Gale Wilkinson, founder and managing partner at Vitalize Venture Capital, shares her wisdom on building startups with entrepreneurs. Gale talks about investing in the future of work and future of learning technologies, and highlights the questions she asks founders to understand their north star.
Gale Wilkinson, founder and managing partner at Vitalize Venture Capital, shares her wisdom on building startups with entrepreneurs. Gale talks about investing in the future of work and future of learning technologies, and highlights the questions she asks founders to understand their north star.
In this episode, you’ll learn:
4:44 What investors are looking for when they ask “Why did you pick this business?”
6:08 How the virtual experience trend is driving innovation
11:37 Themes that influence how we think about the future of work
16:39 Benefits of angel networks to investors and founders
The non-profit organization that Gale is passionate about: Chicago Blend
Gale Wilkinson is an angel investor and the Founder and Managing Partner at Vitalize, a seed fund and angel community investing in future of work + learning software. Gale is also a startup advisor and is currently a founding Board member of Chicago Blend, an organization focused on increasing diversity in VC and startups. Previously, Gale founded IrishAngels, one of the largest angel groups in the world. She also founded two failed startups, consulted for new product launches with Nielsen, and was part of the strategy team at Orbitz.
Vitalize Venture Capital is a Chicago-based early-stage B2B software fund and 300+ member angel community investing in the high-potential future of work and future of learning technologies. Vitalize has offices in Chicago, San Francisco, and Los Angeles. Portfolio companies include: CloudEagle, NOWHERE, The Mom Project, Toucan, Zingtree, Abstract, Enklu among others.
Learn more about Vitalize Venture Capital on Vitalize’s YouTube channel and The VITALIZE Podcast.
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Gale Wilkinson: What is the north star of this company and what have you built so far that supports that story? Where are you on your journey? How have you gotten to where you are today and how are you thinking about the next steps required to get to that north star that you've laid out for your company?
Gopi Rangan: You are listening to The Sure Shot Entrepreneur, a podcast for founders, with ambitious ideas. Venture capital investors and other early believers tell you relatable, insightful, and authentic stories to help you realize your vision.
Welcome to The Sure Shot Entrepreneur. I'm here with today's guest, Gale Wilkinson. She's the founder and managing partner at Vitalize Capital. She has a podcast, an angel investment group, and she has a substack where she shares wisdom on investing and how to build startups with entrepreneurs. She has a YouTube channel. She has a lot of content out there.
Let's talk to her to find out how she makes investment decisions, what she looks for in entrepreneurs when she meets them, and what excites her. Gale, welcome to The Sure Shot Entrepreneur.
Gale Wilkinson: Thanks, Gopi. Happy to be here.
Gopi Rangan: Tell us about yourself starting with where you grew up. You grew up in a small town in Indiana, right?
Gale Wilkinson: Yes. I grew up in a little town called Morsel in the Southeast corner of Indiana. It was an old farmhouse and we had horses and dogs and lots of friends nearby so very fun childhood.
Gopi Rangan: So growing up in a small town in the Midwest, how did you go from there to starting your own venture capital firm?
Gale Wilkinson: Yeah, I'm definitely an accidental VC. I did go to school in Indiana, went to Notre Dame, came to Chicago after I graduated, worked at a market research firm called Nielsen for a number of years, and then switched over to the travel industry and worked at Orbitz and then went to business school.
While I was at Orbitz, I started a business on the side that ultimately failed, but I loved entrepreneurship and realized I was meant to start businesses. So, at Booth Business School, I focused exclusively on startups. I started another one that didn't make it. As I graduated, had the opportunity to start an organization called IrishAngels, which is effectively a venture capital firm that allows individuals to make their own decisions and do deals together.
I took a step back when I had that opportunity presented to me and said, wow, this sounds amazing. It's starting a business to help others start their businesses. I was lucky to have a few months of loan money left from Booth and figured if we could get enough people that want to do this and pay a membership fee to join the organization, then we are off to the races.
That is how I stumbled upon venture capital back in 2012.
Gopi Rangan: Very interesting. Why do you like venture capital? What's most exciting for you?
Gale Wilkinson: I love the connection. I love the people. You're always meeting new people. You're always learning new things. There's some beauty in having so many different things coming at you all the time. For my personality type, that really works well for me personally. I'm always having to grow and to learn and to try things and to fail and to get better and to think about how we can do really good deals and then also get even better at helping our founders.
