Pocket Sun 

As long as there’s a little space I’m gonna squeeze in and I’m not gonna give up until. I hear a yes. So we definitely incorporated that kind of spirit in our early hunts.

Maxine 

Because the other challenge in being in one of these kind of beating hubs I find is there’s an enormous amount of group think, an enormous amount of people kind of all building and thinking the same thoughts.

And I think that that diversification of thinking can be really helpful to kinda step back into a different ecosystem and think through, you know, a different lens. And as you guys say, kind of see a different pocket of opportunity.

Cheryl 

Like it’s so easy to go down to the Bay Area from Vancouver. Whereas at least we’re far enough away that like the hustlers and the people who want to build world class but can’t for whatever reason, leave this country have a fighting chance.

Okay. 3, 2, 1. Hey, I’m Cheryl.

I’m Maxine.

This is First Check, part of Day One, the network dedicated to founders, operators, and investors. If you wanna be a better early-stage investor, this is the show for you. So TLDR, if you don’t wanna suck at investing, listen out.

So I met Pocket like seven or eight years ago when I was running Start Con. You remember those days? Anyone in the audience? Do you remember coming to a Start Con event at the Randwick racecourse? And you know, there was thousands of people just all over the place. Uh, lots of startups. Kvo was in that, uh, startup alley at one point.

Shout out to, if anyone does remember, please, uh, please reach out. But, uh, that’s where I met Pocket and I just absolutely loved her energy. We brought her from Singapore to Australia and she just absolutely killed it, and I’ve wanted to reconnect with her ever since. Maxine, I brought her to you and you were like, yes.

Maxine 

Heck yes. I also, I mean, she was an OG in the strategy that she’s chasing. So Pocket is now the GP of So G Ventures and she built a foundation before that called SOG Gal Foundation. It’s a really interesting strategy when it comes to investing in underrepresented founders. She was super early to that thematic.

And I think she started investing in that thematic, arguably in 2014, more formally in 2016, which, you know, that is, that was significantly before we started to see this trend. It was really only that kind of 2017 that you started to see that thematic, 2018 maybe even. You started to see that thematic, um, and so crazy that she has been investing there from such a young age as well.

She was 24 when she started investing.

Cheryl 

Being so young to just be like, guys, this is the, this is the investment thesis and I know no one else is doing it like this, but this is how I’m gonna do it. And crushing it.

Maxine 

And crushing it. She’s in some incredible companies and so I think. Super interesting to hear how she thinks about investing behind thematics, but also she is an excellent investor when it comes to consumer, and I know in Australia we are barely consumer curious, even though our biggest outcomes have been, some of them have been kind of at least prosumer in the most generous interpretation.

And so I think excited to get her thoughts on consumer investing, consumer trends, right? How they think about investing at that stage.

Cheryl 

I also can’t wait to talk to her about their investment at Lovery because as a customer, I just think that that’s such a unique investment that I couldn’t imagine doing, but totally a customer and absolutely would love to have gone back and like been on the fly, on the wall for that conversation.

Maxine 

A hundred percent.

And I think actually one of their success stories, one of those like sleepers, incredible, incredible outcome for them.

Cheryl 

Awesome. Well, I cannot wait to get into pocket. Let’s go. Let’s do it.

Adam Spencer 

You’re listening to a Day fm.

Cheryl 

Okay, so it’s been, uh, a number of years since we last talked Pocket, but I am so excited to get into this with you and for all of our listeners out there, we always ask the same question of our guests when they come on, which is, uh, no drum roll needed. What is the first thing that you ever invested in?

Pocket Sun 

Well, the literal answer to that will be an AI company founded by, uh, a black founder, actually back in 2015. And it was my first ever angel investment. Um, I did it on AngelList. Wow. I put a thousand in thousand bucks. Yes. I always tell that story because people sometimes really, uh, underestimate how. I guess, or overestimate how expensive or how like inexpensive it is to get into angel investing.

Um, so yeah, that was my first investment. This company is still alive today. Although if I were, you know, a bigger investor, I would advise them to probably like exit the business, not be alive.

Um, yeah, they’ve been hanging on. Um, and that was my first investment 10 years ago. Wow.

Maxine 

Yeah, that’s impressive as an angel. Yeah.

Cheryl 

But also that you picked an AI company 10 years ago. Maybe they might’ve been a little early.

Pocket Sun 

Yeah. My co-founder’s First Investment was also an AI company, and it’s a digital pathology company using like machine learning and AI to help pathologists make better diagnosis for cancer patients.

Um, and that company is still alive and doing very well, and we invested, uh, with the Soga fund as well.

Um, so yeah, both of us actually started our journey with

Maxine 

AI

Pocket Sun 

Years

Maxine 

Ago, starting strong outta the gates. I’ve gotta say as well, just a shout out to the small check sizes as an entry point into angel investing, right?

It’s something that constantly ranting about, but if more people. You could start really small to kind of get your reps in before you kind of come strong outta the gates. Especially if Cheryl had known that strung outta the gates. Her check first check size was like 20 5K, mine was 2,500.

Um, so I’m much more on the kind of smaller side

Cheryl 

Order of 10 x magnitude.

Pocket Sun 

Wow. Well, I think, yeah, more people should become angels for sure. Like I think in the US there are, I forgot the exact number, but like, I don’t know, one, 170,000 or 1.7 million.

Like people that could actually be, I’m gonna go with probably in the millions, but very few actually are.

Um, and there’s definitely a lack of diversity in the angel demographic as well.

Um, so I’ve been very passionate about.

Kind of bringing the inspiration and education to people who are totally qualified to do it.

Um, but have not getting started on that.

Maxine 

Uh, do you have any tips for this? My small act of rebellion has been, I’ve started asking every single, uh, friend of mine who is a woman who is an operator. Mm-hmm. And or a non-partner investor at a fund, a angel investing.

Pocket Sun 

Yeah. I do that too.

Cheryl 

And amazing. What do you, what do you say when they say no though?

Why not?

