Monique Woodard’s Paradox

How the founder of Cake Ventures invests to create progress

Welcome to Free Radicals — a collaboration between Everything and Sherrell Dorsey, founder of The Plug. Free Radicals is a limited series celebrating those who embody leadership in this moment. Each edition features a conversation between Sherrell and a leader in tech, focusing on equity, advancement, and progress. This is the first edition, featuring Monique Woodard. Enjoy.

Monique Woodard describes her life as a Black venture capitalist as a paradox of extreme visibility and extreme invisibility. 

On the one hand, she is a living example of the future seemingly everyone wants to create: a Black woman with the power to allocate capital. She is here, but people like her aren’t equitably distributed yet. This invites attention.

But, on the other hand, despite all the talk of diversity and inclusion, Silicon Valley undeniably still lives by certain patterns of exclusion. Woodard has worked in tech for almost two decades, and she’s still almost always the only Black woman in the room.

This type of shift in demographic patterns — and the invisible problems they create — are Woodard’s obsession. She founded Cake Ventures to explore what it means to build for the future.

Cake Ventures invests in founders serving three overlooked, but gigantic audiences: seniors, women, and people of color. The fact that tech is largely ignoring these markets means that there’s a big opportunity to build the next generation of large businesses right under the noses of incumbents.

The idea that these are minority markets, Woodard says, is old thinking. “If you're building a global company, the world is already majority-minority, right?” she says. “It's already a majority of Asian, Latinx, and Black internet users. And so how should you be thinking about your business as the internet user base changes?”

She got her start as a founder and now is an investor, and that path has given her a broad perspective, what she calls “the full aperture.” She’s not content to simply look for talent in the small backyard of the Bay Area: she keeps her eyes open in Los Angeles, Atlanta, and other markets in the US and around the world where VCs rarely visit.

For Woodard, innovating for these emerging, and in many cases well established and unserved markets, is a clear business strategy. Her own experience has taught her that without Black and Latinx investors in positions to sign checks and offer young companies guidance, founders who are outside the white, male Silicon Valley bubble often get stuck at the top of the funding funnel. Her enthusiasm for innovation, and for bringing new products to markets hungry for them infuses that investment philosophy. “Everybody should be building, and everyone should have the same level of opportunity and access,” she told Free Radicals. 

She sat down with Sherrell Dorsey, data journalist, founder of The Plug, and newly minted partner of Free Radicals to discuss how to build for the world we have and more including: 

  • The big demographic shifts that she believes will define the next decade of company building
  • Why traditional VCs often aren’t good at building inclusive and diverse cultures (HINT: they generally don’t have them internally either)
  • The signs of progress she’s seeing in tech’s diversification — but the long road ahead
  • Why she’s investing more in founders outside of traditional tech hotspots like San Francisco
  • What her experience has been like being a Black woman in venture

Monique, can you introduce yourself for anyone meeting you for the first time?

I'm Monique Woodard, I'm an early stage investor. I started my career in tech as a start-up founder, and I also started Black Founders, which is a community. I started angel investing and then moved onto the venture capital side of the table as a VC at 500 Startups and scout at Lightspeed Venture Partners. Most recently, I moved into the fund manager role by starting my own fund called Cake Ventures.

Talk to me about Cake Ventures—and tell me about the name.

What I've seen throughout my investing career is that there are these massive demographic shifts that are happening. A lot of investors aren't paying deep attention, they're only paying attention to the technological shifts. But there are just as many demographic shifts that are happening, and they're equally as important, if not, in some cases, more important than the tech shifts. 

Cake Ventures is about the three layers of big demographic changes that I see happening right now. The first is the baby boomers, 10,000 of them are turning 65 every single day and this massive aging market was previously what I would consider under-innovated. Now there’s a new crop of really innovative startups using technology to positively impact the lives of people as they age. So that's the first layer of the cake. 

The second layer is companies that can get to billion dollar outcomes based on the economic activity of women. You've seen it happen in companies like Glossier, Rent the Runway, The Real Real. But now you're going to start to see it happen beyond e-commerce, in categories like fintech with a company called Ellevest, or in the healthcare space, with companies like modern Modern Fertility,  or even the future of work with a company like Chief. I think those are all companies that are on track to be potential billion dollar outcomes and almost exclusively based on the economic power of women. 

