Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Julianne Zimmerman was recorded in July 2020.
Julianne Zimmerman is Managing Director at Reinventure Capital, a firm focused on minority founders.
Sramana Mitra: Let’s get acquainted. Tell us a bit about your background as well as about Reinventure.
Julianne Zimmerman: Reinventure is a Boston-based venture practice. We are a high-impact, high-return investment practice. Our investment strategy has both impact and financial objectives at its core.
Our specific impact strategy is around breaking the steep and persistent asymmetry in access to capital that plagues founders who are black, indigenous, and women of all identities. Our fund is structured to invest exclusively in US-based companies that are led, controlled, and substantially owned by people of color or women founders.
Within that category, we focus on companies that are at breakeven and are poised to grow profitably. First of all, we know that those are the companies that are positioned to become economic engines and creators of wealth and opportunity. Also we know from prior experience that those are excellent investments.
Sramana Mitra: Do you want companies that are profitable at any level, whatever be the threshold?
Julianne Zimmerman: Because we have a cross-sector strategy, there is not a set figure that applies across the board. Companies that are in health-related technologies and services might have different revenue and business models underlying their profitability than companies that are in digital media or infrastructure. They have significantly different underlying models and assumptions.
What we look for at that breakeven point is that the founding team has validated the business model that is relevant for their sector for the value proposition they’re delivering to their customers. That breakeven point represents the kind of jumping off inflection point for them to go from validation to scale.
Sramana Mitra: That gives me a good segue into the sector question. Do you do all different sectors? Are you sector agnostic?
Julianne Zimmerman: We are sector agnostic. There are some sectors that don’t lend themselves well to a profitable model. Although we look at a lot of health-related companies, you cannot posit a pharmaceutical that would fit our model.
Sramana Mitra: Pharma, biotech, semiconductor sectors don’t work in capital-efficient models.
Julianne Zimmerman: Precisely. We also see a lot of really exciting digital media, but social media doesn’t really confirm. We are less about sector or technology; we’re not so concerned about that. What we need to see is that the founder team has identified a value proposition that they can deliver effectively and profitably and has the potential to scale to significant size.
We are, in that sense, generalist investors. We specialize in assisting those founders we work with to think through the necessary steps in order for them to successfully make that leap from the launch and validation phase into the scaling phase.
Sramana Mitra: You said you invest all over North America?
Julianne Zimmerman: US.