DIANE YOO
Founding General Partner of FilKor Capital
Founding Partner of Parliament Ventures Fund Capital
Co-founder of an accelerator in partnership with Rice University, Global She Ventures
Co-founder of a national media platform, Identity Unveiled
1.Why did you choose to become a venture capitalist?
As a woman entrepreneur, there are first-hand experiences that I have witnessed regarding biases and disparities in fundraising. My challenges ultimately created a passion to help others find titanic success as entrepreneurial women of color. This was why I was driven to launch FilKor Capital, the first pan-Asian American women-focused VC fund.
2.What was your vision after you had won beauty pageants? How did you transition to being a venture capitalist?
As an international titleholder, I viewed beauty pageants entirely differently: pageants were a competitive sport. Even at a young age, my entrepreneurial DNA kicked in. The fight to win and the grit to survive overwhelming setbacks and adversity ultimately created a thicker skin at a young age. Driven to be the best, I trained like a professional athlete for pageants. My inner drive came from previous experiences where I was the only Asian model walking the runway in a sea of women who didn’t look like me and had different beauty standards. However, I knew who I was: diligent, savvy, and a fast learner. I realized that you don’t need to be the most beautiful woman to win, but learn how to outsmart the game. These are the distinct glimpses I see in other women entrepreneurs that were title holders. They have a knack to survive, adapt quickly, and make decisive decisions with gut instinct. As a pageant titleholder, I had to work numerous events and win crowds over with charm and charisma, but more so, I mastered how to enter rooms and leave an impression.
3. According to you, a person should have enough personal wealth to be a venture capitalist, but there’s no perfect answer to this.
Not sure where this is quoted from. You don’t need significant wealth to be a venture capitalist. However, like any startup, you need to put skin in the game, as experienced investors will ask.
4. What is the time period a venture capitalist wants its money back from the company ?
Typically, venture capitalists will return capital anywhere from 5+ years. The typical investment fund life is 10 years.
5. What percentage of ownership goes to the founder?
This could vary, but typically I advise that the early-stage founder set aside sizable equity as they will continue to increase dilution per funding round. On the flip side, a founder should consider “smart money,” or what type of significant value does an investor bring? VCs that have outstanding track records have extensive networks that have proven to help startups or even help with raising capital. As an entrepreneur, is it essential to decipher a reasonable offer in lieu of covering tractions quickly.
6. What is your expected return as a venture capitalist—10 times, 50 times, or more?
While 5x is a decent return, 10 times the invested capital is generally expected as the industry average. This is also based on industry sectors, company stage, and so much more. Certain industries, such as technology, can achieve much higher returns. It’s also important to remember that venture capitalists have other internal metrics to meet, such as an internal rate of return or hurdle rate. Venture capital is a high-risk asset class. However, a seasoned fund manager could strategically maximize high returns.
7. Does a venture capitalist seek a board seat ?
Yes, typically a venture capitalist negotiates a board seat on the company’s board of directors. If the VC is the lead investor, the likelihood of serving on the board for corporate governance is much higher.
8. What are the characteristics you look for in an entrepreneur when they walk through the door?
Humility, coachability, experience as an entrepreneur, team. Other highlights include those that utilize creativity to think outside the box, forward thinking, and the ability to pivot with confidence based on experience.
9. What do you think about most entrepreneurs’ making mistakes during fundraising stages ?
- Negotiating the cap table for the founder and investors.
- Miscalculating or claiming an exaggerated assumption of valuation.
- Being uneducated and unprepared to speak to your investors.
10. According to you, what kind of entrepreneur makes the best founder ? What makes the best profile ? An MBA from Harvard or Stanford, his/her company’s marketplace value, he/she as an individual, energy/drive towards their passion, or personality ?
- The best entrepreneur is one who’s constantly seeking to learn, seeks advice, can pivot quickly, and knows when they are not the answer to everything.
- The best profiles are entrepreneurs with lead investors that are top-tier firms or top-tier accelerator graduates, or even better, extensive networks for building sales. Another indicator is whether the founders had successful exits from their previous startups.
11. What does the decision process look like that we are going to invest in this company?
VC firms are typically structured with reviewing hundreds or thousands of deals a year. With that in mind, a VC firm’s first point of contact is usually an analyst or associate. Analysts and associates will review decks and see if there is a thesis alignment before deciding to move forward with further development.
12. Would you still invest in a company when in conflict while working with other venture capitalists?
It’s best practice when a VC puts in a large check amount, that they do not co-invest with a competitor VC fund. Founders could have perceived confidentiality issues that could arise.
13. If there were five great companies coming to you and you could only choose one, which one would you choose ? What factors will influence your decision?
VC firms individually have a proprietary scorecard within their own firms. This helps vet out criteria for which deals to invest in based on their internal measures and investment thesis. Business plan, market opportunity, risk assessment, and more are typical influential factors when reviewing deals. The factors that influence decisions are the overall risks of early-stage startups. Primarily, startups send me uncharted business models or novel leadership teams with no track record or experience to operate within their domain expertise, all in the midst of volatile market conditions.