Gopi Rangan: This is very interesting. There's a range of topics that we get exposed to as VCs. And the types of personalities we meet are so vast that always every day is an exciting day. I resonate with that as well. How is Vitalize Capital different from other VC firms? What stage do you invest? What is the main focus for the firm?
Gale Wilkinson: Sure. We have a seed-stage venture fund. We invest in future of work. We define future work as transformative workflow technologies. These are really big ideas that change how work is being done. It's all B2B software. It can be either horizontal or vertical application that once again is all about helping a business to achieve its outcomes and a much, much better way.
Our seed fund will invest across a number of companies each year. Typically those companies come in and have some early traction and raising rounds of 2 to 5 million at the seed stage. If we really love a founder, we love what they're doing. We think it's a great fit for the types of businesses and future work that we look for, but it's just too early, we also have an angel network called Vitalize Angels. They do pre-seed investments. Typically these founders have a product built but they are just starting to charge for their services and products, meaning that they're pre-revenue. These businesses can pitch our angel network for investment. We've done nine deals today, and those check sizes range from 50K to 150K.
Gopi Rangan: What happens in that first to second meeting with the founder? What are you looking for?
Gale Wilkinson: Well, the first question I ask all founders is: "I'd love to hear your story. Tell me about yourself and tell me about how and why you started this business."
Gopi Rangan: Is that kind of your opening question with the founder?
Gale Wilkinson: Yes, always. I want to know why the founder picked this business to start. What is the founder-market fit? And I always get really interesting insights into that component of the business. Then we talk about: What is the product? How many customers do you have, if any? What's your revenue, traction look like? How do you think about the competition? What's the market size? What's your future roadmap and vision for the company? Where is this business in five years?... to get a sense for how the founder is thinking about building it over time.
And then I also ask questions about the team. How are you thinking about building out your team? Who's already on your team? Where are there gaps?... because entrepreneurship, especially at the beginning, it's a lot about assessing not just the business opportunity, but creating a team around that and processes in order to execute against that market opportunity.
Gopi Rangan: I see that you have an approach to this process, although it feels quite daunting sometimes to entrepreneurs and also unclear to them, but you have a way of approaching this. Can you give an example of a conversation like this you had with one of your startups, how did you meet them? What was the first conversation like? And how did you leave that meeting? What were your thoughts?
Gale Wilkinson: I'll give you the example of a portfolio company from fund one called Nowhere. Nowhere is a very cool connection software where you can go online into a virtual 3D world. They're really cool, virtually appealing 3D worlds, where, for example, artists can come in and play their music and then have a small, intimate gathering of their fans after the show and talk about the music or what they just performed. So you walk around and you're actually moving through space. And when you walk up to people, you can hear them talking. And then when you walk away from people in the virtual world, you don't hear them talk. So it feels much more like real-world versus a 2D experience-like.
Gopi Rangan: You kind of continue the blissful experience of the concert, but you now go online and hang out with more of those geeks and fans who love the thing that you love.
Gale Wilkinson: Right. You could go in sometimes for music festivals or larger events. There could be multiple rooms and you can walk in and out and check out a bunch of different things going on at once. Then there's also an application for corporate gatherings. So, if you want to throw a really cool virtual holiday party or quarterly offsite, that's virtual, you can use the software to do some really cool things with your team.
Gopi Rangan: This topic is very relevant these days when so many of the activities that we used to do offline are now online. It makes sense. At what point in the conversation with the founder did you say, "well, I really want to invest in this company?
Gale Wilkinson: I met the founder through a friend of mine in the on-deck network. I was a participant in the angel cohort 2, I believe. So this was about a year and a half ago. I connected with a woman there who had done some consulting on the product for Nowhere. She said, "Hey, I know you do future of work investing. You should really talk to this founder. They're doing some cool stuff." She made the introduction and I talked to the founder, Jon, and loved the vision because at the time it was really Zoom and some other 2D experiences and not much in terms of virtual online experiences that were really good.
At the time I thought, "wow, I can totally see how companies would use this. And it's a much, much more interesting and unique remote experience versus Zoom." I got comfortable with the deal very quickly because John is actually a former circus performer. So, he is an entertainer and he really understands the in-person experience and bringing things to life and delighting his audience.
I firmly believe in future of work. This idea of being delighted as an employee is really important for employers to figure out. At this point, the pandemic had just started, but his software was well on its way and I could see huge applications for its use, not just now but as companies just have to get smarter about doing cool things with their users and customers, with their team members and really any stakeholder group that needs to gather.
