SYDNEY THOMAS - SENIOR ASSOCIATE @ PRECURSOR VENTURES
“I studied the roots of wealth inequality in America, especially the racial wealth gap. I learned that a lot of it is entrenched in policies the government has enacted which is why I originally went into the public sector. I’ve always been focused on making a dent in the wealth gap and now, in VC, I can empower founders who are focused on this problem.”
Meet Sydney Thomas, Senior Associate at Precursor Ventures. Sydney chatted with us about how her interest in the public sector led her to a career in VC, and how her current work at Precursor is shaking up the status quo.
We’d love to start by hearing about where you grew up. What was your childhood like?
I was born and raised in San Diego, California. Growing up, I thought I would go into public policy as my entire family works in the field. I went to Duke University to study Public Policy and then moved to NYC to work for Mayor Bloomberg. Although I had always thought I would work in the public sector, many of the reforms we were lobbying for were never implemented which was disappointing to me from an impact perspective. It was during this time that I was exposed to a variety of public/private partnerships between public schools and private actors such as corporations or wealthy individuals.
I saw firsthand the impact capital had on getting the policies implemented that we had tried so hard to lobby for.
After attending business school at Haas, I decided I wanted to be a VC so I could provide capital to entrepreneurs interested in helping underserved populations or communities. I was introduced to Charles Hudson at Precursor Ventures and our visions aligned so I decided to join.
Can you tell us a bit more about Precursor Ventures and what you do there?
Our philosophy at Precursor is that just because you’re unproven doesn’t mean you’re any less qualified or less able to build a fantastic company. We focus on the unproven entrepreneur who is building their first company. We feel there are outsized returns to be had because we get into these companies early and at less competitive valuations than other early-stage companies. This also means we are aligned with the entrepreneur as we do not need a billion dollar exit to do well on these investments.
As fund sizes in venture are increasing, investors have to make bigger investments at higher valuations, which then necessitate a bigger exit. This puts pressure on founders and creates the perception that if you as a founder don’t exit for a billion dollars, you are a failure. By keeping our fund size small and focusing on these unproven entrepreneurs, Precursor can make smarter investments and have more aligned outcomes with our founders.
What innovation or change would you like to see in the VC industry? How does that affect how you look at potential investments?
I believe we’re starting to see more startups focused on moving the consolidation of power from the few to the many. In banking, Robinhood is a great example of this trend whereby they were able to move power from the few heads of major banks and give it back to the people using their product. One of Precusor’s companies, Lacquerbar, is doing this for the nail salon industry which traditionally have been relatively predatory. The company wants to provide a great experience for consumers, as well as empower the nail technicians through education.
You’re clearly very driven by and focused on improving lives through innovation and entrepreneurship, especially for underserved populations. What in your past drove you to do this?
My mom is from a small, farming town in West Virginia and grew up relatively poor. Every summer when I was younger, my family would go back to West Virginia for a month and spend time with my extended family. I remember being so shocked to see the disparity between my life and my cousins’ lives. We were almost exactly the same and yet we had had vastly different outcomes in our lives.
As a result of this experience, at Duke, I studied the roots of wealth inequality in America, especially the racial wealth gap. What I learned is that a lot of it is entrenched in policies the government has enacted which is why I originally went into the public sector. I’ve always been focused on making a dent in the wealth gap and now, in VC, I can empower founders who are focused on this problem.
What was it like joining Precursor as their first hire? What advice would you have for people joining funds with very small teams?
The VC industry doesn’t have a lot of jobs. That is just a fact. One way to get ahead of the game is to figure out who is fundraising, especially new managers and small teams, as they often need help with fundraising and growing the business. This is actually how I found Charles as he was fundraising as a 1-man VC firm. The downside of joining a small team is that a lot of my job is less focused on VC specifically and more focused on the everyday tasks of starting a business. For example, we don’t have a Human Resources team or Finance team so Charles and I divide up many of these responsibilities. The upside is that, for me, this diverse set of responsibilities is a lot of fun and I get to see how a business is built from the ground up.
Who are your mentors and what did they teach you? Did you have any great female mentors? Do you feel that’s important?
Honestly, I have not had great success in finding mentors in VC outside of Charles and the person who introduced us. VC is a solo sport and there is no right way to do the job.
Unlike other fields in which there are certain career paths you need to follow or certain boxes you need to check, VC is completely different and each person’s path into VC is unique.
I used to be really focused on finding mentors, but every person I spoke to gave me a different perspective on how to be successful in VC. What I realized is that I needed to first define success for myself.
What is an Industry trend you’re most excited about?
Investing in places outside of the SF Bay Area. I’m partial to NYC because I worked there after college, but even beyond major metro areas there are interesting companies sprouting up. For example, there is a startup factory called INVANTI in South Bend, Indiana that has some interesting companies we look at.
What is your favorite or most interesting article or book you have read from the past few months?
Dance of the Dissident Daughter by Sue Monk Kidd. She wrote it when she was going through a feminist awakening in her own life and realizing that she wanted to create a world that she is proud of rather than just following things the way they are. This message really resonated with me as I was going through a similar awakening in my life.
Who is a female entrepreneur or investor you'd most like to meet and chat with?
Kesha Cash at the Impact America Fund. She has had a very interesting journey to where she is today and one that exemplifies the power of following your own version of ‘success.’
What is the best piece of advice you have ever received?
If I’m being honest, I have received very terrible advice my whole life. The only good advice I have is “question every piece of advice you’re given.”