14. I would like to be a tad bit candid here. While understanding there’s due diligence when you invest in a company, how often do venture capitalists go to their social media to check the founder to see how they are as a person? On Instagram, Facebook, or another social media platform?
Pretty often – especially if the company’s target market is consumer focused. Due diligence is all written into an internal deal memo. Red flags are noted quickly and finagled out as VC’s review hundreds of deals.
15. Is it somewhat important to you to see that a founder has certain ethics & values that they should possess ? What are they ?
Venture Capitalist have an ethical standard on their legal agreements on what they will not invest(i.e. cannabis, nicotine, sex tech, gambling, etc). Some firms are associated with institutional investors or organizations, so there’s alot at hand. Transparency is key to building trust with LP’s.
16. A brief description of your ventures, which you’d like to mention in this interview
- International Titleholder to Fund Founding Partner
- Fenix is Asian American Investment Manager Network. I co-founded this to help other senior Asian American women VC/PE executives rise to power seats, help shatter barriers, and provide more access to capital connections.
17. Rapid-Fire :
Who would you pick and why?
- A founder who goes by a set of business preset rules but has potential and plays by all legal rules.
- A founder who does not go by a set of business preset rules but has potential and plays by all legal rules. – Yes.
What would you preferably choose and why?
- A founder with a higher IQ
- A founder with a higher EQ – Yes.
What is more important to you as a venture capitalist?
- A company with a purpose but not much value return because it is aimed at a small market value.
- A company that does commercially well in the mass consumer market ? – Yes
Self-Awareness / Values & Belief system (Personal & Professional)
1.You’ve spoken about being lonely on top. How lonely is it ? When do you feel lonely ?
Ultimate women trailblazing paths, carving out paths where there was no one else gone before them, is a definitely lonely road. Our podcast covers countless stories of high-performing women. Lonely, on the flip side, may be suited perfectly for those that thrive as an introvert – those that cherish quiet times to rejuvenate.
2.What about you as a person keeps you going ? (What motivates or drives you?)
Creating impact for women to rise to power seats
3.How do you define success and failure ? What is your perspective ?
I would love to see more women in VC. The more women we have in powerful decision making roles, the more women’s future of innovation will be impacted.
4.What matters to you the most overall in life & why ?
Illuminating a path for more women and the undeserved.
5.Do you think luck plays a greater role in one’s life?
Hard work and timing. No coincidences in life. There is a reason why some dreams continue to manifest. Maybe there’s a reason why a certain person continues to show up in your life, even if randomly. The same goes for identifying mistakes, be sure to catch the repetition so you don’t make the mistake again.
6.What is your proudest moment in all that you have accomplished?
IPO deals. My firm,PVF, launched the first program with a Korean government agency for firms interested in going IPO in US markets, the largest exchange globally. The NYSE is ranked #1 at $37 trillion and NASDAQ is ranked #2 at $25 trillion. It was an honor to work with leading tech market leaders of Korea. Korea’s e-commerce company, Coupang, was the largest US-listed IPO since Alibaba, raising US $4.55 Billion.
7.I am soon going to start with marketing for my other tech SAAS venture, ECLECTICARDS — Create bio link website. What would you advise me as a venture capitalist ?
What should my focus be on? If I ever come to you, will I get funded ? What are the chances? I am not looking for one, however I’d like to prepare before I go to Venture Capitalist. (Steps to prepare for a startup before showing up to a Venture Capitalist door.)
How passionate are you about your job? How large is the market? Have you studied your target market? What are your barriers to entry? Have you researched your competitors? What’s the market opportunity?
You will not get funded just because you think you know a venture capitalist. Venture capitalists have a fiduciary duty to our limited partners and investors. We are trusted to manage an investor’s financial assets and provide sizable returns. Are you confident that your startup will survive the due diligence and pushback from numerous potential investors? Most of our deals come from a trusted source from co-investor networks and VC colleagues that have highly vetted due diligence operations.
About Ms. Diane Yoo
Ms. Diane Yoo is an entrepreneur and venture capitalist with over 15+ years of experience. She has founded multiple companies, including a VC fund that focuses on investing in early-stage female and diverse pan-Asian American founders, ‘FilKor Capital’. She has invested in over 35 businesses as an accredited investor with an emphasis on diverse founders. She is in the 1% of Asian-American female founders who are also a partner. Diane has founded angel networks, venture funds, and investment networks. She is the founding partner for a med-tech and health-tech venture capital firm in partnership with the largest medical centre in the world. With VC and accelerator expertise, she works extensively with over 700+ global companies. Founded at Rice University, the global women’s entrepreneurial accelerator ‘Global She Ventures’ is co-founded by Diane. Diane is also a co-founder of ‘Identity Unveiled’, a national media outlet that honours Asian American women trailblazers who have defied stereotypes to become industry pioneers. Diane is the founding partner of ‘Parliament Ventures Fund Capital’ and serves as an investment partner to several Silicon Valley funds, including the largest women’s fund and the first fem-tech fund in the nation.