Pocket Sun 

I was like, what? I would make them feel like they’re ridiculous. What?

Cheryl 

Why not? Like, I’m confused. Yeah.

Pocket Sun 

Um, I think it’s, it’s such a missed goldmine because you are literally sitting on the social capital. You’re sitting on the experience capital and you have like $2,500 Right. To, to make a small investment.

And sometimes I even tell my influencer friends that, you know, if brands come to you and you think they have great potential, instead of asking for all cash upfront, just ask them to, or shoes. Yeah. Don’t ask for

Cheryl 

In-kind free things. Ask for equity. Just

Pocket Sun 

Like, you know, like if you want to work with them in a longer term and you really believe in them, maybe, you know, just get.

Half paying cash and half pay in equity.

Um, or even, you know, start working with them in an, I don’t know, like kind of an advisory capacity and create, I call it after sleep

Cheryl 

Income. Yeah. Never heard of that one. Yeah, I love that. Better word for passive. Passive, exactly. But after sleep is way better way of putting it.

Pocket Sun 

Um, and I remember many years ago when I was in my Beyonce era speaking at these different conferences, there was one slide I would put in my presentation, which would say like, don’t buy, what is it? Like don’t buy shoes, buy companies.

Cheryl 

I think I saw that slide and I was like, yes, that’s great. I’m here for it.

Pocket Sun 

I feel like my has been just to get. Like women and other people who have been overlooked and uninvited, um, for so long to be on the cap table, whether as an LP, as a GP, as you know, a VC like investing, uh, decision maker or as an advisor or as an early employee, like whatever way you know, it takes, but get on that cap table.

Maxine 

100%. Yeah.

Cheryl 

Get on that cap table.

Maxine 

Get on that cap table. So what was your progression from that first thousand dollar check through AngelList? Did you keep investing through AngelList for a while? Did you start to syndicate, like how did you progress from that first check through to launching Soga?

Pocket Sun 

Yeah, so that was end of 2015 when I wrote my first angel check.

Um, and then I, I made a few more small angel investments. Uh, some are through AngelList, some are through the Soga community that I was creating and organizing at the time. Uh, and I convinced people to take my direct investment for like 3000. Amazing. My winning strategy was that people wanted investors like.

Bus to exist, um, because they’re so fed up with, you know, being shut out the door or being asked very hostile questions or not being taken seriously in the boardroom. And they wanted some refreshing forces, uh, in the world of venture capital. So I was able to make some, you know, really tiny investments, um, and convince them, Hey, you know what, I’m gonna 10 x you know, outperform my check size.

Um, yes. Even though like my financial power has not caught up with my value add power.

Cheryl 

Yeah. I’m with you on that one. I would always tell founders, I won’t be your biggest check, but I will be your biggest champion.

Pocket Sun 

That’s a good one. That’s a good one. I love that. Yeah. And I think founders sometimes they just need a cheerleader.

Right? And that’s priceless.

Maxine 

100%. Yeah. And I think that also it is probably a bigger testament to the value that you can add as an investor if they’re willing to take you on for three k. Like at that point you’re barely covering the legal class table. And so it’s probably more of a testament to your ability to position yourself and also actually add a lot of value.

So when you were first starting out, how did you think about finding amazing companies? Were these folks already in your community or were you like out there sourcing and then like you now have launched a fund and then built that into a second fund? And so as you think about how that deal sourcing funnel has changed over time, what has evolved for.

Pocket Sun 

Yeah. Um, a lot of questions in there. I would say like, so we launched our fund one in 2017. And from 2015 to 2017, we did a few things, um, to really prove that, you know, this is something we wanted to do and this is something we could do.

Um, and these things include one, um, making sure that we could actually source good deals.

Um, so when I was just starting, I first started Soga as a community, uh, six months before I, um, got into the Stanford VC program and, uh, met my co-founder there. So that kicked off our adventure to start a firm together. And after we decided, okay, like we need to shift this status quo, we need to, you know, start a firm, we started making small angel investments and also my co-founder was starting a fund for Johns Hopkins University.

So that was kind of our. Playing field, uh, and experiment to see what it really takes to start a fund.

Um, it was a very tiny fund, but it had all the elements you still have LPs to answer to. You have to do all the, you know, tax, audit, compliance, all that stuff. So it was a wonderful learning opportunity.

So before we launched Fund one, we had already invested in 27 investments and many of them had, you know, um, raised them around combined. Yeah. Between the two of us. Like did you warehouse those and then move them in or? No, actually, so, um, you know, a part of those were, um, the Johns Hopkins Fund.

Um, and I think two of them actually became, later became Soga Investments.

But Soga had a, um, different, um, I guess outlook and we were, you know, doing bigger checks, um, compared to the Johns Hopkins Fund, which was writing, I think. 10 K, 20 5K checks to begin. And I, you know, was writing one k, 2K, three K checks. So yeah. But in that process, like even though your check size is much smaller, does not mean you are not going through the whole process.

It doesn’t mean you’re not doing your diligence, you’re, doesn’t mean you don’t do value add for these founders. So it was a great kind of very steep learning, learning curve period where we were testing like, where can we actually add value? Do entrepreneurs actually like working with us? And to find confidence in, in doing so?

Um, and I think having, uh, a diversified portfolio early on was super important because sometimes I think of an angel investing as subscribing to a newsletter or joining a membership club. You are getting insider scope that’s only shared with investors.

Um. Because you are a small investor in it. So sometimes, like for LPs who are investing like 20 5K checks into my fund, I’m like, I’m thinking like, this is such a great deal for you because you are, you’re, you’re getting a membership to this LP club for 10 years and beyond.

Um, and you’re gonna make money on it. Right?

Cheryl 

It’s a subscription that you get paid to have instead of having to pay to

Pocket Sun 

Yeah, get

Maxine 

Paid

Pocket Sun 

Back. Yeah. Yeah. So I think that’s the fun part of investing.

Um, and we proved out that, you know, entrepreneurs liked working with us. We were very, I’d say, uh, unsure about, you know, can we do this?

