Women in VC: Kate Beardsley and Jessica Peltz Zatulove Talk 'Redefining Everyday Experiences' with Their Fund, Hannah Grey
To witness the venture capital landscape today is to see a sea of VCs with unconventional backgrounds. Just look at Kate Beardsley and Jessica Peltz Zatulove. The founding partners of Hannah Grey, a first-check fund investing in redefining everyday experiences, come from careers steeped in media, emerging technology, and business growth. As Beardsley tells us, “Almost every VC today has an a-typical VC past, which I believe is becoming the norm and is amazing.”
Beardsley began her career as Chief of Staff to Martha Stewart before becoming one of The Huffington Post’s earliest employees under the wing of its Co-Founder, Ken Lerer. She then became a founding member of the active seed fund Lerer Hippeau, helping to manage its rapid involvement in more than 200 investments across its first three funds. In 2014, Beardsley left to help start Galvanize Ventures based in Denver, which supported early-stage companies across the country.
Jessica Peltz Zatulove spent the first decade of her career on the customer side, working for a global media agency running strategy for global brands such as H&M, Verizon, and Gucci, which gave her “a front-row seat to mobile adoption, creativity exploding in the app store, and the New York tech start-up system coming online,” she says. Her interest in emerging technology led her to working with start-ups in the NYC tech ecosystem, by helping them secure their first customers. She eventually left corporate to dive into venture capital, where she began Investing in early-stage digital media, SaaS, and commerce technology to address the needs of the Modern CMO. She also co-founded the support and networking collective, Women in VC, which has now scaled to 3,500+ members across 60+ countries.
When Beardsley and Peltz Zatulove met in 2014, it was rare for each of them to come across a woman in the VC space, particularly with such parallel interests. “At the time, it was very much, ‘I know another woman in venture, you should meet,’” says Peltz Zatulove of how she became acquainted with her business partner. Their connection grew quickly, first they “riffed over deal flow,” says Beardsley, then they started making co-investments together. It was “inevitable” they would eventually start their own firm, says Peltz Zatulove. “We started sharing learnings and perspectives from working with hundreds of early-stage founders across five funds, which solidified the foundation of our partnership.”
Hannah Grey is the result of Beardsley and Peltz Zatulove’s collision of like-minded drive. Their aim with the fund is to focus on identifying behavior changes to invest in founders redefining everyday experiences that challenge the status quo. “We put the consumer, the worker, the patient, the student, the parent - whoever the end-customer is at the center of everything that we do,” says Peltz Zatulove. “We look to understand how their way of life is changing and how can this product, this technology, or this service make life more accessible, more convenient, more streamlined, more inclusive, or more sustainable for them.”
We recently sat down with Beardsley and Peltz Zatulove to ask more about Hannah Grey’s ethos and the evolving VC landscape.
A Conversation with Kate Beardsley and Jessica Peltz Zatulove of Hannah Grey
Starting off, storytelling seems to be a critical part of your brand and fund building. Why is this?
Beardsley: Storytelling is crucial. Whether you are building a consumer facing brand or a B2B company, you have to communicate what your technology does. Marketing is needed for every product, attention spans are shorter now and messaging should be distilled quickly. The vision, how effective you are, who your customer is, what you're doing has to come across in nanosecond. So much of that is storytelling. A lot of how relationships are built comes back to people connecting and the desire to help solve a problem or inefficiency. That boils down to a business’ ability to forge an emotional connection with their customer, and the vehicle is storytelling, so we find it very valuable.
Peltz Zatulove: Knowing how to communicate can be one of the biggest early indicators of success, because it transcends all aspects of their business: Can they close a customer? Can they inspire reporters? Can they recruit talent or strategic partners? Can they sell investors? So much of being able to articulate your vision is through effective storytelling, and that's an area Kate and I shine given our backgrounds. Kate came from The Huffington Post and worked for Martha Stewart - who is arguably one of the most brilliant storytellers given her ability to create emotional connections with her audience. I come from a marketing and branding background working with some of the most iconic brands in the industry. It doesn't matter if it's a B2B company or B2C company, you want to build a brand that creates a sense of belonging and provides utility or value back to the end customer. It’s an area that we love to dig into with our founders.
How is evolving your brand - Hannah Grey, a wider message that’s meaningful to you?
Peltz Zatulove: Hannah Gray is named after our oldest daughters, Raya Hannah and Gunnison Grey. We are building our firm to create generational wealth for our founders, their employees, our investors and our team, but we also understand venture is a human business. We love learning about our founders' lives as we go on a long journey with them. We have had founders get married, get divorced, have a baby, lose a parent; life events can influence how one thinks about building a company, and that matters to us. We have empathy and a nuanced understanding that there's life beyond this business. This perspective enables us to create more personal connections and it’s what we have become known for and how our brand stands out.
