E005: Claire Chang: Ignite XL Ventures

Barbara Bickham [00:00:00]:
Welcome to the Female VC Lab Podcast. My name is Barbara Bickham, and I would love for you to introduce yourself in one line. Give me your name, your title, and the name of your fund.

Claire Chang [00:00:13]:
Sure. Thanks for having me. My name is Claire Chang, founding partner at IgniteXL Ventures.

Barbara Bickham [00:00:19]:
Wonderful. Thank you, Claire. So what inspired you to become a venture capitalist or, an investor?

Claire Chang [00:00:29]:
I think there are 2 things that I can talk about. 1, is the fact that I am passionate in helping others. And I believe that comes from the fact that I myself have been a beneficiary of being helped by many others. I'm an immigrant, child. I came here with my family when I was 12 years old. None of my family members spoke a word of English. And so you can imagine from settling in to going to school, learning our ways through, we had to rely on helps from many, others. So that's one.

Claire Chang [00:01:05]:
Having been a single mom with 2 children working full time Oh. It all had That's another one. And I absolutely relying on family and friends to fill in, taking care of the kids, Right. Being filling in that father's role, and just being mentored. It takes a village to raise a child and might think working full time as a single mom, there's no way you could do this by yourself.

Barbara Bickham [00:01:28]:
Absolutely.

Claire Chang [00:01:30]:
Having experienced that, the beauty of getting help, has made me wanna help others just as in return. So that's one. And, of course, if you've and all of us have have experience helping others, and the feeling that you get, the rewarding feeling that you get when you know that you have made an impact or difference, in others, I think that is what keeps you wanting to, be that helping hand when there's a call for it. Second thing I would say is the fact that I love working with passionate startup founders. The energy and the passion that they exude is really contagious and addictive.

Barbara Bickham [00:02:16]:
You know what? I'm glad you said that because it is very addictive. It can be addictive. That's a good word for it.

Claire Chang [00:02:22]:
It is. Right? Many in the media, we see all these shining lights on these unicorn startup founders, but many of the founders, we struggle. The founders struggle. The the failure rate is very high, north of 95%. 90 90 some percent? 90. Right? It's not a it's a very tough and sometimes lonely journey. Yes. And I think I read most recently that start up founders are 2 times more likely to, suffer from depression.

Claire Chang [00:02:56]:
Wow. Twice more likely to suffer from suicidal thoughts. Three times more having substance abuse. And get this, 10 times more, likely to, be suffering from bipolar disorder. I was like, damn.

Barbara Bickham [00:03:14]:
Wow. That's so interesting.

Claire Chang [00:03:16]:
That's extreme. But at the same time, I think you can also see that because I when you're a founder, you have to constantly put on the space of being confident and and and at the same time, you're going through internal battle of self doubts and all these struggles that you're going through, but you can't show that upfront. I can see that, yeah, that bipolar

Barbara Bickham [00:03:38]:
The pressure. Now there's a constant pressure there as a founder, you know. Right. Right. There's a constant pressure and that can lead to many of those issues you discussed. So thank you for bringing that out, Claire.

Claire Chang [00:03:52]:
And and yet, you have these founders that are just, you know, absolutely passionate in working on the the solutions products because they believe that they're solving a problem And then we'll be better placed with this solution. I know myself having gone through a personal experience of being in a start up where I was one of the the 6 team members, 5 engineers, 1 female. We were literally sleeping, eating, working in, you know, one office. Really just excited at what we were working on. We we really truly believed that this was going to change the world. You know, that whole the HBO Silicon Valley. Right. It's very true.

Claire Chang [00:04:33]:
You you operate with this notion that you are doing something so important. You're so zeroed in what you're working on. It's that passion. And then, also, I think I started a global accelerator back in 2014. I was helping entrepreneurs in Korea to expand to the US markets. I worked with over 200 founders where I got to experience these amazing resilient founders. They had language barrier, cultural barrier. They weren't sleeping just because they needed to get ahead, to compete with the local founders here.