You know, what is our value add? I think because we didn’t come from like operator backgrounds. We didn’t come from the finance world or Wall Street, and we were not like employee number. I don’t know, like under 10 at any, you know, yeah. Tech startups. So I think early on I identified with the super connector archetype of being an investor.

Um, I think that speaks to my superpower and my community building experience, um, and. The Soga community was kind of a media platform as well, because as we grow, you know, the subscriber base and the, the, the newsletter reach, um, and also with all these in-person activities and, um, summits, uh, hackathons, global pitch competitions, we were able to really connect entrepreneurs to different resources.

Another thing we did to prove out deal flow before we started the fund was we hosted a global pitch competition for women entrepreneurs back in 2016. And we brought these, you know, women from all over the world who had won their original competitions to Silicon Valley. We invited all the top like Silicon Valley investors that we knew at the time, including Tim Draper.

Um, and he ended up investing like 300 k, um, like on the spot to three of the finalists. And he was like, this is like better quality than like each or like a hundred each. Okay. He’s like, this is better quality than like most, uh, demo days I’ve been to, to Amazing. Yeah. So that was a great, um, validation and also just the, the, the sheer volume, like the competition we were hosting.

We got like 3000 companies applying like in a very short period of time and people were like, oh, most funds don’t even go through 3000 deals in a year.

Um, but we were just getting an insane. Volume,

Cheryl 

They must have just really resonated with Yeah. You know, your perspective and, and who you are.

Pocket Sun 

It just proves that, you know, yeah.

There are so many companies that didn’t get the attention. 

Cheryl 

Like did LPs understand the consu, the, like the super connector? Did LPs take to that? Like how did they react to that archetype?

Pocket Sun 

I think they did. I think they did. Um, because we were writing, I think our value add at the time was a great match for our small check size because you know, back then, like if you’re writing 50 K, 75 K, a hundred K, like 200 K checks, your main role is not to be, you know, kind of the.

Mm, fiduciary duty taker for the company. But instead, like, how can you really open different doors for the companies, like get them exposure to different platforms, different media outlets. Um, how do you introduce them to potential customers? How do they introduce them to potential hires? How do you help them promote their new products?

I think that is the appropriate level of value add for, uh, a check That’s, you know, at our hundred K level where we started with, and yeah, we were pretty aggressive when we started. Uh, we were like going out there like, and outreaching to founders, um, and relentlessly convincing them to take our small check.

Um, sometimes after their round has already been filled or sometimes, you know, when they’re not raising at all. So I think. When you’re starting as a, an angel or a VC, it’s important to be a little aggressive, a little like on the lookout, you’re hunting for interesting opportunities. Um, but also in the beginning, you know, every opportunity looks so enticing.

Like every company looks so promising and you’re like, every opportunity seems investment worthy. What do I do? 100%.

Maxine 

Yeah. It’s, it’s amazing, isn’t it, when you first start off as your like bar calibrates. Right. Especially the progression from. Although it sounds like your angel investment, uh, deal flow was incredible, but the progression from kind of angel investment to fund level and how that bar moves up over time, and then as you get kind of further along, you’re constantly lifting that bar, right.

As the companies get better and, and better.

Um, I think I read somewhere that did you, you invested into Everly Well, or ever now, Everly Health, um, early in their journey that, that was in that category, right? You had to beat down their door to get your, your check in and you got it after this, the round was closed.

Pocket Sun 

Yeah, that was, that was, I would credit that to my co-founder, Elizabeth. Uh, she won that deal. So she heard about the deal at an investor dinner, um, and someone sitting next to her was talking about, oh, we just made this new investment in this digital healthcare company. And when, you know, this other investor was talking about the idea or the model of Everly.

Well, at the time, Elizabeth immediately felt like, oh, this is something we’ve been. Waiting for, uh, we, like we from the get go, like wanted to invest in the democratization of access to the future of living, working, and staying healthy. And when it comes to staying healthy, it’s all about autonomy, it’s about personalization, it’s about kind of, you know, um, patient sovereignty.

Like how do you take control of your own medical data and getting the tests that you need at the right time, um, without having to always, you know, take a half day off.

Um, ‘cause women are busy, right? So when we heard about the company, it just feels like it is something we’ve been waiting for.

Um, and, and the round was already oversubscribed, so we started this.

Chase. So Elizabeth really took advantage of the fact that, you know, the founder, Julia and her both worked at Deloitte.

Um, and Elizabeth grew up with, um, two doctors as her parents. So she had a lot of healthcare expertise and has network in, you know, adjuncts, Hopkins.

Um, and I remember like Julia was thinking about getting some press, but it was not her strongest suit at the time.

Um, so we proactively curated this whole list of like tech journalists that she can reach out to that might be relevant for this press story.

Um, just doing everything that we can to show that we understand your business. We’re here to be of service and you know, we’re, we’re worthy to get on your cap table.

And eventually Julia convinced one of her board members. Who was an early investor to reduce his, um, check size in this round so that we can fit our a hundred K check in.

Cheryl 

Wow. I love that.

Pocket Sun 

Yeah. So I think being an angel or being an emerging manager, you have to be entrepreneurial. Like you have to believe, you know, there’s still a gap.

Like as long as there’s a little space I’m gonna squeeze in and I’m not gonna give up until I hear a yes. So we definitely incorporated that kind of spirit in, um, our early, um, hunts. Love that household.

Cheryl 

I’m always pestering VCs like, Hey, you got a little allocation there for me. I’m good for like a hundred, 200 k and a whole lot of value.

Pocket Sun 

Exactly. Yeah. And then, you know, it’s land and expand, right? Like as long as you land a space on that cap table, then there’s,

Cheryl 

I’m still working on the expand part. Not so much on the expand, but lot definitely landing. Yeah, that’s a great start. Like you land for Maxine’s already on the expanding part.

Maxine 

Um,

Cheryl 

Yeah,

Maxine 

I think, I mean, I think it’s a, um, once you’re in, right, and I, for your fund, do you invest first check and then you invest follow on checks, or do you just go.