The third layer of the cake is companies that touch what I'm calling the New Majority. So the US is on the cusp of becoming a majority-minority nation. A lot of our biggest and most economically influential states are already majority-minority, California and Texas in particular. 

I was an early investor in Blavity, which is a media platform for Black millennials. I invested in Silvernest, which is basically Airbnb for seniors. I was an early investor in Mented Cosmetics, a beauty brand for women of color, and also a company called Encantos, which is an entertainment and education platform that helps kids learn bilingual and multicultural skills . So I think there are a lot of opportunities across many different categories targeting the ways that these groups save money and spend money differently, their online user behavior and the platforms that they generally use especially around social, and helping decrease the cost and maintain the quality of healthcare.

So that’s what Cake Ventures is all about. 

I want to talk a little bit more with you about the idea of who gets to be a VC and how investors can help companies build inclusive cultures. I think that often we use the excuse that early on in a startup it’s not so much about company culture, it’s more trying to stay alive. 

One of the biggest failure points for otherwise successful companies will continue to be these areas around inclusion. So if you're not figuring that out early, I think that's a huge potential risk for your company and for investors who invest in your company. As an investor, I want to be the person on their cap table or on their board who is really helping them think through some of the potential pitfalls of not focusing on inclusion. 

What I mean is everything from a company not hiring inclusively, and then having a very homogenous, employee base, to issues of sexual harassment, issues of racial discrimination, issues of wage and pay gaps and disparity. Those are all things that we've seen in the news, and we've seen in the media that have tanked a lot of companies. We have to start paying a lot closer attention to those issues earlier. And I think investors can take a real activist approach to helping companies navigate some of those areas.

You talk about this activist approach, but I'll be honest: as much as I see some VCs talking about inclusion or standing up for women or underrepresented folks, I'm curious about how that actually translates. Obviously there's an opportunity for folks to shift their thinking in terms of how they're vetting potential deals, as well as how they're advising companies, as you mentioned. But in the actual day-to-day are you seeing receptiveness to the opportunity for change? 

I think that most VCs are not going to be good at doing that. They're just not going to be good at it. Because for many VCs, they haven't figured out the challenges around inclusion in their own firms. So if you can't figure it out in your own relatively small firm, how can you figure it out in a company that is, you know, growing from 200 to 500 to 1000 people? There are times when I'm very apathetic about the ability of a venture and of startup culture to actually change. 

It’s one thing to feel some social pressure to say that ‘Black Lives Matter’. And it's very much another thing to make that real within your own organization. I think you start with saying that Black lives matter and then start putting action behind those words. I hope that there are a lot of people who are doing the hard internal work, not just doing the publicity work. 

This isn't something that was built in in two days, and it's not going to be something that gets dismantled and rebuilt in two days. So I understand that there is some hard work to be done. But I also expect that people are held accountable for actually going out and doing the work. So I hope that, you know, when we look back in 18 months, we've made some clear and obvious progress.

Are there firms that you would say are doing it well, or at least making a concerted effort to turn it around,? Or folks that you think have really interesting ideas or methods that are creating some sense of change?

There are certainly folks like Charles Hudson and Sydney Thomas over at Precursorwho are doing that. But if you're asking me are there firms that are not Black-led who I think are doing a great job? There's no one that I would feel comfortable sitting up here telling you, ‘yes, they're doing a good job’.

That’s honest. You've been in this space For 15-plus years—even if the firms or the partners themselves haven't changed much, have you at least seen some sort of shift in terms of vetting more diverse companies? Has there been some sort of movement toward a more inclusive process of getting capital into the hands of a bunch of companies of underrepresented backgrounds?

I have seen more diversity in the founder space. When I first moved to San Francisco in 2008 there were very, very few companies led by Black or Latinx founders. If I look around now, I definitely see that the numbers have increased. I still think in a lot of ways, those founders are not getting the same level of attention, capital access, all of those things as their non-Black and Latinx peers. 

The other change I do see is that there is now a younger, more diverse VC community at the Associate and Principal level out there. I still think we're not seeing the numbers of partners at large, established firms that I would expect. So I think it's really, really difficult to change the numbers of Black founders who make it through the pipeline and actually get to an investment if we’re not also changing the person who's sitting on the other side of the table in that check-writing, deal-making, decision-making position at a venture firm. Not just the person sourcing deals, but the person who's actually able to carry a deal forward and get it done. And internally around the table, you can't decouple those two things because they are very much related.

