Venture Capital Investing in FinTech

January 19, 2023

In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman, Director, Publications, EisnerAmper, speaks with Rachel ten Brink, General Partner of Red Bike Capital, a Latina-led seed stage fund based in New York investing in fintech, ecommerce infrastructure and future of consumer. Rachel shares her outlook for investing in those areas, including the greatest opportunities and challenges, her experience being a woman investment manager in the industry, how the firm is embracing DEI and more.


Transcript

Elana Margulies-Snyderman:Hello, and welcome to the EisnerAmper Podcast series. I'm your host, Elana Margulies-Snyderman. And with me today is Rachel ten Brink, general partner of Red Bike Capital, a Latino-led seed-stage fund based in New York, investing in FinTech, eCommerce infrastructure and future of consumer. Today, Rachel will share with us her outlook for investing in those sectors, including the greatest opportunities and challenges, her experience being a woman investment manager in the business, and how the firm is embracing DEI and more. Hi Rachel, thank you so much for being with me today.
Rachel ten Brink:Hi, I am thrilled to be here. Thank you for having me.

EMS:
Absolutely. So to kick off the conversation, tell us a little about your firm, yourself, and how you got to where you are today.
RTB:Sure. So I'm Rachel ten Brink. I'm the general partner of Red Bike Capital. To give you a little background of my career, I started my career in consumer. I spent 15 years building billion-dollar brands. I was Estée Lauder, L'Oréal, Elizabeth Arden, and then in 2014 started a company called Scentbird. We were backed by Y Combinator, raised 29 million in venture capital, which actually makes me one of 90 Latinas that's ever raised over a million dollars. Scaled that business and then started to spend a lot of time advising companies. I was on several advisory boards, started to do a lot of angel investing, was quite successful, and that led to the start of Red Bike Capital.
EMS:Very interesting and unique background, Rachel. So to segue into the conversation, given your focus on investing in the sectors I mentioned, FinTech, eCommerce infrastructure, wellness, and more, I wanted you to share your overall outlook for those spaces.
RTB:So we broadly define our thesis as powering the economy and improving people's lives. We see digital transformation as progressing rapidly with many legacies, businesses just starting to be transformed by the capabilities of technology. There are companies being built today that are solving real problems and are just starting to scale. And despite all the economic headwinds and the fact that it seems pretty grim out, there are always opportunities for those that are ready to grasp them that have the right focus, talent and execution. So we actually think it's a great time to be investing in building an early stage portfolio, specifically within the sectors that we invest in FinTech. We are particularly interested in how technology has enabled alternative underwriting models of credit and risk that are inclusive of underserved creditworthy sectors of the population that are often excluded in traditional risk models and business practices.

These underserved sectors of the population are disproportionately diverse and affect their access to credit and financial services and therefore limit their financial mobility of minorities. The second segment that we're really excited about is within SaaS. We like technologies that are specifically optimizing specific verticals like online and retail sales acquisition, improving efficiency and increasing sustainability and decreasing waste Within eCommerce. We also think about how AI can empower better decision-making across all areas of commerce.

And finally, health and wellness obviously impacts all of us. There are large knowledge to directly improve access, care and outcomes. We look for startups that have the potential to significantly improve people's lives and particularly care a lot about women and minorities. We're excited about the next generation of telehealth and home testing companies that are going above and beyond. It's connecting those dots between healthcare and consumer and for authoring better outcomes.
EMS:Very interesting. Rachel, on the other hand, I wanted you to address some of the greatest challenges you face looking ahead and why.
RTB:So I think that beyond sort of the macroeconomic conditions, and I think it's impossible to ignore the challenges, but as I said, we also look at it as great opportunities for early investing. I think personally for me, it's time management. Venture capital is sort of seven or eight jobs rolled up into one. And so number one, first and foremost for us, and for me personally, it's how can I add value to my companies? We're very much, I would say, the prototypical operator led fund. My areas of expertise are revenue and growth. And so for example, Monday I spent an hour and a half with one of our portfolio companies really jamming on their acquisition strategy and how they can think about their customers. So that's first and foremost.