First, just like a single check for us. We just write a single check in. And so we are more focused on like expanding the relationship over time. But definitely, uh, from fund one to fund two, hopefully there’ll be some expansion.

Cheryl 

I meant like expand, as in you write bigger checks than I do. Oh,

Maxine 

Truth. I dunno.

I’ve seen, I’ve seen your syndicate bring in some weight, uh, vitro on average. Yeah.

Cheryl 

Thanks, Maxine.

Pocket Sun 

Yeah. When I say land and expand, like I think from our experience, we’ve, you know, sometimes we start with a little check, um, just to, you know, be in the inner circle and then we grow the relationship with the founder and eventually like, they’re like, you are so valuable, we’re gonna give you super parata, right?

We want you to have a bigger stake on the cap table.

Um, and we want you to be, you know, more involved. So there are cases where, you know, in the beginning we couldn’t even get into the company.

Um, and eventually the founders, you know, create a round so that we can get in, uh, and.

You know, eventually, um, when hardships happen, they realize that, wow, you know what, like Pocket and Elizabeth and Soga are actually my true allies.

And, you know, there have been cases where we then get on, uh, the board and kick out the original board members. Wow. And we become the lead investor and we become, you know, the closest, the most trusted investors that they have.

Um. So there has been several cases actually where we went through that journey with these founders.

It’s fun and it’s like you get into the big league and you get to, you know, structure recaps sometimes.

Um, for, for the listeners, recap means usually not a great thing are when, when a company goes through a down round, meaning their, like current rounds valuation might be lower than the previous rounds and they really need to incentivize people who, um, will participate in this round.

So they might kick out some old investors who are no longer active, who have lost conviction in the company or couldn’t deploy in the new round, and you kind of restructuring the whole cap table.

Um, so ownerships will change.

Um, it’s an opportunity for you to take bigger ownership, but.

If you can’t participate, like a recap is when previous investors might get kicked out entirely, uh, and lose your entire, um, stake.

So it’s kind of a sharky zone, if I may, but it’s also fun. It’s like you get into the deep end of venture investing with some sharks. With some sharks.

Maxine 

It they are, there’ve been a lot of them going around right. In 23, 22, 23. And then even some still in 24. Yes. Although I haven’t seen as many this year, but it, it’s been, uh, a lot of recaps with the market, kind of some of those overvaluations flushing through the market.

Pocket Sun 

Yeah. Yeah. I know there are investors who are very bearish about recaps. They’re like, you know, it never works.

Um, but I think with women led companies, for example, like, because investors.

Are more likely to lose confidence in them more easily.

Um, sometimes, you know, the round dynamics do not properly reflect the potential of the company.

And I think that’s where we could have an arbitrage, um, opportunity.

Maxine 

Super interesting that I’ve actually never thought through that, right? Like if the, as you said statistically, people from underestimated backgrounds are, as the name suggests, underestimated, underestimated in these moments. Yeah. Ta as described on the packet.

Uh, and so in these moments when there is these recaps going, or just even in these moments where you are funding these tough periods, they’re also less likely to get kind of more, um, risk forward capital coming through to push them through these lull periods. But also in a recap scenario, there actually is upside for folks that are deep believers in the founders themselves or in the companies in those recaps.

Have you seen. Maybe for the listeners, if you could give them a little bit of a sense of like, how is a recap cap done? How for early investors can you get pushed out of a company? What opportunities are they in? A recap actually to lean in and, uh, maybe capitalize more value to them if they deeply believe in a founder and a supporting them through a recap like that.

Cheryl 

And is it for all investors or like only VCs? When you say investors, are we talking angels too?

Maxine 

I think it’s usually VCs. Right. Have you ever seen an angel participate in a recap on the other side? Right. Like not being the ones to like recapped out of a company, but I don’t think I’ve ever seen it.

Pocket Sun 

Yes. I, I’d say like usually when a recap happens, um, they recap so that people who participate in this round could get.

You know, better ownership basically. And, you know, people who don’t participate get kicked out. So I’ve definitely seen angels come back to the table and participate.

Um, either, you know, in, in their parata amounts, sometimes even beyond that.

Um, because like for savvy investors, it could be an interesting opportunity.

It is. It feels risky because usually when a company goes through a recap, that’s when you know their runway is low and, you know, maybe they need more time than they originally thought to reach the next milestones. And some investors are not comfortable with that. And also, you know, each investor has different.

Taste flavors and, you know, um, risk tolerance, right? Sometimes they’re like, oh, if you don’t reach your girl, your your first try, then you’re dead to me. Right?

Um, or if you have a big enough portfolio and this was not an important investment for you, then you’re like, uh, whatever. And like, I’ll just give this up.

So it really depends. It really depends. When a recap happens, usually, you know, there will be one firm or two leading it. A lot of the times it’s insiders leading the recap, but sometimes it’s an outsider that’s taking kind of previous investors all out and they’re coming in, um, with.

Like majority of the round and setting the terms so that they can take, you know, sometimes like 20% or even higher ownerships sometimes it depends.

And sometimes there are like warrants options, like and liquidation preference, all these additional protection measures so that the people who are coming in at a more risky moment in the company trajectory can get rewarded because, you know, at the moment it might seem like, oh, this is not a very investible company.

Right. Yeah, it’s interesting and, and because we mostly invest in diverse founders, sometimes we see that, you know, when things don’t go as well, um, the first thing that any like white male investor and board member think of is.

Oh, let’s just kick the female CEO out. Like that has happened so many time.

Cheryl 

That’s obviously the problem, obviously. Yeah. Obviously.

Pocket Sun 

So, so like that’s an obvious kind of, I don’t know, um, lazy decision or opinion. Right. And there have been a few cases where we’re like, well, we don’t think that’s the real issue and we need to step in if we really still believe in the company.

Cheryl 

Yeah.