Gopi Rangan: Very interesting. Circus performer turned entrepreneur. I see that the natural skill to delight the audience comes through in the business as well. Is this typical for you to engage with entrepreneurs from the early stages onwards, and after a few conversations, you get warmed up to the idea?
Gale Wilkinson: Yeah. So I'll have a first call, or my partner Caroline will have a first call, or someone else on our team will have a first call. If we think it's a fit for our fund and our thesis, then we will share it internally that we like this deal, we think it's something we should look into and we'll have a few more conversations with the founder and we'll go through our due diligence process to ensure that we believe that it's a good bet that we're going to be making on behalf of our limited partners.
Gopi Rangan: Okay. I want to talk about future of work, but before we go there, I have one more question about founders. What advice would you give founders before they come to meet you? What's the best way for them to make that first meeting effective with you?
Gale Wilkinson: Generally, any founder that wants to talk with a VC or an angel investor, if they're really early on in their business, is to really understand their story and their vision.
What is the north star of this company and what have you built so far that supports that story? Where are you in your journey? How have you gotten to where you are today and how are you thinking about the next steps required to get to that north star that you've laid out for your company? The founders who've really thought through that and have a great understanding of the market and that north star and how they're going to execute against it, because they've gone out and they've gathered a lot of data and insights, and they've synthesized that, and they really have a clear picture on the next steps of the company, those are the founders that I lean in and I get really excited about because there's so much richness and specificity around how they're thinking about the problem and the market and the business.
Gopi Rangan: I like how you describe it as the north star. There's clarity in their vision and there's a lot of boldness in how they want to approach it. There are a lot of details that they can give on how they're going to execute over the next few years. It all comes through in that storytelling in the first meeting, and that's driven by that north star. Very beautiful. It's like watching a movie, hearing that story from a founder every day.
I want to talk about future of work, a topic that you mentioned a little earlier. Future of work is kind of a broad theme, and there are a lot of areas that you could focus on. Are there any specific trends that you like, that you are excited about?
Gale Wilkinson: Yes, definitely. And you're right. Future of work actually is confusing to a lot of people because it can mean so many different things. Based on conversations I've had, the most widely accepted definition of future of work tends to be things like productivity apps and collaboration tools and applications that help us do our jobs better, faster, more efficiently. That's definitely part of future of work, but we really think about future of work as these very big ideas that are tremendously changing how work is being done. So, if it's a collaboration play, it's really transforming collaboration. It's not incrementally making it better.
The themes that are driving how we think about future of work are one, the data shows now that about half of US employees are working at least part of the time from home. And that's as much as two-thirds of us employees who are white-collar or knowledge-based workers are working part of the time or all the time from home. When you look among that set of people and ask them if they want to go back to an office or stay working from home, 90% are saying, "no, we want to stay in the situation that we're in."
The implications for that are huge for businesses because employees want the flexibility - they're demanding it - and employers are trying to figure out how to offer it. This is going to open up a whole host of needs that companies have as there are some people in the office. There are some people at home and some that are going back and forth. We think that there's still a lot of infrastructures that's going to be required to properly support companies as they continue to adjust to what employees are demanding.
A few other trends that we're following closely are one the rise of the freelance market. In the last year, tons and tons of people have begun doing freelance work. Right now about a third of the people living in the US are doing some form of freelance work, and just over half of postgraduate degree holders are doing some form of freelance work in the US. We know that, especially among the most highly educated, freelance work is becoming really interesting and it's growing quickly year over year because once again, employees are demanding flexibility and they want more autonomy over their work-life balance. We believe that we'll see more and more freelance work happening in the future and we're looking for infrastructure, for engagement plays here, both on the employee and the employer side to make that part of the hiring market more efficient.
And then the last thing I'll mention quickly is learning and development models. Historically, these have been very overlooked by executives and HR leaders. What we're learning now is that it's a lot easier for employees to switch jobs. That means that employers have to figure out how to retain talent. And part of that is development. How are we going to train our employees? How are we going to up-skill them, re-skill them, make sure that they feel a part of not just the company's growth, but their own personal growth? We need to tie that in together as we develop ways effectively focusing way more attention than ever before on the importance of our employee programs.
So, we're constantly looking for newer and better learning models, engagement models, and retention models that employers can use to make themselves much more efficient in terms of the outcomes that they can generate out of business.
Gopi Rangan: I see three major trends here: desire for flexibility and the trend that moves people to become more independent with their work, like freelancers, and how people manage their professional development. Those are three major trends that drive a lot of changes in the future of work. What are corporations doing to prepare for that future of work? How can they innovate so they can be more supportive of the future workforce? Can you give an example of one of the startups you've invested in?