I think the second part is connecting with my LPs. How can I help them? How can I help their objectives, their priorities beyond just financial outcomes, which obviously is a number one, but how else can I be truly valuable to my LPs? So that's just two jobs, right? Then comes the other piece of it, which is looking at new companies, meeting with new founders, identifying opportunities, understanding the marketplace. So that takes a lot of time in how you nurture. And I would say finally, there's a whole part that is around brand building for the firm where great opportunities like this are very helpful.
EMS:Rachel, being a woman money manager. Clearly, you're an inspiration to so many others in the business. So I'd love to hear your experience being a woman and what you're doing to inspire other younger generations to follow in your footsteps.
RTB:I think it's something that as the more I've been doing this, the more conscious and the more thoughtful I am about it. I think for most of my career I just put my head down and worked. I built brands, I built companies, and I really focused on delivering results and building businesses. Yet the reality is here I am one of 90 Latinas that's ever raised over a million dollars as a general partner. I am literally 0.1% despite the fact that Latinos represent 20% of the US population. One in four babies born in the US today are Latino. So I represent a huge community, a huge economic force that has so much potential, and yet I know how tough and lonely it is to be the only one in the room. And so I'm very deeply committed to develop diversity. I think that the reality is its good for the tech ecosystem and it's very good for returns.

So I think that besides my day job as a venture capitalist, I think it's really important to give back to the community and to be a visible role model. I joke that my aspiration in life is to be a professional door opener. And so first of all, I'm proud to be a mentor in several accelerators and also taking every opportunity to talk about how diversity really can add value to business.
EMS:Absolutely, Rachel, and that segues nicely into the next question I have for you about how your firm is addressing or integrating DEI, both at the overall firm level and also at the investment level.
RTB:So the way we think about DEI is, we don't really think about DEI as such. I think about it as growth and opportunity. I think it's very much in our DNA, we are two Latino general partners, which is obviously a rarity, and we know that it is proven that diverse teams perform better. So for us, when we look at companies we're investing in, when we look at investors we want to partner in, we know that diverse teams, and that can be very broadly defined. It's not just gender or age. It can also be experience, it can also be life perspective. We think it's very important as a woman in a Latino-led fund, I really see it as a superpower. I get to sit in rooms that others don't. I get to see opportunities that others underestimate. So it's always sort of a unique power.

And what I'm also finding is the smartest founders know there is power in that. And so we're seeing that really smart founders actively seek out diverse investors because they know that they're going to get that value add, that they're going to get that perspective as a woman, as a Latino, as an operator, as a CMO, as a CRO, that can really help them scale their business. When I think about building Red Bike, it's not just about fund one, it's really about building a firm and becoming a permanent voice in the VC ecosystem. I think to truly bring diversity to the tech ecosystem, we need to be best in class and not just raise fund one, but a firm that transcends. We invest in the best founders and are proud of our track record in diversity. 80% of our angel investments prior to launching the fund had a woman or diverse founder, and so far, four out of four investments that we've done in fund one have had a woman or diverse founder.
EMS:Rachel, we've covered a lot of ground today and I wanted to see if you have any final thoughts you would like to share with us.
RTB:Sure. Our objective is to provide risk adjusted returns to our investors. We expect to achieve this goal with a two-pronged strategy, so we invest diligently in promising startups at attractive valuations. We expect to leverage our networks to source some of the best-in-class companies and founders that will translate integrate success stories. But I think the second piece of that is to improve our investment odds and outcomes by proactively investing our time, our network, our Rolodex, to mentor and help our portfolio founders succeed. Really leverage our operational expertise in large network. In the end, our vision is to build a lasting firm that delivers real change in the VC ecosystem.
EMS:Rachel, I wanted to thank you so much for sharing your perspective with us today, and thank you for listening to the EisnerAmper Podcast series. Visit is eisneramper.com for more information on this in a host of other topics, and join us for our next EisnerAmper Podcast when we get down to business.

Transcribed by Rev.com

About Elana Margulies-Snyderman

Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.


More in This Series

Private Equity Investing in Consumer and Health Care
Private Equity Investing in Consumer and Health Care

Learn about Samantha Ory, General Partner of Ouroboros Group outlook for private equity investing including the greatest opportunities and challenges, her experience being a woman investment manager in the industry.

Asset Backed Specialty Finance Enhanced Through Blockchain Technology
Asset Backed Specialty Finance Enhanced Through Blockchain Technology

EisnerAmper, speaks with Kevin Miao, Head of Credit at BlockTower Capital who shares with us his outlook for asset-backed specialty finance enhanced through blockchain technology, including the greatest opportunities and challenges. He addresses how the firm integrates DEI.