Fighting the good

Pocket Sun 

Fight pocket. Yeah. We’ve kicked out some, you know, much, much bigger investor, um, and got them out, out and beat their term sheets and like sitting on the board instead and kind of eventually, you know, um, removing their influence, uh, and put the company on a more.

Promising cash flow conscious trajectory, and that has been very fulfilling and but also very challenging.

Maxine 

Do you notice, because you at Sigal, you invest both in consumer and in B2B, right? You don’t have a particular kind of vertical that you invest in. Have you noticed a difference in the way that boards approach these kinds of moments or investors approach these kinds of moments across consumer and B2B, especially over the last, call it three or four years, where the market was very bearish.

Did the market approach it differently and did investors approach them differently depending on consumer or B2B or are.

Just as tough, just as dynamic moments in the company when they go through a recap.

Pocket Sun 

I wouldn’t say, you know, the difference is between consumer versus B2B. I think it’s more based on the traction and the health of the company itself.

‘cause it doesn’t matter what sector you’re in. Like if you’re, if you have healthy cash flow and you don’t have to worry about.

You know, like running out of money soon or having to cut a bunch of people or having to make some, uh, critical decisions, life death decisions, then, you know, like the board is not under that much pressure.

Right. And you don’t have to make very drastic moves. I would say, like I’ve seen some really interesting pivots in the past few years. I’d say a lot of our consumer companies have an enterprise component, whether it’s through, you know, like channel partners or having, having B2B partnerships, um, as a big part of their revenues.

So I think there are few fewer companies who are like pure consumer, right? Like usually they start consumer and then they go into enterprise and enter like business contracts, et cetera.

They stand on different legs.

Cheryl 

That’s really interesting ‘cause I feel like when you look at your portfolio online.

A lot of them look like pure consumer plays. Mm-hmm. Which, like for context in Australia, we invest very little in consumer. Like there just like is not a, a big consumer VC or investment, um, environment here at all, which number of factors for that. But still that’s the case. So we’re always interested in like anybody who is making investments in that space.

And also I feel like we kind of got off topic a little bit recap was super interesting, but it might be healthy to go back to, uh, maybe just like walk us through your investment thesis.

Pocket Sun 

Yeah, so we invest in pre-seed and seed companies, um, mostly in the US and Canada, um, led by diverse teams.

Um, we invest in the future of living, working, and staying healthy. So we’ve covered everything from consumer tech, digital health and wellness, uh, future of work and sustainability companies. So I guess the ethos is that we want to invest in things that touch people’s lives and create new categories and address unmet needs.

‘cause I, you know, we, we really believe that historically, systematically there are, there are so many blind spots, um, of the current system that need to be.

Redesigned to reflect, you know, the diversity of people.

Um, and Gen Z is the most diverse generation ever. So we are always kind of looking forward, thinking about the younger generation’s needs, um, and what holes need to be filled.

Um, how are they going to be living their lives, going to school or not? Right?

Um, spending money or not going into relationships or not, uh, how they take care of their health, um, physically and mentally and maybe spiritually even. Yeah. How they think about the future of the world. So, yeah, I think it’s fair to say that we’re taking a more generous generalist approach now that with fund two we’re actually kind of taking a step back on consumer, especially consumer products.

And we’re thinking, so what do we want to invest in really? I think the answer I have right now is we just want to invest in really killer world class, um, diverse founders who have a unique point of view, who really have insights in the space they’re building in and could execute like no one else. And I am super open and willing to learn about new spaces with them, whether it’s, you know, I don’t know, space engineering or financial derivatives or, um, map biomanufacturing.

Um, I think I, I just wanna invest in kind of cutting edge frontier, creating category, defining, uh, type of businesses and people.

Maxine 

Super interesting. How do you think about, um, like as you say, your thematics are quite broad and as you said, you’re like interested in playing around on the edges of that.

Something that I’m constantly thinking about, I would love your thoughts on is like, how do you know when you are outside of your zone? IE you are in the kind of zone of naivety as opposed to your zone of understanding and how do you defend that line? Or are you constantly playing around with it because, um, that line is constantly moving?

How do you think about that?

Pocket Sun 

I think my confidence in entering new areas usually comes from two places. One is the existing network that we’ve built. So from, you know, over 10 years ago we’ve been building the Soga network and that consists of like global entrepreneurs and we’ve since built this large LP family.

Like between fund one and two, we have over 200. LPs who are strategic individuals, families, institutions who have, you know, a variety of expertise and networks, um, that they bring to the table. So constantly I feel like, you know, I’m able to absorb, uh, information, uh, and understand how to connect the dots.

So whenever I enter a new field, I constantly feel like, okay, even though I know nothing about, you know, um, AI generated proteins right now, but like within two days I found three people who are like PhDs who are experts in the field to help me understand, to help me diligence the company and give me their insider takes.

So I think I’m really good at very like, fast learning type of thing.

Cheryl 

Well, it helps to be a super connector. If you’re super connected to all those people, it’s easy to tap into their knowledge. Right?

Pocket Sun 

For sure. Yeah. Yeah. Also another piece comes from, you know, we are not just randomly investing in things, right?

We’re investing in things that align with the themes we are seeing in the future. You know, these are trends or, you know, kind of little red dots that I’ve been collecting little information on. So I, I think, you know, it’s easier for me to understand the context or to understand will this be a thing or not.

So coming from the, the more macro level, if we understand like the core user demographic, which is, you know, young millennials and Gen Z, which we are like immersed in that world all day long, then it’s easier for us to understand will they use this product? Like, do we think compute is gonna replace, not replace, but be as big as oil and gas and, and.

You know, having kind of point of view on these newer things. Do you? Yes. We actually just invested in a company that’s betting on that future, um, where compute is gonna be, you know, kind of a natural resource, like a, a raw ingredient of these, you know, tech companies. Uh, and it will become a huge financial market as well, which doesn’t exist today, but will exist through this company that we just invested in.

Maxine 

Super interesting. I really like that framing of it, right? You are actually using to resources that have been compounding for you, one being your network and two being your knowledge, right? Because you’ve been investing behind these thematics for a while, right? It’s actually surprising how much touches and concerns each of these thematics.

