Rhonda Wallen On Raising Capital, Making an Impact and Moving Forward

I’m so thrilled to have the chance to share this conversation with my dear friend Rhonda Wallen because, as always, she is direct and razor sharp in her insights. Rhonda and I both worked together in Business Development at Guidant Corporation in the late 90s. She went on to join a VC firm and then took the reins at a startup as CEO. She currently consults with early stage startups in life sciences. Recently, we spent a few days together and had some time to talk about our entrepreneurial experiences, raising capital, being moms and more.

LZ: Was becoming an entrepreneur something you aspired to or did it happen more organically?

RW: I never had the specific goal of being an entrepreneur but I knew I wanted to be a key driver of a company.

LZ: So you always had an eye on the C-suite?

RW: Yes, but I also fell into it because there weren’t that many opportunities at the big, established companies I’d worked for. So when I saw an opportunity to play a key role to bring a new product to market in life science — which is my passion– I took it. I didn’t roll out of bed wanting to run a company but I wanted to make an impact.

Ultimately if you feel you want to play that role and it’s not available, you have to create that opportunity.

“I’m frustrated more often than not. I’m a woman, younger and a minority. They look at me as if perhaps I’m from another planet and think, “Who is this and what do we do with her?””

LZ: We worked together at Guidant. I know one of the key reasons I left is because I didn’t see a path to a senior role. Here I was, deeply wanting to work a zillion hours a week (this was before kids) and take responsibility for things and I felt like no one would even give me a chance. Did you feel that as well?

RW: Not in that way. More that working there showed me that it was hard to have an impact working in the confines of a large organization because there was a cast of thousands required to do something that small companies do with 6 people.

I think there’s a personality type where you want to drive something and when entrepreneurs have the big company experience it occurs to them that they could have gotten the thing to market in a fraction of the time.

Also, there’s only so much room for those kinds of roles in corporations of that size. You can’t really drive initiatives at the middle management level and there are only so many slots for senior management.

LZ: I also think GenX (our generation) feels that particularly acutely because we were coming up right behind the boomers who got into senior management in their early 40s and weren’t going anywhere for 20 years. So going out on our own was really one of the only ways to move up at that time.

Tell me about how you think about leadership.

RW: My style is to trust in the ability of the people who are on my team. I like to be very clear about who we are, where we are trying to go and how we’re going to get there and let everyone loose to deliver on their part

I always feel like time is short and time is money and resources are constrained. Entrepreneurs think about cash consumption all the time. Time is passing and we need to show something good has happened and that we are moving forward. If things go well, then celebrate. If not, then we figure out what we need to do differently. Some things aren’t in your control. Some things are. As a leader, I can challenge the assumptions that the team has and see if we can move forward faster or if a different route would be more productive.

I think that being direct is important. I probably need to cultivate more of that shoot the breeze, play a round of golf, hang out and have a beer attitude. But direct is my personality type. It rubs some people the wrong way. I am coached, reminded, suggested to all the time to spend more time on the softer side of management. I don’t think this would be true if I had a penis.

LZ: You & I have both gotten this type of feedback over the course of our careers. I remember talking about this when we were both in our 20s. It’s a recurring theme for women in leadership roles.

RW: It’s not changing. I’ve had that feedback recently –from a company where I got two investment term sheets after just 3 (intense) months of finding, pitching to and following-up with potential investors. A few people thought I was too aggressive. It almost trumps your effectiveness. I’ve never heard of a man getting that feedback.

“I don’t have the luxury of just being myself.”

LZ: Ah yes. The “congratulations and fantastic job, but next time could you be a little nicer” feedback.

RW: I think about it all the time. I hate to be cynical but the reality is, I do it – constantly check myself [back off] because at the moment I’m not the boss and I can be fired. And people are fired for not having the right “fit” – not having personalities that fit with people’s (often biased) expectations – all the time. As a consultant or even as a member of a management team where I’m not the CEO, I don’t have the luxury of just being myself.

