Pascale Diaine is a principal at Storm Ventures, where she focuses on making early investments in B2B companies, specifically in the enterprise software space. Based on Sand Hill Road in Silicon Valley, Diaine takes a keen interest in European companies after her VC firm’s successful investments in UK security startup Digital Shadows and Pipedrive in Estonia.
We sat down with Diaine to talk about her route into the industry after running a corporate accelerator programme for the telco Orange, called Orange Fab, and why she is "extremely biased towards investing in women".
What follows is a lightly edited version of that conversation for clarity and brevity.
Scott Carey, editor at Techworld: How did you get into VC?
Pascale Diaine, principal at Storm Ventures: My road to VC is atypical, I don't have an MBA, I am a computer science graduate from France and spent years in the corporate world.
I was able to make it happen because of my network within Orange. In the first batch of Orange Fab we had a company which is now a unicorn. That became the illustration of open innovation for Orange. That put me on the map and I went on to lead eight seasons of Orange Fab in San Francisco, with six to 10 startups per batch. Two of those startups got follow-on investment with Storm Ventures, they were mentors for those companies, speakers for our events and they asked me if I wanted to be an investor. So I got very lucky to get their trust.
They wanted to give me the ability to write cheques and my first reaction as a woman was to say: 'well, are you sure?' Because I don't have an MBA or financial background. They said they would coach me to get the deal-flow, the mindset, the culture. They said 'we will train you to be a partner and write cheques,' which is music to my ears. That's how I joined and I feel like I did my MBA in the first six months in my job, I was getting pushed.
How difficult was it to get your foot in the door as women in the industry or did your employer, Orange, really help open some of those doors for you?
I like to say that the Orange brand helped me build the Pascale brand. I was able to enter and get access because I was representing Orange. Then I was really able to capitalise on that and build stronger relationships. The blur between private and professional lives in the valley means you can meet somebody at an event, have a good discussion, and you're added on Facebook. The next thing you know, you see a photo with their kids, you are invited to their birthday party and so on, so I was able to use that kind of blurring in the US. Little by little I started having access to much more exclusive events.
How do you feel about younger people or new people to the industry who are looking to get their foot in the door, who have to hustle to get access? Do you think that the way you did it might not be a great route for everyone? Is there a need to make the industry more accessible and a little bit more transparent?
At the time I didn't have a kid, I didn't have a boyfriend, that's all I did and I really loved it. The more people see you, the more they talk to you and you are top of mind and that's kind of how it works. It's also asking the right questions, you can even connect with them on Twitter.
People are pretty open, you can get far by being helpful, constructive and insightful. It doesn't have to be in-person only, but I think in-person helps tremendously. I think I'd ask people to be my mentor. What does that mean? We'll have breakfast every quarter or something. So just building that network of mentors, don't hesitate to ask people to be mentors.
What was it specifically about venture capital that made you want to switch over from your role in the corporate world?
Understanding that you have much more impact and meaning with the size of the cheque you can write for the companies you relate with, that was just empowering and exciting and just bringing a tonne of meaning in my life and career. Cutting the ties with a large corporation and all the politics it comes with.
In your experience how diverse is the industry and does it vary by geography to geography?
Yeah, so Storm Ventures only invests in B2B enterprise software companies. I am extremely biased towards investing in a woman. I want to help our community of females in tech to thrive. The reality is there are less women in the B2B world than there are in the B2C world. I think it comes from the fact that when women decide to tackle a problem, it has to come with a meaning and mission and a why. I think the why is easier to find in something you really care about, something more B2C: just look at companies like Rent the Runway and Away. The future of CRM or ERP might be less exciting.
I think it is changing though, and hope it is changing. But as of today I don't see as many of them and a lot can be done to increase the pull on women to attack the B2B space, but as of today it is ridiculously low.
What are the reasons for that?
I think STEM is a big one, we keep giving a doll to girls and a car to a boy. I have a one-year-old and can see it happening right before my eyes, so it's hard to fight that stereotype.
I think identification is really important, and role models. Really what does it mean to be an entrepreneur? I can understand what a nurse is but it's so hard as a girl to relate and get excited about a career in tech. We need more women holding more babies when they ring the bell at the IPO. Marissa Meyer was the exception, so we're really missing that exciting, inspiring role model.
In your space are there any role models that have started to emerge now that you feel are changing that?
I think of the founders of Stitch Fix, Rent the Runway, 23andme. There's still not enough and not one that has been tremendously covered.
How do you find those companies that maybe tend to get overlooked?
What I do is take a lot of speaking engagements, so any female or minority angle and speak at all these events, take the time to take all the questions at the end of the event. While I don't have the time to mentor everybody, I always tell them like you should do your homework, send me a LinkedIn message explaining how I can help you and I will probably get back to you and take that meeting.
I think another thing that is interesting is the AllRaise initiative in the US. The women that have the power to write cheques means we'll see more cheques being written to female entrepreneurs. What they have done to make it very powerful is to build cohorts of women that are about at the same stage, so they can talk to each other and sometimes they mix them up to learn from rom one level above one of the lender so you can learn from the next level.
I know a lot of your focus is on expanding Storm into European markets. What has your experience been with the differences between the US landscape and the UK landscape, especially from a diversity and inclusion point of view?
My lens is enterprise software and with that lens the amount of B2B female leaders in Europe that I meet with is limited. Mathilde [Collin, CEO of Front] is a fantastic exception but I don't see enough and it's frustrating and even looking hard, it's hard to find them.
I think a couple of initiatives that are interesting is the Sista programme in France to get all the main French VC funds to agree to make a commitment to try to invest 10 percent of capital in female entrepreneurs and hire more females in their VC firms. I'm not aware of any similar initiative in the UK, but I hope that it can spread all over Europe, that would make my life much easier.
What are the type of companies that you like to invest in?
I like any SaaS company that is growing quickly and making a real impact on the landscape. Something that is a little more atypical that I'm excited about is hardware-as-a-service, so the concept of a robot-as-a-service to bring down barriers of entry in that space, we have made an investment there in Cobalt Robotics.
Is there anything that you do at Storm to try and open up routes for other women or people from non-traditional backgrounds to get into venture capital?
Storm Ventures is extremely open to anything. I work with another principal who founded BLCK VC in the US. We added diversity of the founding team to our investment memo. Just to be aware of what's happening as you make investment. Another thing is when one of our CEOs is looking for an external board member we challenge them to look at as many female candidates as male candidates.