You founded Cross Creek because you saw private companies going public later in their life cycles, and you wanted to capture their value creation earlier. How have you been able to capture more of this value?
Over the last decade, the market capitalization of the average initial public offering (IPO) has increased significantly. This trend has been driven by additional regulatory requirements on public companies, an increase in capital available to late-stage private companies, and the willingness of venture capital firms and company management teams to wait longer to exit the private markets through an IPO. Cross Creek is able to capture more of this value by investing in the late-stage private growth financings that occur prior to the IPO.
What is Cross Creek’s specific focus within venture capital?
Cross Creek focuses on late-stage venture-backed companies. This approach allows us to invest in companies with proven business models and quantifiable addressable market while also capturing the value creation that has shifted from public to private markets over the last decade. We believe the risk and reward during this window in a company’s life cycle is most opportune.
What are some current trends in venture capital, especially in the wake of the COVID pandemic?
The venture capital asset class has proven to be quite resilient, given its outsized exposure to the technology sector, which has been less affected by the COVID pandemic. There has been a seismic shift in our daily routines, forcing an acceleration in the digital transformation already underway. Venture investors sit at the epicenter of this technological surge identifying and investing in innovative companies reimagining the way we work and live. Telemedicine and online education are powerful examples of how our new day-to-day routines are changing.
Venture capital is an extremely male-dominated industry, and yet you've succeeded for three decades in the field. How does being a woman in a male-dominated field shape your investing perspective?
I was fortunate to start and grow my career at Wasatch Global Investors, a small-cap equity manager, which gave me incredible responsibility and opportunity early on. As a result, I learned quickly to trust my instincts, learn from my mistakes, and let my investment performance speak for itself. I believe diverse teams are integral to success. Additional perspectives help investment teams reduce their blindspots and recognize more market opportunities. Being a woman has given me a unique perspective, which has helped me throughout my career.
You had a recent key hire in September. Tell us about this.
Yes, we are excited to have brought on Crystal Valentine, Ph.D. as a Partner. She is an accomplished computer scientist and has also held C-level operator roles at venture-backed companies.
How have you been strategic about your hiring?
I am a firm believer that diversity of thought on our investment team is critical. As a small firm, every additional person can change the culture and direction. That is one reason we recruited Crystal – her expertise and background is different from that of the rest of our team and she has already prompted more vibrant and informed debates around potential investments. We will continue to build the firm around diversity of all kinds – gender, racial, socioeconomic, education, career, etc.
What advantages do you think you have that come from being based in Utah as opposed to the venture capital industry's "hub" in Silicon Valley?
We feel that being in Utah, specifically in Salt Lake City, gives Cross Creek an advantage as we avoid groupthink. One cannot be part of the crowd and, at the same time, outperform the crowd. It is essential to look for the gaps in expectations, and we feel it is easier to do this away from the venture “hubs.” Additionally, Utah is a burgeoning innovation center, home to tech communities known as “Silicon Slopes”, several world-class universities, and an exciting life sciences industry. In dollars invested, Utah is disproportionately important to the U.S. startup community, given the size of its overall state economy. Utah has just the right amount of entrepreneurial "buzz". Cross Creek needs to stay current while not letting the herd mentality sway our decision making.
One cannot be part of the crowd and, at the same time, outperform the crowd.
In dollars invested, Utah is disproportionately important to the US start up community, given the size of its overall economy, and has just the right amount of entrepreneurial "buzz".