Investment partner to applicants: Show us your network
Alexa Spagnola, an electrical engineering and entrepreneurship student at the University of Pennsylvania, heard about Dorm Room Fund through a message from a friend. With an initial interest in biotech, software, and defense, she joined DRF and pivoted to venture capital.
“I’d jumped from one thing to the next, and always enjoyed learning in an iterative way,” Alexa said. “Initially, that’s why hackathons appealed to me. Learning how much venture seems to parallel that made it so interesting.”
From projects at NASA to Google, Alexa decided to try to get into venture capital starting fall 2020.
“I made it my mission to embed myself in the entrepreneurship ecosystem in the subsequent months, so I applied to DRF and was accepted,” Alexa said. “I instantly felt a click that venture is where I belong.”
Still, Alexa said that she thinks about companies from the perspectives of both an investor and an operator. She analyzes what leads startups to succeed, how they raise money, and what investors find most attractive. But she’s also interested in gaining more operating experience at some point in her career. For either role, however, she credits DRF for opening doors and knows the startup world will always be her home.
“DRF changed the way that I thought about my future,” Alexa said. “I really connected with the people of DRF and found it to be such a community of amazing individuals that have all been the best at something, and now want to help founders be the best in their respective fields.”
When Alexa hops on coffee chats with prospective applicants, she says that people ask her about ways to stand out. Her top recommendation? Think about the composition of the network that you have, be it a Wharton club or a performing arts group, and explain how you’re differentiated from other team members from the same school. In addition, explain how you can bring fresh ideas to DRF that would improve how the organization runs.
This past summer, Alexa worked as a managing partner of the summer team. Traditionally, investment partners work year round with a regional team in San Francisco, Boston, Philadelphia, or New York. But during the summer, representatives from each team join as one group. As a managing partner, Alexa takes founder calls, conducts due diligence, and evaluates company pitches as all investment partners do. But she also handles additional logistics including assigning inbound companies to investment partners, coordinating team meetings, and improving internal processes.
In the edited transcript below, Alexa outlines her time with DRF and recommends how applicants, especially from UPenn or to the Philly team, can stand out.
At UPenn, how did you hear about Dorm Room Fund?
Since the beginning of my time at Penn, I’ve always been heavily involved in the hackathon community. That included both being an organizer for PennApps, which is our student-run hackathon on campus, and competing in a variety of hackathons across the country and the globe. I remember seeing a message from Adele, who was an outgoing DRF managing partner on the Philly team that I had worked with on PennApps, encouraging all of us to apply. I reached out to her and a few other partners just to hear more about the group. Everything was virtual at the time, so it consisted of jumping on calls with people and learning more about what DRF could do for me, and also how I could contribute to it. Then I did a lot of research on my own. I remember seeing that DRF asked for an optional link to a website outlining your past experiences. I was so motivated that then and there, I decided to build my personal website.
Walk me through the in’s and out’s of what you do as an investment partner.
This past year has been virtual, which allowed us to accommodate investment partners that weren’t based in Philly, so we added people from Maryland, Virginia, etc. This upcoming year our meetings will be in person in Philly and travel will be accommodated for those partners to make it here. We usually meet at night on Tuesdays for two hours. There’s also an option for satellite partners to join virtually if necessary, and founders will have the option of pitching us virtually or in person in Philly. As a partner during any given week, when you get assigned a company, you review it, decide whether or not it’s fit for a first coffee chat, take the call with the founder, then decide whether or not to pass it to another partner or conduct further background diligence. From there if the second chat goes well we may bring in a company to pitch the whole team. Each week, we will have one pitch; in the past, we had two pitches per week but things will now become even more selective.
The great thing about being an investment partner is that you’re doing the things that you already would be. For instance, I love thinking about what comes next in the space of automation, and I have a background tab open in my brain at all times. I’m thinking about what a company would need to achieve to be successful there, and always keeping an eye out for that perfect storm.
What’s one way an applicant can stand out as an investment partner candidate?