So they might feel like net new frontiers, but actually you’re compounding on, I, I like that you’re framing there the little red dots that you’ve been collecting to kind of put it all together to place you very well when it comes to a kind of net new thesis. Especially the idea that compute, for example, is a raw material and we’ll rely on it, uh, in the future.

Pocket Sun 

Yeah, and I think sometimes like founders, you know, they, they want some breadths on their cap table as well. Mm-hmm. Like, it’s not like, you know, if I’m a biomanufacturing company, all I want is biomanufacturing people on my cap table.

Um, you need people who understand different sides of the business. You know, um, you need people who can help you.

Build your founder and company profile. You need people who can put you on the right spots, podiums.

Um, and you need people who can build, you know, global go to market kind of connections for you, um, or people who can understand your mental health challenge and understand, burning out and understand how work life balance is so difficult and you have someone to talk to.

So I refuse to vote myself out when it comes to a new area. Um, and I feel like there are a lot of value add that I can bring to the table without being, you know, a subject matter expert in that field specifically.

Maxine 

Hundred percent. Yeah. So you invest globally, right. Speaking of kind of frontiers that you invest in, what ecosystems are you most excited about at the moment around the world?

Are you crashing on San Francisco and or the US like a lot of folks at the moment, or are you looking further afield

Cheryl 

and how do you feel about Australia? Small plug for the tiny island asking for a friend.

Pocket Sun 

Oh, interesting question. So in fund one, we were actually more international. Uh, we were a $15 million fund at the time.

We invested in 42 companies and many of them were outside North America. We invested in a company in Australia, one in Singapore, one in China, one in Canada, like two in the uk, um, one in Sweden, like we were.

All over. And in our angel investing, Elizabeth and I have also invested in like other continents, uh, like Africa and beyond.

And like, so with fund two though, like we have become more conservative geographically, mostly because of LP constraints.

Um, so we’re more focused in the US and could also invest in, in Canada, but we’re not really doing that many international investments anymore. I think the challenge, especially for an angel is different jurisdictions come with different, you know, compliance requirements, like different tax stuff and different legal systems.

I remember when I invested in the UK for the first time, um, knowing that we’re all gonna be common shareholders was such a like, what moment for me? I was like, no way. This is so weird.

Cheryl 

Wait, there’s no such thing as pref shares in the uk.

Pocket Sun 

I think that over there, like, um, everyone is a common shareholder.

Maxine 

Yeah. I think they put contract contractual supports around it, right. As an investor. But it’s not like, it’s not a different class of shares, so you don’t have exactly the same protections. But correct me if I’m wrong pocket, I haven’t been as close to it as you have

Pocket Sun 

That that was so long ago. Weird. Yeah.

So we realized that as a very small team, it’s, it’s very difficult for us to, one, like having, you know, the understanding of, you know, all the logistics of, you know, running that investment. And number two, we realized that. Investing, um, in, you know, a more slightly more concentrated geography gives you a more established network that you can tap into for value add.

So, for example, like when I think of my Singapore investment or my Australian investment in Fund one, I feel like I wasn’t as effective as an investor because, you know, I didn’t spend a lot of time establishing relationships with 10, like series A investors that I could send that company to. And for that Singapore one, like they were raising series B, but there were only like, say like four or five series B firms in town and they all talk to each other.

So once you get one nose, it’s like you’re, you’re kind of out of favor and you have to go elsewhere to raise that money. And that kind of, I guess, lack of variety or lack of different flavors in later stage funding is not something that I like an early stage. Emerging manager could help solve. So I think it’s not, not doable, but it is more difficult, um, to be successful, um, as an angel investor or as a VC investor across different geographies.

Cheryl 

Yeah. What about Canada, though? Like you’re base there. What’s your, what’s your view of the, the Vancouver and Canada ecosystem?

Pocket Sun 

Yeah. My hot take is, is that, um, well I’m, I’m moving away from Vancouver next year.

Cheryl 

Oh

Pocket Sun 

No,

Cheryl 

That’s your hot take that you’re moving away. That’s a very hot take. You

Pocket Sun 

Heard it here first.

I think Vancouver has potential, but the city is slow. I feel like Vancouver is a little bit like the Hamptons. I think people here are Mm. More into, you know, the outdoors and. Enjoying a healthy life, um, then, you know, creating something really world class. Yeah, I think it’s a bummer.

Um, I had high hopes for Vancouver and I think, you know, I have made really good friends here and there are some really like cool, ambitious people here too.

But just the level of connections and the level of, I’d say like world classness. I’m not satisfied.

Maxine 

Yeah, it’s tough to hustle when you wanna ski Grouse Mountain every day, right? Like if you’ve gotta block it a couple hours for skiing.

Cheryl 

Yeah. Uh, not so much grouse. Not so much grouse. Let’s go Whistler.

Maxine. Come on.

Maxine 

Yeah,

Cheryl 

We hike grouse, we ski Whistler

Maxine 

Whiskey whistle fair. But that is further away, right? That takes a longer time for you to get to, to go and hustle. Hustle to that. But my point is, is that like, I, I think it’s a really tough tension, right? Between like going all in and hustling hard in that moment.

Uh, versus if you’re prioritizing other things, which I think to be very clear, valid, right? Like, I think it’s just a choice between where you prioritize.

Pocket Sun 

Yeah. And I think a lot of people who actually, you know, really want to build like billion dollar companies, many of them would go to the Bay Area to do that because it’s a more inducive environment.

And I think in Vancouver there aren’t that many angel investors. Well, I left, so, you know.

Maxine 

Yeah, I know. So really Pocket is leaving as a result of Cheryl leaving Vancouver just

Cheryl 

Yeah,

Maxine 

A decade later. This

Cheryl 

Is, this is the problem. If I had stayed then, you know, I know you set me up for failure, Cheryl.

Pocket Sun 

I’m so

Cheryl 

Sorry.

