It didn’t take long for Pocket Sun to realize that entrepreneurship can be a lonely journey, even more so for women.
She first got a taste of it in 2014, while studying at the University of Southern California for a master’s degree in entrepreneurship and innovation.
“A course I was taking was [about] venture capital and our professor was super well connected,” she recalls.
“He had CEOs and VCs come in every week to talk to us and I remember asking on day one, [are] will there be female speakers? And he’s like, ‘Maybe. There is few of it.'”
SoGal was… born out of my own pain point of not seeing enough women in the world of entrepreneurship. I felt incredibly isolated and like an outsider.
pocket sun
Co-Founder and Managing Partner, SoGal Ventures
By the end of the semester, there were none left, Sun said. CNBC do it in a virtual interview.
“That’s when I realized, wow. Women are the real unicorns in this venture capital world.”
She was born in China and moved to the United States when she was 18, then started SoGal in 2015 when she was 23. It all started as a community group supporting young female entrepreneurs.
“It was…born from my own pain point of not seeing enough women in the world of entrepreneurship. I felt incredibly isolated and like an outsider,” said the Forbes 30 Under 30 honored added.
But eight years later, SoGal is more than just a safe space for like-minded women. It’s now SoGal Ventures – a VC that invests in early-stage startups in the US and Asia, and all are led by women or entrepreneurs from diverse backgrounds, Sun said.
Pocket Sun (left) with co-founder Elizabeth Galbut.
SoGal Ventures
Its first fund of $15 million was used to invest in 42 companies, which have since created a total market value of $7.8 billion, said Sun, who is also managing director of SoGal Venture.
In a venture capital industry where women make up less than 15% of check writersSun stands out.
The 31-year-old shares with CNBC Make It why founders are worth betting on and what success means to her.
Fundraiser ‘a bar in motion’
Sun decided to create her own venture capital fund when she realized that the main problem for female founders was “lack of capital to grow”.
But when she decided to take matters into her own hands, she faced challenges women entrepreneurs often face, like not being taken seriously.
She said: “Because the majority of the power and assets are run and controlled by men…people didn’t understand, why would you invest in women? Is that even a thing?”
I remember so clearly in New York at that investor meeting, [a male investor] was sitting across from me and he said, “Investing in biotechnology is a thesis. Investing in women is not.
pocket sun
Co-Founder and Managing Partner, SoGal Ventures
“I remember so clearly in New York at that investor meeting, [a male investor] was sitting across from me and he said, “Investing in biotechnology is a thesis. Investing in women is not.'”
This meant that for the first few years, Sun and his co-founder had to overexplain themselves in boardrooms.
“Because we didn’t have a lot of track record…we really had to give them all the macro context on why venture capital as an asset class? Why invest in women? Why invest outside of Silicon Valley Everything needed explaining.”
Even now — as SoGal Ventures has built a track record with five unicorns under its belt — expectations still look like “a moving bar,” Sun said.
“Now a lot of sponsors are like, ‘Your track record isn’t that important. We want to see what’s repeatable? What’s your secret sauce that will take you through different funds?’ she added.
“Sometimes I feel like if I were a man, my fund would be oversubscribed right now.”
Still, Sun sees being underestimated as a “one-of-a-kind gift” and a challenge she wouldn’t trade for an easier trip.
“I’m getting better every day because of it. Investors are better educated on the importance of things like gender equality and diversity in mind,” she added.
“[Now] we just need to explain: We invest in women… How do we best achieve this? And we let the numbers speak for themselves.”
Capital efficiency
Even so, companies founded by women are still only receiving 2.5% of all venture capital investmentsaccording to PitchBook data.
“Women are an underappreciated and underfunded group – and that at different stages,” Sun said.
“If you look at the earliest stage, if it’s a female founder with an idea, she’s very unlikely to get funded. She’s going to need a lot more evidence.”
Part of Sun’s role as an investor and entrepreneur is to encourage its portfolio founders to dream bigger.
“Very few women growing up would have thought I would be a fabulous CEO or make that much money. It’s just not part of how we grew up,” she said.
I think a lot of women want to be more conservative, and they want to be able to keep their promises… [but] there is a balance between being overconfident and optimistic.
pocket sun
Co-Founder and Managing Partner, SoGal Ventures
This sometimes results in founders’ “pessimistic or less aggressive” outlook and projections, Sun added.
“I think a lot of women want to be more conservative, and they want to be able to deliver what they promise… [but] there’s a balance between being overconfident and optimistic.”
But female founders, who have always had to be “capital efficient” to survive, now have the chance to shine as The era of easy money is coming to an end.
According to a Boston Consulting Group study, startups founded and co-founded by women were “significantly better financial investments.”
“For every dollar in funding, these startups generated 78 cents, while male-founded startups generated less than half — just 31 cents,” he found.
However, women didn’t choose to be capital efficient — they were “forced to be,” Sun said.
“In this environment, that’s not a bad thing. They’ve been prepared. They know how to preserve the money. They’ve always known it like the back of their hand.”
Sun’s Measure of Success
While hurdles and challenges persist for female entrepreneurs and female-led venture capital firms, Sun said she has learned to see success differently and to appreciate the process.
“I started SoGal when I was 23. There was this naivety and this feeling of, ‘This is going to be my life’s work and I have to rush it,'” she said.
“Almost eight years later, I look at it much more calmly. I can do things at my own pace.”
But now, success is when I feel good about what I do every day. I don’t have to doubt if I’m doing the right thing. I feel good in the relationships around me.
pocket sun
Co-Founder and Managing Partner, SoGal Ventures