High Income Marketable Alternatives
High Income Marketable Alternatives

Learn about investing in high income marketable alternatives portfolios, including the greatest opportunities and challenges, how Preserver Partners integrates DEI and more.

Convexity Strategies
Convexity Strategies

In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman, Director, Publications, EisnerAmper, speaks with Nancy Davis, Chief Investment Officer of Quadratic Capital Management, a Greenwich, Connecticut-based investment advisory firm focused on convexity strategies.

Deep Tech Venture Capital Investing
Deep Tech Venture Capital Investing

In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman, Director, Publications, EisnerAmper, speaks with James Wang, General Partner, Creative Ventures, a deep tech venture firm investing in early-stage companies. He shares his outlook for VC investing in early-stage companies, including the greatest opportunities and challenges, how the firm is embracing DEI and more.

Emerging Markets Infrastructure Debt
Emerging Markets Infrastructure Debt

A discussion with Susan Wisialko, Founder and CIO of Global Infrastructure Finance, who shares her outlook for investing in emerging markets infrastructure debt, including the greatest opportunities and challenges, how the firm is integrating ESG, DEI and more.

ESG Investing
ESG Investing

A discussion with Ima Edomwonyi, Executive & Senior ESG Analyst at Franklin Mutual Advisers who shares his outlook for ESG including the greatest opportunities and challenges, how the firm integrates it and more.  

Systematic Investing
Systematic Investing

A discussion on the outlook for systematic investing including the greatest opportunities and challenges, how the firm is integrating ESG, DEI and more.

Venture Capital Investing in Women-Owned Entrepreneurs
Venture Capital Investing in Women-Owned Entrepreneurs

In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman, Director, Publications, EisnerAmper, speaks with Victoria Pettibone, Chief Investment Officer & Managing Partner, Astia Fund, a Silicon Valley-based early-stage venture capital fund that invests in women entrepreneurs.

Private Credit
Private Credit

A discussion with with Danielle Brown, CEO, Altriarch Capital Management on her outlook for private credit, including the greatest opportunities and challenges, her experience being a woman investment manager in the industry, and how the firm is embracing DEI. 

Growth Equity Investing in Hospitality & Hospitality Tech
Growth Equity Investing in Hospitality & Hospitality Tech

In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman, Senior Manager, Publications, EisnerAmper, speaks with Mark Leavitt, Managing Partner & Co-Founder of Enlightened Hospitality Investments, a New York-based growth equity fund he co-founded with restauranteur Danny Meyer. He shares his outlook for investing in hospitality and hospitality tech including the greatest opportunities and challenges, how the firm is integrating ESG, DEI and more.

 Investing With Purpose
Investing With Purpose

The outlook for sustainable investing including the greatest opportunities and challenges, thoughts on the SEC’s rules to enhance ESG disclosures, how the firm is addressing DEI and more.

Investing With a Climate Lens
Investing With a Climate Lens

Zach Stein shares his outlook for investing in companies focused on addressing climate change, including the greatest opportunities and challenges, thoughts on the SEC’s push for more transparency, how the firm is integrating DEI and more.

Interval Funds
Interval Funds

Kim Flynn, Alternative Investments, XA Investments, shares her views on interval funds including the greatest opportunities and challenges, how the firm integrates ESG, the challenges of making private investments more accessible for every investor and more.

The “Social” Component of ESG Investing
The “Social” Component of ESG Investing

A discussion on the “S” or “Social” component of ESG investing, exclusively on economic inclusion and high-volume responsible lending to small businesses including but not limited to women, people of color, veteran-owned businesses and those in low income areas.

Systematic Global Macro Investing
Systematic Global Macro Investing

A discussion on the outlook for systematic global macro investing, including the greatest opportunities and challenges, yield investing, ESG and thoughts on the SEC’s push for enhanced transparency.

80/20 Rule for Investing
80/20 Rule for Investing

A discussion on the 80/20 rule and how it applies to investing, the SEC’s approach to 100% disclosure, DEI and more.

Water Investing
Water Investing

EisnerAmper speaks with Matt Diserio, President of Water Asset Management, a New York City and San Francisco-based investment manager deemed one of the first water industry investors investing exclusively in companies and assets that ensure water quality and supply.

ESG Real Estate Loans
ESG Real Estate Loans

A discussion with Chris Callahan, President & CEO of X-Caliber Capital about his views on investing in ESG-focused real estate loans, including the greatest opportunities and challenges in the space, what the firm is doing to champion DEI and more.