Pocket, this is on me. Yep. I’ll, I’ll take the, I’ll take the blame on this one. But yeah,

Pocket Sun 

If you think about it in the US like in New York, San Francisco, la like you can convince your dentist, your, you know, physio, like your lawyer to invest in your startup.

Um, and it’s such, such an environment where everyone is excited about tech, about innovation versus, I think Vancouver, most people are more, you know, into real estate.

Cheryl 

I’m hearing a lot of similarities.

Maxine 

Yeah. I’m giving my mouth shut about this because I,

Cheryl 

I, I can’t, I can’t keep it shut anymore. I’m just like, oh, what is she, which, which city is she talking about again?

Maxine 

Is she mispronouncing Sydney? Yeah. It’s very similar. It’s very similar in Australia in some ways, but I also think that like

Cheryl 

We’re far enough away that we don’t lose, like it’s so easy to go down to the Bay Area from Vancouver.

Yeah. Whereas at least we’re far enough away that like the hustlers and the people who want to build world, world class, but.

Can’t, for whatever reason leave this country have a fighting chance.

Pocket Sun 

But I think Vancouver has a great lifestyle, right? And people here are like sunflowers. You know, when the sun is out, everyone is out.

Like there are so many cars on the street, everyone is on a Stanley Park. I think they, they care about wellness, they care about balance, which is, you know, a great thing. But for me, I think it is easier for me to, to find really exciting co-investors to work with. It’s easier for me to find things that are really leading the trend.

Um, in Vancouver, there are a lot of academic adjacent projects.

Um, so many things coming out of UBC, for example. Yeah, I think it creates a particular type of, of ecosystem. I like the Toronto Waterloo ecosystem a little more. I think there’s more, I. Just tact talent coming out of Waterloo left and right and coming out of University of Toronto.

And it’s a, it’s, it’s a much bigger ecosystem. ‘cause Vancouver, like there are, the population is only 600, 700,000 people. It’s much smaller than most people think. Yeah. And I think PE investors here are more conservative.

Uh, and again, like there aren’t many consumer companies here. Like I do think there are a lot of similarities, um, between Vancouver and the, the Aussie, um, ecosystem.

Maxine 

A hundred percent. Yeah. It’s definitely a zeitgeist. I feel like I’m watching shift right? 20 19, 20 20, 21. There was lots of this like, um. Because people were working in distributed fashion and, and were working more remotely than they’re today. There was a lot more of these, like thriving, much more local ecosystems.

But I feel like I’m watching quite a strong centripetal force back to places like the Bay, especially if you’re building like app level ai, maybe in consumer, a pretty strong cental force towards LA and New York. And so, and it just feels like it’s accelerating, which I don’t, I think the narrative I’m hearing a lot of is like, you have to be in the bay or you have to be in New York, or you have to be in la.

But I also think that there’s opportunities for like a little bit more gray in that, right? People spending a lot of time in the bay, spending a lot of time in New York, spending a lot of time in LA and absorbing those bits. And then also getting opportunity. Operate in cheaper ecosystems or in ecosystems where they can get a differentiation of thought.

Because the other challenge in being in one of these kind of beating hubs, I find is there’s an enormous amount of group think, an enormous amount of people kind of all building and thinking the same thoughts. And I think that that diversification of thinking can be really helpful to kind of step back into a different ecosystem and think through, you know, a different lens and as you guys say, kind of see a different pocket of opportunity.

Pocket Sun 

Yeah. So in Fund one, like when we think of our biggest, you know, our most successful companies, um, they are coming from, you know, not the usual suspects, um, places.

Um, Everly Health was, um, in, well, well still is based in Austin, Texas.

Um, love Eery is based in Boise, Idaho, um, function.

Cheryl 

By the way, I’m a cu, I’m a customer.

Pocket Sun 

Oh, they are awesome. They’re doing so well, like.

I think 230 million in revenue last year.

Cheryl 

Wow. Crazy. Didn’t they just do a like retail raise? ’cause I considered investing.

Pocket Sun 

Oh, cool. But it’s so late stage now.

Cheryl 

Yeah. That’s why I didn’t, ‘cause I was like, that’s not the type of investor that I am, but like, as a customer.

And it’s one of those things that like, it like elicits an emotional reaction.

Pocket Sun 

Yeah.

Cheryl 

I, yeah. I very much considered it.

Pocket Sun 

It’s such a great brand.

Um, they’ve done a fantastic job.

Yeah. And other, our other unicorn company was from like Philadelphia. You know, these are not your usual places yet. They were the, the, the best performers in fund one.

Cheryl 

These are all kind of consumer companies, right? Like again, you say there’s an enterprise. Element to some of your consumer companies, but a lot of those are consumer companies. Would love to understand a bit more about like how do you assess the right stage to invest in a consumer company and like what is the return pro profile that you’re expecting on a company like Lovery, for example?

Pocket Sun 

Yeah. Lovery, we, we invested in 2017. We were in their friends and family. Right. We were actually the only VC firm that invested in their friends and family round. That’s cool. Very happy about that. And it was before they had a. Website even like, so no product pre-launch. Love it. And we were really betting on the, the combo of Jessica and Rod.

Like Jessica is so product obsessed.

Um, and Rod had great operational experience.

Um, previously took a company like from, you know, growth stage to IPO. So has seen it all. Jessica previously had a successful exit with Happy family, uh, so to Danon group for I think over 200 something million dollars.

Um, so they had a big vision when they came together and they both have multiple young kids.

Their approach with the design thinking ethos and how they would just sit for hours at customer’s homes, watching how kids and parents, you know, play and interact with toys.

They were. Really doing the, the right approach, um, with this huge industry.

Even though, you know, as a women-led emerging fund, people are like, your first investment is in a hair care company, AKA function of beauty, and then few months later you’re investing in baby toys. Like, are you serious? Like you are really holding yourself into, you know, the most girly things ever.

Cheryl 

I’m really struggling to understand that pitch too. Like they had no website, no product, and they came to you and they’re like, Hey, so we’re going to ship really expensive, heavy toys to parents every month, wanna invest?