Claire Chang [00:05:06]:
And none of that none of those challenges stopped them from what they wanted to do. And having worked with them over and over again, understanding the the kind of challenges that they face, but they were relentless, in their pursuit of getting the products, and solutions to the market. And it was through that experience, the understanding the need for capital. As an accelerator, we were connecting them to their customers, partners, mentors, investors. But at the core, you needed the capital. The capital. Key resources that these founders needed. So, back in 2019, I decided, okay, I love working with founders, but I can't in order to be relevant, in order to be sustainable, I need to create a fund.

Claire Chang [00:05:52]:
I need to go raise money so that I can continue to do what I love, which is to support founders. And so rather than, oh, I wanna become a VC, it was more of I need to create a fund to be to infuse capital into

Barbara Bickham [00:06:05]:
these enterprises. To move those passions of those startups and those founders forward. That's great. That's great. Thanks so much for that, Claire. So tell me a little bit about your investment thesis and the motivation behind your investment thesis.

Claire Chang [00:06:19]:
Sure. So our investment, we're very excited about this future of beauty and wellness. Our investment business, we're a global seed fund investing in the, igniting the kick ass entrepreneurs. We we we say that unapologetically. Kick ass entrepreneurs at the intersection point of technology, beauty, and wellness. And we are targeting pre seed and seed seed companies. We are global. We are US we are we are based in the US, but our belief is that beauty and wellness is global.

Claire Chang [00:06:54]:
And that the innovation can come from really anywhere. And so we have made investments in Brazil, UK, of course, US, as well as Asia. And we also have strong ties, in Asia, especially Korea, Japan, China, where we have connections to manufacturers, to distribution partners, to customer insights where we add value to the founders that we back.

Barbara Bickham [00:07:21]:
That's great.

Claire Chang [00:07:21]:
That's our investment, thesis. Why are we so excited about this industry? Yeah. We really start with the premise that the beauty, is not just skin deep, but that it is it's much more holistic, that it's inside out, that it includes mind, body, soul. Mhmm. We're really looking at this through the lens of health and beauty. And when you look at and and when you look at these 3, things, 1, on the consumer base, we have Gen z's that are really redefining the definition of beauty. Again, it's it's not just, again, covering up, but it's really being authentic, self confident. And that's really inside out.

Claire Chang [00:08:11]:
Your health, well-being is really at the core. They're also beauty means conscious. Right? They demand the the the the clean ingredients, cruelty free. They want sustainability, which this demand is really changing what kind of products are being produced.

Barbara Bickham [00:08:32]:
Absolutely. 100%. Absolutely.

Claire Chang [00:08:36]:
And they also demand the authenticity That you can't just say one thing, clean, beauty products, but then go on and do something that's completely opposite of what you say you do. You have to be authentic inside out. And also the fact that we have information everywhere, that consumers are checking, they have access to all their information now. And so you can't be you can't be lying. I think the transparency is really at the core.

Barbara Bickham [00:09:05]:
And then That's a that's a good point, Claire, as far as the transparency, because you're right. You can go and Google all these different ingredients and see, is this really healthy? Is this good for me? How would this apply to me as an individual? Can it create problems? So that transparency piece is very important, which goes along with the authenticity as well in combination.

Claire Chang [00:09:26]:
Exactly. And really, and technology really is at the core. I'll talk about the technology as the the second piece. But again, adding to this consumer demand, there's also the speed to market. Right? Speed. Mhmm. So consumers are constantly engaging with these, brands, companies, founders, constantly, communicating what they what they wanna see. And brands are listening.

Claire Chang [00:09:51]:
Right? They have all these tools that they have a feedback loop to, tools in place to engage with consumer base, understanding what their needs are, constantly iterating, and getting the products to market. Whereas I think in the past, specifically in the beauty space, it would take anywhere from 24 to 36 months and that's considered pretty fast to get the product out to market. Now, we're talking about anywhere from 4 weeks to as quick as 4 weeks all the way to 6 months.

