Episode 3: How A Network Model Of Venture Capital Can Allow For More Inclusive Investing

Welcome back once more, listeners! Finishing out launch week of the Tech Forward podcast, I spoke with Lisa Cuesta, a Principal at NextGen Venture Partners. An early-stage venture capital firm, NextGen’s goal is to bring a service mentality to venture. NextGen is made up of a core group of seasoned VCs along with a network of hundreds of part-time Venture Partners that drive the growth of portfolio companies. Prior to her work with NextGen, Lisa worked in strategy and product roles at Google as well as the ecommerce team at Pepsico.

Our conversation focused on the barriers that female and minority founders face when fundraising, as well as different methods to make VC funding more widely accessible. Lisa had a lot of great insights to share about how to open the doors to more diverse groups of founders.

So how does NextGen differ from other venture funds? Typical venture funds usually meet companies and entrepreneurs through the general partners network. This means they’re exposed to a relatively small pool of potential clients: either those they have invested with previously, or friends of those they’ve invested with previously. Not only that, but general partners tend to be a small subset of people from similar industries, with similar backgrounds. As a result, there’s a degree of blindness to diversity of experiences and perspectives.

With the NextGen model, however, the investment committee process is open to venture partners. Their venture partner network features a wide diversity of backgrounds and perspectives, which gives NextGen a unique approach to investing.

One small example of NextGen’s advantage can be seen in their unique positioning to address the issue of geographic diversity in funding. Previously, Lisa worked on a project addressing how to get venture capital off the coasts. “Given the venture partner model, NextGen is very well suited to addressing this issue. They have eyes and ears on the ground all over the country and can meet entrepreneurs in very early stages. It’s really a great way to get exposure to markets beyond just the coasts.”

I’d like to thank all of my guests as well as my listeners for joining me for the Tech Forward launch week. From now on, I’ll be posting new episodes with new guests every Wednesday. As always, if you have ideas for potential guests, topics, and issues you’d like us to address on the show, let us know on Twitter. See you next week!