Reach parts of campus that aren’t currently represented among the team, or be part of a club or organization focused on a vertical that’s an exciting investment opportunity. For instance, if there’s a blockchain club on campus, and you have access to the people that are most knowledgeable about this space, you could be the team representative tasked with investing in that vertical. The ideal team is one that represents every facet of campus.
I’ve been heavily involved in campus communities like student government and Greek life. Having a way to know people on campus and being a person they will reach out to is so beneficial. Sourcing doesn’t necessarily have to come through an entrepreneurship organization. It could literally occur in an organic way because this founder is friends with you or knows who you are, and knows that you’re somebody that can be a resource to them as they’re building.
How should someone explain that they have a great network?
Think about particular communities where you see groundbreaking ideas being generated, or give an example of a company that you would source on campus. Dive into the backstory of how you found it, on what metrics you’re indexing, and demonstrate how exactly you would do the job as an investment partner. I am of the opinion that the best way to prepare for any formal role is to fulfill it already.
What should people avoid doing in their investment partner application?
A lot of people feel that to be a DRF partner or a top applicant, you have to have a wide variety of experience in the venture space, completed several VC internships or sold a company. That’s great, but you don’t need to feel daunted by the challenge of something new, especially if you possess all the characteristics of somebody that would be a great investment partner. Don’t feel as though your experiences are inadequate because they’re not obviously correlated. I did not have any formal finance experience when I came to be a partner, but DRF bet that I had the makings of somebody that could do the job well.
What types of research did you do when preparing your application?
I was brushing up on venture fundamentals and making sure that I had a grasp of market sizing and venture math. I also wanted to be prepared when asked for companies that I would pitch to DRF, and ensured I both knew the critical metrics and could tell a cohesive story about why I had conviction in that company. I researched growing industries that excited me, and made sure that I could speak intelligently about what would make them investable in the future.
I’ll hear questions from applicants about fit and what somebody can do to show that they would play well with others. A lot of it comes down to rounding out a team. It isn’t as much of a commodity to be involved in only the same organizations or verticals that current investment partners are already embedded in, so think about how to stand out in order to have an edge.
How does the Philly team differ from other regional teams?
We do have a reputation as the original branch and the HQ of First Round Capital. Because of the presence of Wharton, we do see a high concentration of consumer-focused companies. From the engineering school, I’ve interacted with many high quality tech companies, and of course the biotech presence is strong because of Perelman. The Philly team also covers the southeast United States, and the diversity of thought within the group elevates each conversation.
A lot of times, partners will sit in on cross-team pitches to get exposure to the way other regional branches operate. I’ve heard a recurring theme of partners that have been surprised by the level of detail in the Philly team’s lines of questioning and the way we dive into the nitty-gritty from the get-go. We have less of a separated structure than some of the other investment teams in that Q&A is conducted throughout a founder’s pitch rather than rattled off at the end. Chalk it up to style points, because I do believe the quality of each team’s process is just as high. That’s simply what works best for us.
Then there’s the legacy of the Philly team. Since DRF originated in Philadelphia as I mentioned, we have a lineage of proud alumni who feel strongly about maintaining their ties to us and have achieved great success in the entrepreneurship world. It’s surreal and inspiring to realize this is where they got their start.
How does the summer team differ from the Philly team, whom you work with year round?
One awesome thing about the summer team was being able to work with partners from every single branch in New York, SF, Boston and Philly. Takeaways include thinking about how people that you’re not used to working with tackle problems. When they present a viewpoint on a subject area or a company, you have to understand where they’re coming from, and why they might have the opinion that they have, or even why they’re choosing to present specific facts, which enlivens debates.
One thing I felt was important as a managing partner was to take account of what industries partners were most interested in diving into. If for instance we came across a company in climate tech, and there was somebody that was an expert in that field and or wanted to gain even more expertise in that field, being able to match this company with that partner meant due diligence would be conducted at the highest possible level. It’s those small details that I felt could make a major impact on everyone’s experience.