Get Funded by Serena Williams? Here’s How.
By Nicole Casperson
The queen of tennis and 23-time Grand Slam Champion Serena Williams has taken a break from tennis to turn her focus on the venture capital firm she formed 8 years ago.
Williams entered the space after learning how few women and minorities are a part of the venture capital world – establishing Serena Ventures, a small firm that joins the ranks of one of the few VC firms owned by Black women.
Serena Ventures has raised $111 million of outside financing for new investments with a focus on health, wellness, femme tech, and fintech.
According to an essay for Vogue magazine, Williams said that 78% of her VC’s portfolio “happens to be companies started by women and people of color, because that’s who we are.”
With a crowd of nearly 12,000 attendees, Williams hit the Money 20/20 stage on Monday morning and dropped some major tea on her ‘Play to Win’ strategy.
Here are the top 5 factors Serena Williams looks out for when investing in startups and entrepreneurs.
1. Get Personal
When investing in pre-seed or seed rounds, Serena Williams says she and her team at Serena Ventures are 100% focused on the founder.
“One thing that we look at is a product that’s needed in the market,” Williams said. “That’s what that’s the first thing.”
If it’s needed in the market, what is [the founder’s] passion for it? Are they doing it because there’s this giant whitespace, or are they doing it because they have a story to it?”
According to Williams, she finds that 98% of the time, when a founder can have more of a personal story about what they are building and a connection to a personal experience, those founders have the secret sauce she’s looking for.
“These founders are willing to work harder and longer,” she said. “And no matter what, when you deal with worldwide pandemics, like a COVID, or anything that can come up, they stick in it because they know this is what they want to do, it’s something they enjoy.”
It needs to be made clear that what the founder is building is something they see can shape the future of the world and the future of technology.
2. Reaction to Adversity
What a founder hasn’t done so well is an essential factor.
“When you’re so good at something, and you’ve never had any adversity, then you don’t have the motivation to succeed in your business,” she said.
Williams said some of her biggest motivations when raising funds is when people say ‘no.’
For founders, she must also find out where that motivation comes from.
Yes, the product has to have a product-market fit, but more important is asking if the product is tapping into an already oversaturated market.
For example, there are many credit card and banking products – so much so that Serena Ventures typically looks away from those deals.
4. First 10 Employees
One of the critical pieces of due diligence that Williams always looks out for is talking to more employees than just the CEO or founder.
“You have to talk to a lot of team members, ” she said. “Try to understand what’s happening inside the company, in particular. The first 10 employees are really important.”
Venture capital investment remains the tech ecosystem’s least diverse domain.
The companies Williams invests in have small valuations, and there is a considerable risk.
Serena Williams likes to win. And she knows that diversity in a company means winning.
She’s right. Ethnically diverse founders enjoy an average exit multiple that is 30% higher than those of solely white founding teams.
“Is there a lot of diversity? Are there people of color? Having that makes a company a lot better and succeeds more when you have so many different views.”
When it comes to diversity, Williams is also highly invested in fintech in Africa, she said, leaving 15% of her fund to support outside of the U.S.