have a return on your investment.
Fay: Can you talk a little bit about how being a Black woman has impacted the ways in which you operate at work?
Pendleton: So, I think about when I was going to conferences pre-pandemic and just meeting people, and people making assumptions. Not knowing that I was an investor. And so that still exists. I mean, I don't look like a typical VC. As I mentioned, there's very few Black VCs, women VCs. And so with that, there's certain assumptions. But I do think after what happened this summer, I've had meetings and I've had connections with people that I typically would not have had because, I think they've seen that there is this inequality, and they want to try to change things. And so, I'm now able to have these discussions that I wasn't before, so that's been good. For a very long time, I felt like being Black, African-American was a detriment. Unfortunately. Now I feel like, yes, it's a challenge. Absolutely still. But I embrace my being a person of color—being sometimes one of the few people in a room—because I bring a perspective, and I bring a lens that wouldn't exist if I weren't in that room. And so I embrace that, and I think that's important.
Fay: So maybe we can go back to what you were talking about a little earlier. About what you learned at Brown, that's really helped guide your career and enable your success. How did you spend your time when you were at Brown? I think you were an economics major, but aside from studying, what occupied your time?
Pendleton: Yeah, that's a great question. I mean, I was kind of a dual major, economics and computer science. I was two courses short of my computer science degree. So, I didn't have a lot of free time. I spent a lot of time at the Computer Center, programming. And then I had a show on WBRU, so that was really great. Because of that, I had to go into the community. We would do giveaways and events at local clubs in the community. So I got involved with that and then just hanging out with my friends. You know I had a really great diverse group of friends, and that was always fun. I feel like Brown just prepared me to question things and not be afraid to do something different or try something out.
Fay: And are there any initiatives at Brown today that you particularly connect with or that interest you?
Pendleton: Yeah, the Nelson Center for Entrepreneurship is really a great initiative that I've actually been involved with. I've spoken a number of times at the Nelson Center. I've gotten to know the leadership there. And then, most recently, I just was selected to be an entrepreneur in residence. So I will work with Brown students who are working on their startup ideas, and mentoring them and advising them. It's a year term. So I'm kicking that off shortly, so I'm really looking forward to that.
Fay: Congratulations, there's definitely an amazing amount of energy at that center.
Fay: Well, Lorine, thank you for your time today.
Pendleton: Well, thank you for having me. Thank you so much.
Fay: And we're going to have to check-in, in four to five years and see if we can have a podcast on some of those unicorns.
Pendleton: Definitely, fingers crossed. I'm looking forward to it.
Fay: Thanks for listening to the Women's Voices Amplified Podcast. For more episodes like this, be sure to listen to and subscribe. The podcast is available on Apple Podcasts, Spotify, YouTube, Amazon Podcasts, Stitcher, and SoundCloud.
The views expressed in this interview do not necessarily represent those of Brown University.