Barbara Bickham [00:10:21]:
So we've we're seeing a

Claire Chang [00:10:23]:
shortage of time how the products are delivered to the market. From the, conception to actually being out in the market. So that's That's

Barbara Bickham [00:10:32]:
a big that's a big evolution. Very

Claire Chang [00:10:35]:
really big. And I think that that's a whole different topic in terms of how is that, you know, possible Right. Manufacturing base and then the the consumer communication and brands that can really move fast. And I think that's where that beauty of all these up and coming company startup founders that are really able to act quickly. Again, this is

Barbara Bickham [00:10:54]:
I think I think you're gonna add in the technology piece as well, which I think can help inform not only from the data, but also from the deploying of the product from concept to to shelf. Because before it would take a long time and a lot of chemists and all and I there wasn't as much technology to help inform those, the creation of those products as well.

Claire Chang [00:11:16]:
Exactly. I think technology is really at the core of this change, transformation in that consumers, of course, how they're communicating their needs and demands to the brands and brands having this technology capability to listen to all these tools that even what you had talked about with podcasts, you know, all these technology tools that's

Barbara Bickham [00:11:35]:
Yes.

Claire Chang [00:11:35]:
That enable me to do this. But also in terms of augmented reality, augmented reality, like these are tools where you can actually see

Barbara Bickham [00:11:44]:
Those are huge.

Claire Chang [00:11:44]:
Before you buy. Ton of data that we're collecting now that enables these brands to really understand customer behavior.

Barbara Bickham [00:11:52]:
Yep.

Claire Chang [00:11:53]:
And then on the manufacturing side, like you said, before, people are still having to travel to, you know, go to the the manufacturer

Barbara Bickham [00:12:01]:
Of course.

Claire Chang [00:12:01]:
See the product, but much of that process can be automated leveraging technology. So I think that's really at the core of this transformation, and that's where we also are very excited about how the beauty, the wellness category will products and services and experiences will be, reimagined, I think, leveraging technology. I like that reimagined. And then the third thing why we're so excited is the fact that when you look at this consumer, the personal care market, 80% of the product purchase decisions are made by female.

Barbara Bickham [00:12:37]:
Absolutely.

Claire Chang [00:12:38]:
Yet when you look at the investment, landscape, over 90% of the investors who are writing checks are male.

Barbara Bickham [00:12:49]:
Correct.

Claire Chang [00:12:50]:
And so many times.

Barbara Bickham [00:12:51]:
There's a lot of disconnecting there. It's a big disconnect.

Claire Chang [00:12:56]:
And so we have so many comments from our female investors female, founders where if I hear one more word about it, I'm gonna have to call my wife and ask to all these crazy incidences where they're trying to explain the value of the the

Barbara Bickham [00:13:16]:
the Product and how it's useful and how it's different than x y z's products. Yeah. That's tough.

Claire Chang [00:13:21]:
Trying to explain that value proposition to investors who really have no idea because they're not the they're not the the buyers. They're not the the consumers that consume. Or they do, but then they're not the buying decision they'd only value. So they don't Right. Right. Have that intimate understanding of the problem and the solutions as females. Correct. As a all female led team here at Silicon Valley, we're we're the first Silicon Valley based female led team to really tackle this beauty and wellness, space now for investors.

Barbara Bickham [00:13:51]:
Wow. That's that's really great because that what you said was so critical. Having that understanding and the understanding from an investor perspective, like, that's the difference between getting the funding and not getting the funding potentially, only because of understanding. And that's good you're, like, bridging the gap of that. I think that's really cool.

Claire Chang [00:14:15]:
That's what excites us about what we do.

Barbara Bickham [00:14:18]:
Wonderful. Claire, what are you currently learning or listening to or reading these days?

Claire Chang [00:14:27]:
When I'm not talking to founders and when I'm not fundraising, you know, like

Barbara Bickham [00:14:31]:
When you're not doing that stuff?

Claire Chang [00:14:33]:
There's so much to learn. There's so much, and I don't come from this investment, background. And more so that I feel I need to learn as fast as I can. I think the biggest misperception out there about investors, especially when you're going from an angel investor to actually running a fund, is that running a fund is like running a company. There's so much operations. 100%. And I think that's something that is not often talked about because I think on the facade, you just think about, oh, you just select the companies that you are excited about and you invest. More to it than that.

Claire Chang [00:15:10]:
So much more to it than that.

Barbara Bickham [00:15:12]:
Wish it was that simple.