And you’re like, yes, I’m in.

Pocket Sun 

What’s interesting was we originally got in touch with Jessica to pitch her to become our LP and then, you know, midway through Jessica is like, well, I’m thinking about my new company and I’m targeting millennial parents. You two are, you know, on the younger. Side, tell me what you think of this.

And we were like, oh, we, we smell something.

I love it. The hunted becomes the haunted.

Yeah. So we eventually, like, we were like, we need to invest in this company, give us some allocation.

Um, so we squeezed in and Jessica, like with her previous company, she’d actually never raised from venture capitalist before.

So we were, I think the first VC firm that she ever worked with. That’s another really proud, fun fact.

Cheryl 

So cool. So what’s the formula there? Like really, really experienced founders that have deep domain expertise and crazy consumer idea equals profit?

Pocket Sun 

I think so. We really wanted to invest in companies that were, you know, global in their thinking.

Design driven meaning like they actually consider the context and environment of how a product is being used.

Um, who is using them, what are the pain points? And I think how, like their point of view on the market was very spot on.

They were saying, well, like, you know, there’s never a lack of toys, but most toys are just distractions.

They’re not built for educational purposes. There has been amazing research and studies coming out of top universities, but this, you know, this level of research has never been applied in commercial products.

Uh, and they feel like there’s an opportunity to build really intentional and well-made products.

Um, for the millennial parents.

And, you know, millennial parents are different from the previous generation parents. You know, we are all. Pretty much like dual career kind of families. You have to have quality time with your children, but your time is very limited. So how can you design something to create safe, like kind of a, a peace of mind for modern parents who are immersed in a sea of options?

So I think love every is so smart in creating such a trusted brand with curated products at the right time so that you don’t even have to think about when to do what.

Um, it just kind of is all set up for you and it’s made beautifully if it’s your home’s style and aesthetics. Right.

And I remember when I.

Bought it for my niece and I would go to, you know, um, my cousin’s place to, to, to play with her. And I actually loved playing with those toys. It’s, it’s good stuff like it. I think they’ve built such a superior product.

Um, and my children really resonate with it. Like they love playing with love every toys.

And yeah, we were just really convinced on their ability to build and their ways of, you know, researching the market and like building the right thing for the right people. And yeah, they just immediately became popular.

Um, all the celebrities started using them and they, I remember their first year’s revenue was already like.

Very high. So it was, yeah, it was just, um, a winner from day one.

Maxine 

They do say that, like for consumer, it hits harder than any B2B. Like if you do it well, it hits harder. And that’s reflected in some of the biggest companies in America, right. Are, are consumer companies. But it’s just, it, it’s traditionally hard to pick.

But it sounds like, uh, you guys have done some, an excellent job of picking great consumer or B2B and B2C blended businesses in your fund. One.

Pocket Sun 

Yeah. And Everly, well, uh, Everly Health is another interesting example. They started. B2C.

Um, they started as a direct to consumer at home health testing kit.

Um, and you can do, you know, 30, 40 different tests on that platform.

And we thought, you know, this is what we think should exist. And later, um, they were able to actually acquire their downstream partner, like they acquired the lab.

Um, and they also started acquiring, you know, uh, they acquired NATO list, which is fertility focused, uh, testing company.

So they started serving much bigger clients, like they started working directly with insurance.

They started becoming the telehealth backend for a lot of digital health companies. They were just like, once you build a very good consumer product and having all the data points and the trust of people, like, it actually becomes an easier sell when you go to these payers, insurance companies, um, enterprises.

To adopt your product on a bigger scale. So this, you know, consumer to enterprise pathway has been tried, um, and true for many of our portfolio companies.

Um, and I don’t really think there’s a huge line, um, between consumer enterprise, if you think about Canva for example, right? Like these fascinated individual consumers and then became a work product and a necessity that people can’t live without.

So, yeah, and many others did the same, like Slack, um, or Figma notion, et cetera.

Um, so yeah, so I think it’s definitely a very viable pathway, uh, across different sectors.

Maxine

I feel like I have so many more questions on consumer, uh, and so many more. I would love to out, but sadly, I think we’re coming almost to the end of our time together, so would love to know from you.

The question we always ask our guests, uh, at the end of our conversations is, uh, what is your biggest big co moment, a moment that you have felt really brave?

Pocket Sun
There are, there are several. I think I’m, I’m learning to become more and more courageous ‘cause there are just so many challenges that will come your way.

I think the first one was probably when I.

Went to the US by myself, uh, at 18 years old when none of my family members had ever been to the US and I was the first one ever to, to go there, um, into a completely strange, um, new land. And English was my second language and I never went to international school.

So it was just such a big different environment for me. And I think that’s where my entrepreneurial journey actually began. Like for, for, for me to reestablish a new identity, a new circle, a new everything. And to, you know, from an outside perspective, starting to reflect on how I was, brought up, my cultural context, my belief system, and start to embrace more differences, more nuances and more different thinking into, into my world.

So yeah, I still think I was a very brave young woman back then, which set the foundation for.

The rest of my life. Wow.

Cheryl

Yeah.

Maxine

The moving of countries are like, I don’t think it can be overestimated. Especially if you move to a country, as you said, where you dunno anyone, your family’s not with you. Like that’s a huge step.

Cheryl

You’re starting from scratch.

Maxine

Starting from scratch. It’s such a big step and does take.

That like moment of realization that you have been a goldfish swimming in water and you suddenly are able to see that water. Of course you’re a new goldfish in a new set of water, but being able to be identify, oh wow, that is actually different.

Those are like cultural constructs as opposed to personality constructs or, you know, things taken for granted. I think it’s such a transition period. I love that.

Pocket Sun

Yeah, and I think that it, it feels the foundation of empathy and compassion for, for you to be a good investor. 100%.

Cheryl

Thank you so much for coming on here today.

We have loved this and learned so much.

Pocket Sun 

Thank you both. It’s been super fun. Thanks so much.