We've been in a series of different crises over the last few months, both public health and now generations-long tensions about race and class and power have exploded. From a business context, how are you managing through all of it?

I think it's forcing people to be more thoughtful than I think they would have been normally, about how they intend to do business and how they intend to engage with their customers and their investors. 

In some ways, it's the last gasp of an old culture. We have a culture that's trying to change itself. and that can be disruptive, violent. Personally, financially on all levels these are uncertain times. It's also an opportunity to reimagine what you think business should be. 

For me it means reimagining what I think investing should be. A fund is a financial vehicle, but it's also a vehicle for changing an entire industry. It's a vehicle for changing who gets to write checks, who, what types of companies get funded, how those companies are going to grow, how they're going to hire, how they're going to support their employees, their shareholders, all of those things. 

I've seen you plant yourself in communities outside of the San Francisco bubble. Can you talk a little bit about finding and tapping talent, whether those are potential future dealmakers or the idea that innovation comes from everywhere, not just the bubble that is Silicon Valley? How has this played a role with Cake Ventures?

I started my investing career at 500 Startups— a firm that is very much global. I had the ability to not just look at US-based or San Francisco-based companies, but also look at companies, in Sub-Saharan Africa, Japan, Australia. So for me, I am just naturally less inclined to sit in San Francisco and say, “Okay, I'm just going to do deals in my relatively small backyard.” 

I want to make sure that I'm also seeing Black entrepreneurs, I'm seeing Latinx entrepreneurs, I'm seeing women entrepreneurs. I mean, the numbers of Black people in the Bay Area is absolutely abysmal, first of all, so if I was going to say “Well, I want to invest in Black founders, but I only want to do so if they're in the Bay Area,” I'm already making just the biggest mistake, right? 

It's really about figuring out where those people are. I mean, obviously, there's a massive Black professional community in Atlanta. And so if you're thinking about a place to go where people have, you know, domain experience and domain expertise, and might be thinking about starting a company in a category that they've been working in for a while, that's obviously a good ecosystem to really tap into. There are also great investors on the ground there, like Jewel Burks Solomon at Collab Capital, or like Paul Judge

Knowing who the founders are and then actually taking the initiative to get on a plane and go talk to them or at least create the relationship with the investors who live there 24-seven—that seems to me an obvious thing that you should be doing if you actually want to invest in diverse founders, and you're not just going to invest in people who come to your door.  I think of it as opening up my network as wide as it can be, so I see the full aperture of companies. 

What is the opportunity right now in terms of building those relationships, diversifying our networks, not just if you are Black or brown, but across the board, the opportunity that might exist since more of us have to work just from home? Maintaining those connections or creating those connections really has to be fostered in a way that is going to be far outside of say,  being at South by Southwest and kind of randomly running into someone for the first time. So how do you do that in a strategic way that is also not pandering or patronizing? 

I think there's a really big opportunity here for founders who are outside of the coastal cities, outside of New York, Boston, LA, San Francisco, Seattle, you know, the cities that get the most venture capital, because right now, investors are at home, not getting on planes very much if at all. And for an investor, a company that is based in San Francisco looks the same as a company that is based in Birmingham, over Zoom.

I think that's an opportunity to widen your network as a founder, but also to widen your network of founders, as an investor. We should be taking advantage of this opportunity to really think about ‘what does it mean to invest in places that have less venture capital dollars’? What does it mean to invest in some of those ecosystems and connect to some of those founders? 

A few weeks ago, we definitely saw a lot of VCs opening up and saying, “Well, I'm going to do office hours for Black entrepreneurs.” And I really want to make sure that people are doing that with the idea of, I'm doing office hours and that means I am putting them in my pipeline for a potential investment. Office hours are top of the funnel, right? And then you have to make it all the way down to the bottom of the funnel where, hopefully, an investment comes out. So I really want to make sure that they are doing that work to move them through the funnel, to actually have a positive outcome for both parties.

Are you seeing that side of the conversation happen? Where the intended outcome is to make investments in Black founders, seeing this moment as an opportunity for real growth and not just saving face on social media? Are those conversations happening on the back end? Do you know?

It's hard to tell. But I do hope so. I mean, I think you know, call it six to nine months, we'll know, right? Because we'll either see people getting investments or we won't, and I think both of those outcomes tell a story. I think you've done a great job at tracking people who have made commitments and you're continuing to hold people to a lot of those commitments and say, “Okay, well, they said they were going to do this and now they are doing that.” And really looking into the data behind it. That's what's necessary—to have a level of rigor around the data and the numbers that surround these statements of support.