LZ:I think that’s a great way to put it. It really underscores what I think is the reality for a lot of women – they feel that they can’t “be themselves” in their work life. I know I’ve been there.

New topic. Do you have a role model? Someone who maybe gave you the idea that you could go out there and be successful as an entrepreneur or woman leader?

RW: I’m not the kind of person that looks externally that much. I can’t point to a specific person or event that made me aspire to entrepreneurship. I’m just wired to want to drive forward and make an impact. I’ve never been someone to say, “look what they did, I want to do that.” I mostly challenge myself.

LZ: You and I have another shared experience in that we’ve both had the “pleasure” of raising venture capital. Do you want to talk about that?

RW: I’m frustrated more often than not. I’m a woman, younger and a minority. They look at me as if perhaps I’m from another planet and think, “Who is this and what do we do with her?” And if they don’t invest, I never really know if it’s my demographic (aka “fit”) or they just don’t like the opportunity.

But looking at my experience telling my story to a room full of white men, I wish in an ideal world people could get past what you look like. That undercurrent is always there. It’s subtle. It’s never overt. No one has ever told me that I’m not a good fit to my face, at least not in the context of having my deal declined Some say this isn’t our area for X and Y reasons, and that is fine. Often however, I simply get that my deal is just “not a good fit.” So what can you do with that?

“The most essential thing is that women need to raise more conscious sons.”

LZ: Right! Because if you knew it was the opportunity that was the problem, you could pivot or rework the plan or try to educate them more or whatever. But if it’s demographics, then you’re just wasting your time.

RW: I’ve been successful. So clearly sometimes they get past it. I made 137 calls and got two term sheets. So at least 2 funds weren’t scared off by my genitalia.

LZ: When I was raising money in the early 2000s, I was so naïve I didn’t even know being a woman was a problem. Nobody talked about it. There weren’t even public stats in those days. It’s not like I knew any other women CEOs. And no VC was ever going to take me aside and say, “you know, we’ve never funded a company led by a woman.” So how was I supposed to know? At least now people are talking about it out in the open.

RW: It’s getting better with men who are younger than we are. Men our age and older can’t escape their world view, and that really influences their decision making re: women in the C-suite. Similar to the case for minorities, the women they do consider can’t be regular rock stars they have to be SUPERrock stars. For men – their rockstarness is assumed. The younger guys just aren’t as hung up on it and don’t automatically assume that a woman ISN’T a rockstar.

LZ: So now, as women who are at the peak of our careers, we have to deal not only with sexism but with ageism as well? I feel like that’s definitely the case in tech. There’s this idea that if you’re over 40 somehow your experience isn’t valuable.

RW: I haven’t seen it as much because outside of tech, experience still counts. Silicon Valley is a bit of an anomaly. There is an echo chamber here where there are some driving ideas and ways of being and everyone falls in line. You fund the young guy in the hoodie because they seem cool and relatable – the investor sees themselves in that guy. And/or, you fund the a-hole because the current unicorns are run by a-holes.

Outside of the valley, there’s now enough history that investors have confidence in their own decision making and don’t feel the need to emulate each and every trend and pervading fashion coming out of the valley. When women need to raise money I don’t suggest they come to Sand Hill Road.

LZ: So how do we change things? How do we get more funding and more leadership roles for women?

RW: The most essential thing is that women need to raise more conscious sons; if you see them being an asshole [wrt women], call them on it. Be an active parent and show them to value women as whole people. Value their intellect. And it doesn’t stop when they go to college. Talk to them about their businesses and what they are doing. Ask – “Why aren’t there women in your business?” And if your son is in a position of power – mothers, sisters, aunts — challenge them as to why they don’t’ have more women involved. So yeah, this is not realistic or quick, but key.

I think we also have to train women who have money or influence over money to be investors. Because there’s about to be an enormous transfer of wealth from the boomers and there are going to be women who come into a lot of money. And they can be game changers if they choose to use some of that money to invest in other women or start something themselves.

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