On a personal note (particularly when there are less than a thousand women in the US who have started their own venture capital practice), naming our firm after our daughters is a constant reminder that we are role models. Not only to our children, but to anyone that interacts with our firm that women can thrive in this industry and it’s possible to have an impactful career and a family, and that should be celebrated as normal.
You state that Hannah Grey is “re-defining everyday experiences” Walk us through what that means.
Beardsley: We put an emphasis on studying the behavior of the end customer, and we look to understand how their needs are changing, creating an outsized area of opportunity that has the potential to challenge the status quo. In previous years, there were very clear lines around sectors, SAAS, consumer, AI, Fintech, etc. Technology is now built at a faster rate and we are seeing blurred lines across sectors, in some cases they have dual customers at the outset - it all depends on who is interacting with their product or service, and why. That’s part of the shift that we are acknowledging around our thesis. If you are a consumer company, chances are you are also trying to land enterprise B2B relationships to sell into human resources or benefits packages. Corporations are looking for modern ways to retain talent and become more competitive. On the flip side, if you are selling into B2B, you are likely looking to understand how the consumer, the worker, or the end user is loving your product, and what those ‘surprise and delight' features are to retain their favor and engagement.
In terms of investors, do you feel the lines are being blurred there, too, in regards to investors wanting to invest more broadly to make an impact?
Beardsley: I think so. The private sector has become such a magnet for growth. There is a clear appetite to have exposure to venture capital and privately held technology businesses, be it the technology, the potential to return capital, capturing alpha, or the desire to be on the cutting edge. When I began in venture capital, over a decade ago, investors primarily wanted their K-1s and quarterly reporting on time. Now, it's about building relationships and partnerships for co-investments. Limited Partners are looking for ecosystem partners to be able to collaborate with for access.
Peltz Zatulove: When we think about our fund for our LPs, we think about it through the lens of the Hannah Grey experience. We have grown Women in VC into the world's largest community for women investors, with over 3,500 women across more than 60 countries. We understand that meaning of community and how to connect with intention, and are using that playbook for Hannah Grey. We want to encourage our investors to invest more broadly and are happy to help facilitate that with other qualified connections - so we look to understand what they are interested in, the sectors or stages they like to invest in, etc. This enables us to be thoughtful about building relationships with not just our LPs, with our co-investors, with our entrepreneurs and our founders, and be thoughtful about connecting with intention. This idea of a data-driven community creates a great experience for all who work with us in our ecosystem.
What are some of the greatest shifts you’re seeing in the market and ecosystem overall these days?
Beardsley: The increase of secondary sales in the private market is a pretty prominent shift. The industry as a whole is experiencing some of the largest returns and markups in a generation, yet, in most cases, liquidity and distributions are being pushed out. This is a direct response to companies staying private longer. Each time a company takes in outside capital it extends the life of the business anywhere from 18 to 24 months on the short end. If a fund has held a position in the company for 10+ years since the seed stage, additional holds may not ultimately benefit their overall IRR, so they may look to direvest.
We believe liquidity management is a nuanced skill set and acumen that funds will need to have going forward. At Hannah Grey we have developed a framework to evaluate our portfolio in consideration of this industry change. We underwrite every round of financing anew, monitoring the shifts, additional risks and uncertainties ahead, etc. We ask ourselves: Are we a buyer or seller? Proactively engineering liquidity through secondary transactions is a different skill set from investing. If private markets continue to borrow behaviors from the public markets, portfolio management will be a new level of performance funds will be graded on.
What are you seeing in terms of women in the venture space these days?
Peltz Zatulove: Our community of Women in VC shows growth that is just explosive. We do no marketing, and have 20-30 new women from around the world applying to be members every week. There is a huge appetite to expand your network and a sense of belonging. We believe it's not just about getting more women into venture. It's about keeping the women we have in venture. And that really comes from building community, network connections, upward mobility, shared resources, and trust allies to learn from. I'm bullish on Women in VC, there's so much collaboration happening. There's also a bright spot in terms of more women starting funds. From the research we published last fall, 90 percent of women led funds are considered emerging managers, which means they are on fund one, two, or three. About 73 percent of women-led firms were formed in the past five years, showing major growth in women spinning out and starting their own firms, or recognizing a better path to partnership in raising a small proof of concept fund to build their track record.
While progress has been made - the capital going into women led funds is tiny compared to the broader venture capital ecosystem - only 5.6% of VC firms are women led, we have a ways to go. We don't believe diversity initiatives should prioritize one gender, one ethnicity, or one underrepresented group - everyone deserves to be elevated to help get the industry to parity. The emerging manager talent is there and we are optimistic the capital will follow, which is exciting to see.
To learn more about Kate Beardsley, Jessica Peltz Zatulove, and Hannah Grey, visit hannahgrey.com.
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