What specific industries should you invest in? This a question that venture capitalists constantly research. [what you’re doing] is both “exciting and rewarding,” says Robin Li, VP at GGV Capital. Listen as Robin share what’s it’s like for her to switch from a career in education to the VC industry and why she finds her job to be so thrilling.
Question: Can you tell us about your background and how you moved into venture capital?
Robin: I was born in Hong Kong. During my childhood and I immigrated then moved to New Jersey. I ended up completing my undergrad degree there at Rutgers University studying Economics and Art History. Then after college I spent several years teaching special education in Brooklyn, New York for Teach for America, during which time I completed a master's degree in education and special education. I've always grown up with a sense of giving back- just because I was so lucky to be in the US. Teaching was my way of doing that. After three years of teaching I ended up going to the University of Chicago for business school. While in Chicago, it was working with the community and with entrepreneurs in accelerators there- that was when I learned about venture capital and have been in it ever since.
Question: Did you start with GGV straight out of business school?
Robin: During business school I interned at a venture capital firm in Beijing called Qiming Venture Partners. That was a very fortunate and lucky part of my life because I've lived in a lot of different places. I' had lived in in Hong Kong, the US, Peru, Italy and Spain but I' had actually never been to mainland China until I was in business school. When I had the opportunity I was like, hey I haven't been to China, but I'm Chinese, how different could it be. So I took the chance and went there and it was a bit of a culture shock because even though I was from Hong Kong, China has grown so much and it's become so different and so fast-moving that it was there where I got excited about what was happening in the cities in China and how big and how much of an opportunity it was and so that's why I ended up starting off in a venture firm in Beijing.
Question: How did you find the business doing business in China versus in the US?
Robin: There's a lot of nuances that are different in terms of the hours that people work in China. There are definitely some differences in terms of how people live their everyday lives, what they consume and how they communicate is very different. In the US we communicate a lot over email and text messages, but in China everything is done on WeChat- not email first.
Question: Can you tell us a little about GGV as a venture capital firm and how you first came to know them?
Robin: I first came to know about GGV through Hans Tung- he was actually a partner where I had interned in China that summer. When he located to the US, he actually joined GGV as one of the managing partners, so during business school during my second internship I worked at GGV capital from Chicago. GGV is a venture firm that's been around for about 20 years. In the very beginning we've always believed that both the US and China were very important tech economies and will continue to be in the future. Our founders opened offices in Shanghai and in Menlo Park and we now have one in Beijing. We manage about four billion dollars over eight funds and are a multi-stage fund- and so we invest in many different stages of a company, whether it's from just ideation or even to up to pre-IPO. We support founders the whole way through. We invest in three core areas, one being consumer internet, two being enterprise software as a service and three being frontier tech- IOT that's more AI robotics. I myself cover consumer Internet and which encompasses things like e-commerce, social/digital media and travel.
Question: What’s it like being a venture capitalist?
Robin: Venture capital is a very exciting and very rewarding career. I'm on the investment team at GGV and a lot of my time is spent on crafting what areas should we invest in and what is our investment thesis will be this year- that changes throughout the year as we learn more. Should we invest in offline retail or exponential retail? Should we invest in health and wellness? These are areas that I would research and upon researching, it would be a lot of talking to founders talking to experts what's happening in this space and should we invest. A good chunk of my time is really spent on talking to founders and meeting founders and then another part would be diligence in a company and so whenever we make an investment we actually have to dive deep into that company. We learn a lot about the founders, a lot about the management team, a lot about their vision, but we also have to figure out if this is an area that has a big opportunity. Is the market large enough and do those numbers make sense. All of that depends on what the life stage of the company is- of course and it differs along the way, but a lot of my time is also spent on should we do this deal as GGV? How much should we invest in the company? Lastly we do a lot of portfolio management as well. Once a company takes investment from us, it becomes a part of the GGV family and so we help support the company in many ways. Typically we take Board seat or an observer seat on the board. We make sure we help the founders with a lot of strategic direction- a lot of hiring for the executive team as well and think through a lot of the problems, but we can't take credit for how great a company becomes- we're really an advisor along the way and a sounding board.
Question: In doing due diligence, how long do you like to watch a company?
