Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Susan Stone was recorded in January 2019.
Susan Stone, Founder and Managing Partner at Sierra Wasatch Capital, discusses their investment thesis around media technology.
Sramana Mitra: Let’s get acquainted. Tell us about you. Tell us about the fund. What’s your investing focus? Let’s get to know one another.
Susan Stone: I’ll start by telling you that I’m a venture capitalist but I came to venture capital from a different path than many people in the industry do. I think I have a little bit of a different approach. I started my career as an investment banker. I was an investment banker in New York and in Los Angeles and I spent a lot of time advising companies, particularly entrepreneurs who were selling their businesses.
That’s when I really got the bug to work with entrepreneurs because I love to help people realize the value of their life’s work. But I don’t want to be an investment banker for the rest of my life and so I took a big career detour in 2008-2009. I left banking altogether with no idea what I was going to do because I’m a big proponent of change and taking risks when one can.
I moved to Alaska and I was a professional ski patroller during that time, which was when I met my husband. The best decision I’ve ever made was to be a professional ski patroller. I still wish I could do that. It’s snowing outside where I am.
Sramana Mitra: Where are you?
Susan Stone: I’m up in Lake Tahoe in Truckee so I’m not too far from you. Just up on over the path, it’s probably raining.
Sramana Mitra: But are you normally based in the Bay Area?
Susan Stone: I’m normally based up here in Truckee and I commute down either to Los Angeles or to the Bay Area. My professional center of gravity is more in Los Angeles than it is in the Bay Area. When I decided to leave ski patrolling, I was very lucky to get hooked up with a family office based in Los Angeles who was doing their own venture capital investing. It was a family office run by an entrepreneur.
He was self-made and he made all his own money. He really took me under his wing and mentored me and taught me to invest like an operator. That is something that I really carried with me. I’ve invested their capital for four to five years. That family supported me and seeded my fund when I decided, in 2016, to launch my own fund and invest against my own investment. I really bring that kind of family office, patient capital, sympathetic with the entrepreneur strategy.
Sramana Mitra: I’m just going to ask you about the fund. How big is the fund? What is that investment thesis that you raise your fund around?
Susan Stone: We’re on fund one right now. I have a partner. His name is Chad Gordon. He’s based out of Los Angeles. He and I raised the first fund. It was only a $6-million-dollar fund. It’s a proof-of-concept fund and it’s fully deployed right now. I’ll explain to you what we’re doing next. The first fund is fully deployed and it’s invested in media technology.
Chad and I both were investment bankers together focused on the media industry. We really believe that the media industry is quite far behind than the rest of the world in terms of their adoption of technology. While a lot of us here have this doom and gloom prognostication of the media industry dying, I don’t think it is at all. It’s evolving and isn’t always building its own technology.
We see real opportunity to invest in the types of companies that are going to help modernize media. Our hope is that they would be acquired by some of these media companies as they start to grow and evolve and as our company starts to mature. So that was a thesis when investing in media tech.