So when we talk about diversity and inclusion, particularly as it relates to this world of funding, and startups, and founders, what the ultimate goal? What are we hoping happens when there is equitable funding across the board or resources or networks or parity? What does that, dare I say, utopia look like? How do we know that we've gotten there? And that we've developed the right level of leadership and insight in order to get there?

As we were talking about before, we're on the cusp of being a majority minority country. Or more aptly put, it's a new majority, right? A lot of a lot of states like Texas and California are already populated by a new majority. If we believe that to be true, and the numbers are there, the data is there, but we are still building products with the same default audiences in mind, and they're being built by the same type of person—the prototypical white male who went to Stanford and wears a hoodie, a Mark Zuckerbergish type then are we really building for the world? 

We are not building for the world that we have now. We are very rarely building for communities of color, we're very rarely building products that serve the needs of women. We use young, white, and male as the default, and we've had it as a default for so long that we don't recognize that there is a new default, and that new default is several new markets. What I'm looking for is for the products and the founders to be reflective of the world that we actually live in.  When we unpack whether we are doing a good job at meeting the needs of the market, then we start to see that perhaps the way that we've been investing in the past is not going to be the way that we continue to capture the largest part of the market.

Now that's not to say that white male founders shouldn't be building products. Of course, they should—everybody should be building, and everyone should have the same level of opportunity and access. 

What keeps you doing this work because I Imagine you could probably be on an island somewhere.

I don't know how to do anything else. This is what I was born to do.

It's powerful not just to watch you do your work, but to see how outspoken you are. There's this fearlessness in your approach. I think being Black or brown in public is rough, because there’s the question of, how much of myself do I really put out there? And how much do I lean back because I don't want to alienate potential partnerships or opportunities? And so I think the boldness in which you lead conversations or participate in conversations is very unique. As we close out, I’d love to get your personal philosophy and convictions around how you show up in the industry and how you lead vision and insights around what's taking shape.

Being Black in public and being a Black VC in the industry—there's a great gift there. But you're both invisible and hyper-visible all at the same time—even more as a Black woman VC, hyper visibility, hyper invisibility all at the same time. 

My philosophy on the things I say online, on the things I say on a podcast, or in print, I'm always trying to be as 100% myself as I can. My philosophy in everything is if I have to be fake, I'm not going to come. I’m not showing up,  I'll be at home where I can be real.

Once I made that decision, well, that is very freeing, right? You then know that you can walk into a room and be entirely yourself. And I'm not saying that it's easy from day one on the job, just graduating from university, that you can just do that. But I am saying that I think that's the goal, that's where you're trying to get to. That's the philosophy and that's how I show up in the world.

Having these conversations around race and around inclusion, it requires a certain level of grace. The Twitter bubble and the social media bubble can be such that some people may feel that they have to be as argumentative as possible. That's just not my style. I don't have time to argue all day on Twitter with anybody. But I think that you can open up conversations with grace and understand that people don't always have to agree with you. 

And, you may not change the mind of the person that you're talking to, but you might change someone else's mind who is watching you have this interaction. Right? And there are some ways that you have a conversation that will change hearts and minds. And there are other ways that you can be having a conversation that will change no hearts and minds. And I try to be really cognizant of which side of that I'm on.

I am grappling with how this conversation comes up and gets lost over and over again and how understanding the value of diverse backgrounds, and their potential as new market opportunities still gets lost. How do we keep this top of mind so it becomes an ingrained, cultural, institutionalized practice within businesses instead of just a statement of support or a donation? How are you thinking about that, even as you're building and conversing with business owners?

I think it's really hard. I think that there are going to be some people who are naturally inclined to continue having this conversation. And you know, those are the folks who have been doing the work for a very long time. And then there are people who do not have the stamina, do not care enough, or do not see the direct impact to their bottom line until it's too late. I think that's where the switch gets flipped—when they see the impact to the bottom line, then all of a sudden, it becomes not a moral imperative, but a financial imperative. 

I think you have to be okay with that. There's going to be some level of apathy, but the world is continuing to change and the people who are paying attention to that are the ones who are going to win, I believe.

This was a conversation between Sherrell Dorsey and Monique Woodward, edited for length and clarity by Annaliese Griffin.

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