Robin: It really depends, we like to build a relationship with a founder as long as possible. Sometimes you meet a company and they're already in the middle of a fund raise and they're like trying to close within the next week and you're like, but I have to do all my work by then and try to meet them and meet the team and do all this research do surveys or something but it's really hard to assess a person after just meeting them for a few hours and so a lot of the companies that we end up investing in, we know for a long period of time. There are a lot of deals that we've done where we built a year-long of relationship with a founder.
Question: First of all when a fund is established is there a certain time frame from start to end when these things need to wrap up?
Robin: Most of our funds are a 10-year cycle and so we typically work with founders for a long period of time.
Question: Will you often take a board seat with a company?
Robin: Typically if we write a larger check and we have more ownership in a company we would definitely take a board seat. It's pretty important to be there as a board member because we get to work very closely with the founders and work very closely with the company
Question: What's the deciding factor of who you work with versus who you don't?
Robin: One it has to kind of fit within the purview of our fund right and so we don't invest in just any category, we have three core categories that we invest in, for example if a biotech company comes to us we probably can't do that type of deal. But what we look for in companies is really the founding team and the founder of vision and what they want to do. Typically if a company asks us for money, we really have to get to know them and get to understand why do they need this money and why specifically venture- because not all companies actually should be venture capital funded.
Question: When you begin working with a company do you find oftentimes these companies will start on one platform and then the market has shifted so they need to redo their visions and there's their platform?
Robin: The market changes over time product changes a lot over time as well. I could give an example, one of our portfolio companies is Slack, which in the very beginning was just a gaming company. Today, Slack is a messaging company that allows people within a workforce or within family and friends to communicate with one another over a desktop version or a web app or a mobile app as well and so when it first started it was really a gaming producer but it really pivoted because they found that they needed to figure out a way to chat internally with each other and thus created an internal slack and saw that really take off and then decided to open it up and pivot the company into this larger opportunity they found that got a lot more product market fit and today they have millions of users
Question: What some of the current trends that you see today in e-commerce?
Robin: Everyone is always talking about retail is dying what is happening, but globally ecommerce globally is still only 23% penetration of all retail spend right. That means that for every dollar that's spent, only 23 cents is really going to e-commerce and so there's still a massive opportunity of where ecommerce can grow, even in the US. Last year, it was still in the low teens in terms of penetration and so we definitely see a lot more of people now using mobile phones to do purchases instead of just desktops. Before e-commerce used to be just buying on your computer, now it has really transitioned to your pocket. That affects a lot of different things whether it's categories that get more e-commerce penetration- so books for example are a lot easier for you to just buy online, but how about makeup and clothes and everyday items that you may need to touch and feel first, and so there's still a lot of challenges that need to be solved around the consumer experience. We also look at a lot of adjacent categories to e-commerce such as payments or logistics as well.
Question: Is it a good thing to see Amazon continuing to get bigger and dominate the markets even more?
Robin: I don't think that like Amazon is going to take the entire pie. Even today they’re still around maybe 40% of the e-commerce spend and I think that they're really healthy for the economy as well because they're pushing for innovation. They get customers better used to what ecommerce is like and they might own a big chunk of the market, but there's definitely a lot more room for longtail or other categories that are not yet proliferating on Amazon.
Question: How does a person contact you?
Robin: My email is, Just reach out to us, we're very accessible. I'm on LinkedIn. I'm on our website as with most of everyone on our team. Come to our conferences, I host conferences in New York and in the Bay Area and I host a series of dinners and events and so we're pretty much out there all the time. I think a lot of times founders hesitate to cold email. I actually cold email founders myself. As a founder you should never hesitate, what’s the worst that could happen.
Question: Where do you see this market heading five years into the future?
Robin: I think that e-commerce will continue to grow bigger and people will find it easier to just buy on their phones, but I do think that the market will change much more on the offline retail side than just the online. I think people will just do one click button buy or replenishment in their home, whether it be over voice or whether it be over the phone right it that doesn't really matter. I do think that how people spend their time offline- instead of going to the department stores that may not be there anymore- people will look for more unique experiences and look for experiential retail and places they can go with their friends and hang together but also consume at the same time.
-Edited for Clarity and Concision