Downing Capital Group

Extending a warm welcome to our newest Investment Intern Sanchie Shroff! Sanchie is an MBA Candidate at Harvard Business School and a campus investment partner at the MBA Fund. Sanchie graduated from Shri Ram College of Commerce, Delhi University, where she majored in Business and Finance. She started her career as a consultant at McKinsey & Company then worked with WestBridge Capital and SoftBank as an Investment Associate. We look forward to the great contributions she'll bring to our investment team. Welcome aboard, Sanchie!

We are thrilled to welcome our newest Investment Associate Intern, Julie K.! Julie is an MBA Candidate at Columbia Business School, where she is a Columbia Venture Fellow. She graduated from Amherst College with a degree in Neuroscience and began her career at Clarion (now Lumanity), a life sciences consulting firm based in Boston, before becoming an investor at FemHealth Ventures. We look forward to the great contributions she'll bring to our investment team. Welcome aboard, Julie!

Last week we hosted our 3-day CEO Summit and were thrilled to have our CEOs together with our team. We had terrific strategy sessions filled with energizing discussions surrounding how to overcome common startup challenges, building first-rate teams through talent acquisition, developing strong operations, and many more. We couldn’t leave Chicago without some sightseeing and fun relationship building activities too. It was incredibly valuable to have the opportunity to gather in person and be in a room with so many diverse backgrounds and talents. 

“Popular culture has painted a picture of young entrepreneurs, fresh out of college, building ventures that will surely change the world. But history has proven time and time again that this image is far from reality.” The celebrity view of an entrepreneur isn’t the norm. Here’s what a successful entrepreneur looks like: They set overarching visions that go hand-in-hand with focus. They are resilient, adaptive, and clear communicators. They have grit. They leverage on industry expertise with a nose for data. Our founder Jesse Downing shares what it truly takes to succeed as an entrepreneur in his latest Built In column. Read the full piece here.

While “building businesses” may have a certain charm, there’s a lot of tenacity, debate, research, and iteration behind the scenes. Staying inspired is key. Here’s how we do it: 1. Stay passionate: We’re a team of curious founders, investors, and experts with diverse interests. It’s not uncommon that an idea sparks from an area of personal excitement or intrigue. 2. Tap into our network: Others may have encountered similar roadblocks and can offer insights on execution or business model gaps. Within our network, industry experts, investors, and entrepreneurs serve as true inspirations for building. Our pursuit of learning from them is perpetual. 3. Embrace setbacks: When we encounter a problem, we tackle it head-on. Our minds instantly search for the disruption or underlying causes that may have triggered it. From there, the creative wheels begin to turn towards potential solutions. 4. Celebrate diversity: We welcome diverse backgrounds. Problems are best tackled when viewed from multiple angles. That’s why our teams consist of individuals from a wide array of backgrounds with experience operating and investing across diverse industries. This vibrant collaboration truly inspires us. #teambuilding #startups #innovation

Each month, the Investment Team at Downing Capital Group reads and discusses a book, and for January, the team read Good to Great by Jim Collins. In this article we present our main takeaways from the book and how it's principles can be applied into entrepreneurial strategies, leading one's startup to greatness.

Did you know that specific personality traits show up time and time again in successful entrepreneurs? A team from the University of New South Wales actually studied it. Founders often show a preference for changing things up, demonstrate higher levels of exuberance, and an openness to adventure. Founders were even grouped into six archetypes. One thing to consider is that these personality traits are not independent of the environment in which ventures are launched. When you’re thrust into the challenge of building alone, forced to balance priorities between creating a great product and engaging in early-stage fundraising activities, when you’re operating without any support network, entirely on your own, it certainly feels like an adventure – where some of those traits suddenly become survival tools. At Downing, we operate within a distinct venture-building environment. Consequently, the traits essential for a successful Downing entrepreneur also differ. To thrive as a Downing founder, you need to have domain knowledge, unwavering integrity, a collaborative orientation, the ability to set a compelling long-term vision and inspire a team, and demonstrate data-driven decision-making. We don’t disagree with the NSW study; we simply don’t believe that all great companies will emerge from founders “fighting in the wild” #entrepreneur #startups #founder

Mass layoffs in the tech space over the past two years have left an aura of economic uncertainty in their wake. But it's not all doom and gloom. The languid state of the VC markets means there’s a surplus of great talent seeking new opportunities. This fact, paired with a trend in the post-Covid world that people expect both a paycheck and to find deeper meaning in their work, has made now a perfect time to build. Our CEO, Jesse Downing, outlines the top attributes that make for a successful entrepreneur in his recent column in Built In. Check out the full piece here!

Universal rules in startup funding are typically challenging to be applied across industries. Nevertheless, we still see them forced upon company after company, despite it being painstakingly obvious that the shoe doesn’t fit. Consider the 'Rule of 40'. Research shows that SaaS companies exceeding the Rule of 40 consistently show higher valuation multiples. But what about healthcare, CPG, real estate tech, and numerous others? Should they be compelled to evaluate growth and profitability through the same lens? Every industry requires a different growth strategy, but over the last decade, far too many investors have pressured founders to reach profitability on their terms, often due to allegiance to general rules like this one. Distilling performance into one number certainly has a powerful effect of galvanizing teams, boards and investors. However, this shouldn’t imply prescribing the same remedy for all. It’s time to shift away from these blanket rules and move towards being thoughtful about the unique needs of each young company.

Invest in diverse founders. Despite a tougher capital-raising environment in 2023, female-founded companies achieved a record proportion of total VC value, accounting for 22.8%. This marks a notable increase from just 15% a decade ago. However, while teams with at least one female founder did see their share of funding jump, all-female founding teams still receive disproportionately lower funding - having secured only 2% of all VC funding in 2023. Research shows that companies with over 30% of women executives have a substantially higher – 48% - likelihood of outperformance compared to less gender-diverse companies. At Downing, we are committed to cultivating diverse venture-building teams. Successful companies come from all walks of life, and it’s time for our industry to truly embrace diversity. #diversity #femalefounders #dei