Claire Chang [00:15:14]:
I know. I know. With that, obviously, I am just trying to learn as much as I can from experienced seasoned investors. The best practice is obviously not just from investing, but fundraising to operations, all of it, really. And so listen to all the VC related podcasts you can imagine, and LVC and lab is is one another one that I'm gonna add to my,

Barbara Bickham [00:15:39]:
please add that, we have all different kinds of female VCs on it.

Claire Chang [00:15:44]:
Yeah. Including That's for sure. And then, of course, I listen to the usual, the BC 20 by Harry Stebbins.

Barbara Bickham [00:15:49]:
Yeah. Harry Stebbins. Yep.

Claire Chang [00:15:51]:
Yep. Yeah. It's great.

Barbara Bickham [00:15:52]:
Arlen has a good Arlen, Hamilton has a good podcast as well.

Claire Chang [00:15:55]:
Not a good show. Okay.

Barbara Bickham [00:15:56]:
She has a very good podcast as well. And then, of course, Jason Kocanis has a very good podcast as well. Sure. Well, good. Angel Investing and Investing.

Claire Chang [00:16:04]:
Right. Right. Now He's

Barbara Bickham [00:16:05]:
got a good one as well as well.

Claire Chang [00:16:06]:
I got The Full Ratchet by Nick Moran as well.

Barbara Bickham [00:16:09]:
The Full Ratchet, that one's good as well.

Claire Chang [00:16:10]:
That's awesome. Good. Venture Stories, I think Village Capital also puts out a good one. Mhmm. Mhmm. And then, of course, just in terms of startups related, May 16 and NFX, those are some of the ones that I know the list of. Yeah.

Barbara Bickham [00:16:22]:
Those are good. Yeah.

Claire Chang [00:16:24]:
And then I would say, I think being an how do I be a how do I be a a better investor? I think a lot of what what entails as a good investor is being able to really support the founders. Because, ultimately, our success as a start ups, the founders have to be successful in order for us to be successful.

Barbara Bickham [00:16:45]:
Yes. Absolutely.

Claire Chang [00:16:47]:
How do we help these founders? And I think the the podcast and the readings that I've done, you gotta be able to ask the right questions. And so, a lot of it, I think but also being able to tune in to understand the state of the founder as well, not just from a business perspective, but also at their personal level. Are they actually personally, like, okay? Are they doing okay? And being able to gauge these details requires, I think, training. And it's almost I feel like it's investors also have to learn to be life coaches, business coaches and life coaches.

Barbara Bickham [00:17:24]:
I I agree at some level because we're creating these long term relationships. They're longer term. 5 years, 7 years, 10 years, could be 15 years. So you you have to ask yourself a question on both sides, the founder has to ask, and we have to ask as venture capitalists and investors. Can we help these people long term? And then, like you said, people are whole entire people. They're not just one piece. Your work is one piece of many pieces and aspects of deal. So checking in on them and making sure you have the compassion, the empathy, see how they're doing, see where they're at, see where their head is at.

Barbara Bickham [00:18:03]:
If you happen to see something's happening, when do you come in? When do you have them speak with you? When do you have them speak with other people? Create and then you're creating your ecosystem. Maybe you have some mentors that that do these things. So it's important to look at it as a holistic thing and not just, hey, I'm just giving you this money.

Claire Chang [00:18:21]:
No. It's so important. I recently had an experience where I was speaking with the founder. And you as an investor, you're always, being a cheerleader, encouraging them, really also pushing them as well. And I had a debriefing session with this, founder, and she alerted me because I had, how did I do, you know, in my enthusiasm, did I just push too much? And she did, talked talked about how loved enthusiasm, but at the same time, she was just completely burned out. She was burned out that she wasn't in the state of mind to be able to take on all the things that I was recommending. It's a big moment for me to say, ah, yes, you wanna be you wanna be encouraging, you wanna be pushing, but also, I need to be a better listener to understand that particular founder was burnt out, and I need to listen and be able to recognize that, and to be able to tell her that it's okay. It's okay to pause and take a break.