Crypto Hedge Fund Investing
Crypto Hedge Fund Investing

In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman speaks with Sadie Raney, Co-Founder and CEO at crypto hedge fund Strix Leviathan and Co-Founder at crypto robo advisor Makara.

ESG from a Risk Management and Investment Perspective
ESG from a Risk Management and Investment Perspective

A conversation with Patrick Ghali, Managing Partner of Sussex Partners, who shares his outlook for the alternative investment industry, including strategies he sees most attractive and ones that face the biggest challenges.

Capital Raising in a Hybrid World
Capital Raising in a Hybrid World

The outlook for capital raising in a mainly virtual world, how he pivoted during COVID-19, advice he has to successfully raise capital and finally, what he anticipates capital raising will be like post-COVID-19.

Equity Risk Management
Equity Risk Management

Ricardo Cortez, Co-CEO of Broadmark Asset Management, shares with us his background of how he got into investing, his outlook for the hedge fund industry, including the greatest opportunities and challenges, and how he is championing DEI on both a firm-level and throughout the alternative investments industry as a whole.

Outlook for the Fund of Hedge Fund Industry
Outlook for the Fund of Hedge Fund Industry

Elana Margulies-Snyderman speaks with Luis D’Amato, Partner and Portfolio Manager of Aston Capital Management. He shares his background of how he got into investing, his outlook for the fund of hedge fund industry.

Climate Change
Climate Change

In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman speaks with Tom Soto, Founder and Managing Partner of the Diverse Communities Impact Fund (DCIF), a Latino-owned lower middle market impact-focused private equity fund based in Los Angeles.

U.S. Lower Middle Market Investing
U.S. Lower Middle Market Investing

In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman speaks with Brett Hickey of Star Mountain Capital who shares his views on the U.S. lower middle market, and the various opportunities he sees in making direct investments.

Distressed Credit and Special Situations Opportunities
Distressed Credit and Special Situations Opportunities

In this episode, Cindy Chen Delano of Invictus Global Management shares her non-traditional path into money management, her outlook on alternative investments with respect to distressed credit and special situations, her experience being a woman money manager, what she is doing to encourage more women to go into investing, and how the firm is embracing D&I.

Multi-Strategy Hedge Fund and Opportunistic Credit Investing
Multi-Strategy Hedge Fund and Opportunistic Credit Investing

Elana Margulies-Snyderman speaks with Tracy McHale Stuart, Managing Partner and Chief Executive Officer of Corbin Capital Partners. She shares her views on alternative investments, how the firm has incorporated ESG into its principles, her experience being a woman in alternative investments, what the firm is doing to champion D&I and more.

Investing in Diverse and Emerging Managers
Investing in Diverse and Emerging Managers

Elana Margulies-Snyderman speaks with Kelly Chesney, Co-Founder of Pluscios Management. She shares her views on alternative investments, how she got into money management, how her firm has been a pioneer in investing in diverse and emerging managers, her experience being a women in investing, what her firm is doing to champion more women at a young age to foray into money management.

Private Equity Investing in Media and Entertainment
Private Equity Investing in Media and Entertainment

In this episode of we speak with Vania Schlogel about her views on private equity, the specific opportunities she sees, why she opened an office in South Korea, her experience being a woman in the industry and more.

Latino Money Manager Empowers Young Hispanics to Foray Into Money Management
Latino Money Manager Empowers Young Hispanics to Foray Into Money Management

Lorenzo Esparza discusses his views on alternative investments, how he got into money management, what is he doing to champion more young Hispanics to go into investing careers.

Raising Capital When Everyone Is Scared: A Conversation with Garry Jensen
Raising Capital When Everyone Is Scared: A Conversation with Garry Jensen

As we continue to explore the capital raising environment for funds in a virtual context against a backdrop of economic uncertainty, we turn to Garry Jensen, Managing Partner of Jensen Capital Partners, to get his insights.

Raising Capital When Everyone Is Scared: Do Investors Really Buy Low?
Raising Capital When Everyone Is Scared: Do Investors Really Buy Low?

In this podcast, we look to Julia Mord for her perspective on asset allocation, manager selection, and market conditions.

Innovation In Private Equity Using Structured Financial Products
Innovation In Private Equity Using Structured Financial Products

In this podcast Christopher Mizer of Vivaris Capital, delves into what structured financial products are and why they are attractive investment opportunities to investors.