Gale Wilkinson: I'll share an example of a Vitalize Angels company called Balloon. Balloon is a software platform that helps companies effectively reduce bias and improve the efficiency of meetings. In fact, you can save up to 70% of your time in meetings because of the way that their software allows the meeting participants to do some pre-work and ensure everyone's voice is heard and get to outcomes much more quickly and efficiently.
Gopi Rangan: Very interesting. I know that Vitalize is not just a VC firm. You have an angel network as well. What is a good starting point for beginning a conversation with Vitalize for an entrepreneur? And, how does the angel network fit into your ecosystem?
Gale Wilkinson: If any founder that's innovating in the future of work and likes our firm and thinks it could be a good fit, there is an Airtable form on our website where they can come, even if they don't know us yet, and upload their information. Our associates are looking through that list and responding to all of them. So that's really the best way.
Gopi Rangan: Do you want to talk a little more about the angel network, what it does and who are these people in the angel network and how it supports your firm?
Gale Wilkinson: Vitalize Angels is a group of 350 individuals. These are angel investors who pay $149 a quarter to access the group. What they get for that membership fee is one, they'll see three to four pitches per month, and they can invest a thousand plus into these companies. Two, they get education around how to think about angel investing, how to become a better angel, how to support companies and think about due diligence et cetera. Lastly, there's obviously the opportunity to connect and network not just with the other angels but we also have a platform manager that helps our community members provide value to the companies largely through customer introductions. So, it's a really cool way for us to offer what we think are strong investment opportunities to smaller investors who want to write $1000 to $25,000 checks into really early companies, and they believe in our model. They believe that because we've been around for a while, we have a focus, we have a strong brand that we're getting good deal flow, and our team with 10 plus years of experience are able to vet those and provide due diligence that helps them as individuals make better decisions than they cut on their own.
The angel network today is about nine months old since our beta launch. As I mentioned, we've got nine companies already through that. They're all future of work and the founders who do want to work with us one, they love the fact that our angels it's an inclusive group. 70% plus of our 350 check writers have diverse factors. And two, they love the fact that if they hit their milestones and do well, our fund will be able to take a look at those companies as well... because the whole goal is we're effectively preceding these deals for our fund and they get to work with our team prior to their seed rounds whereas if we did have the angel group, we would effectively just put them in our CRM and say, "Hey, come back to us in a year." But this gives us an opportunity to work closely with the number of founders at the pre-seed stage.
Gopi Rangan: Very interesting. It's a powerful network indeed when you have hundreds of experts in different industries as a part of your community. I've started an angel investment group in the past. I understand the challenges, especially for new angels to learn how to source deals, how to evaluate them, how to work with entrepreneurs and how to be supportive. It looks like you've created a school, if you may, for new angel investors to learn all of these skills, that's fantastic.
Gale Wilkinson: Yeah. We're actually developing two classes right now. One is a beginner track where there will be modules for people who have never been exposed to angel investing to get the nuts and bolts. And we're creating a track for advanced angels. These are people who've done a number of deals or even a lot of deals so far. And we're sharing with them the case studies that we've done. "Here's what we did right, and here's what we didn't do right. Here are some advanced topics regarding term sheets and due diligence that are the finer points of investing." We think that there's an opportunity for both beginner and advanced angels to continue learning alongside the Vitalize Angels community.
Gopi Rangan: This is incredibly valuable indeed. I want to switch to the last part of our conversation and ask you about your community involvement. Is there a nonprofit organization you are passionate about? Which one?
Gale Wilkinson: I am currently on the board of Chicago Blend. This is an organization that was started about three years ago now and it's all about increasing diversity, equity and inclusion in venture capital within the Chicago ecosystem. It's something that's really, really important to me now that I've been in venture for 10 years. I think focusing efforts on this is really important for a lot of different reasons. As a founding board member there, I have loved working with the director and the other board members over the last three years.
Gopi Rangan: Oh! This is great. Gale, thank you so much for spending time with me sharing specific stories from your own portfolio and your experience as a VC over the past decade-plus. I look forward to sharing your nuggets of wisdom with the world.
Gale Wilkinson: Awesome. Thanks, Gopi.
Gopi Rangan: Thank you for listening to The Sure Shot Entrepreneur. I hope you enjoyed listening to real-life stories about early believers supporting ambitious entrepreneurs. Please subscribe to the podcast and post a review. Your comments will help other entrepreneurs find this podcast. I look forward to catching you at the next episode.