Barbara Bickham [00:19:23]:
Correct. And that's a part of the relationship building that we do, and it's also a part of the trust and things we create with these founders, that they can have that authenticity and transparency with us and creating that safe space to go, okay, you can say this in here, be honest about your feelings. We're sorry, and we'll deal with this in another time. Because like you said, maybe they need the break. Okay. We can deal with this in another time, or maybe they can only do 1 or 2 things. You know, okay, great. We knock these 2 things.

Barbara Bickham [00:19:50]:
Another time. Or maybe they can only do 1 or 2 things. You know, okay. Great. We'd knock these

Claire Chang [00:19:54]:
2 out and then we'll come back with these other x, you know, x

Barbara Bickham [00:19:54]:
number later. Some of it's listening. Some of it's, like, making sure that we're open to it. And then some of it too is, like, allowing them to give us feedback as well.

Claire Chang [00:20:09]:
Yeah. No. I think that it's it actually I had to reach out and say, hey. I wanna have a a chat with you. I wanna ask you, how did I do? And that's how the the alertness came in, and you're absolutely right. Being able to ask the founder, how am I doing, is also important. Right? Because it's not just one way. It should be always It

Barbara Bickham [00:20:27]:
can't it can't be one way. It's not one way because it's not one way.

Claire Chang [00:20:30]:
No. It's not. It doesn't work that way.

Barbara Bickham [00:20:32]:
That's not how relationships work. No.

Claire Chang [00:20:34]:
No. And, yeah, often they think that it's investor and founder relationship is one way, and it can be absolutely both ways.

Barbara Bickham [00:20:41]:
No. It won't work if it's one way. So, Claire, this is great. So here's your bonus question. If in a in a year or 2 from now, we're sitting down and we're looking back, how do you see venture or investing or fund creation evolving in, like, the next year or 2?

Claire Chang [00:21:04]:
You know, I am very optimistic. I had mentioned how the investment landscape, investor landscape right now being predominantly male

Barbara Bickham [00:21:15]:
Mhmm.

Claire Chang [00:21:15]:
With with what you're doing, really highlighting female VCs. With an organization like All Race.

Barbara Bickham [00:21:23]:
Yes. I'm familiar with them as well.

Claire Chang [00:21:25]:
We have women in VC. We have number of these organizations that are really trying to promote and bring together these female investors. There are many works and funding, in the works now that I think in, in 1 to 2 years, we'll definitely see the numbers That's great. Moving towards more positive number, more increase in female GPs that can write checks to support more diverse founders. I believe I'm I I am very hopeful with all the activities that's going on with Black Lives Matter. I think really highlighting, really giving us also it gave me time to reflect and think about, okay, what sourcing channels do I have working with black founders? How many do I have, like, actually quantifying that the sourcing channels? Reaching out to my connections to say, hey, how do we create this channel where we're in regular talks, that we're regularly reviewing and meeting with founders? With all of these things, I'm hopeful that in 2 years, we'll the landscape will change.

Barbara Bickham [00:22:34]:
I I believe that as well. I think it'll take it's gonna take time. It took time for it to get this way, so it'll take time to to change it. But I don't know. Maybe it always seems like it takes a long time, and then, like, 5 years from now, we're looking. We're like, wow. Look at what happened.

Claire Chang [00:22:49]:
I feel like we're I'm

Barbara Bickham [00:22:50]:
hopeful as well. Point.

Claire Chang [00:22:51]:
Yeah. I feel like we're at that inflection point and that we will see that change going going towards the right direction.

Barbara Bickham [00:22:58]:
Awesome. Thanks so much for that, Claire. So how do people get in contact with you, Claire?

Claire Chang [00:23:03]:
My email is just on our website. Every so it's easy. Just claire@ignitexl.vc. Wonderful. Email, LinkedIn, Twitter, and all of those, channels work. Wonderful. To talk to you.

Barbara Bickham [00:23:20]:
So thanks so much, Claire, for coming on to the podcast. Claire from IgniteXL VC. And thank you for being our guest on the Female VC Lab podcast.

Claire Chang [00:23:32]:
Thanks so much. Congratulations on launching this podcast.

Barbara Bickham [00:23:36]:
Thank you so much.

Claire Chang [00:23:37]:
Thanks for having me.