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#9 Mar Hershenson: building semiconductors startup, exiting to NASDAQ company, co-founding $330M+ Pear VC (investor in $60B+ IPOed DoorDash)
Co-founder and Managing Partner at Pear Ventures, a Silicon Valley seed stage VC with $330M+ AUM and investments like DoorDash (IPOed, $60B+ market cap) and Gusto ($516M+ funding)
We are Pol Fañanás and Gerard García, two friends passionate and curious about tech, startups and VC sharing bi-weekly high value views from people creating the future. Thanks for reading !
Mar Hershenson is Co-founder and Managing Partner at Pear Ventures, a Silicon Valley seed stage venture capital firm she created in 2013 with her teammate Pejman Nozad, where they work closely with founders to take companies from an idea to building defining business. The firm currently manages $330M+ AUM and a portfolio of companies which have grown to raise $5B capital resulting in a total valuation of $80B. Pear’s investments include Guardant Health (healthcare startup improving cancer treatment, IPOed in October 2018, $15B+ market cap), DoorDash (food delivery, IPOed in December 2020, $63B+ market cap), Gusto (cloud-based HR platform, raised $516M+ from investors like General Catalyst, Ribbit Capital and CapitalG), Branch (deep-linking platform, raised $360M+ from NEA, and Founders Fund) and Aurora Solar, (SaaS to empower solar systems, $70M+ raised from ICONIQ Capital, Energize Ventures, Fifth Wall and S28 Capital).
Mar arrived in Palo Alto in June 1995 at 21 years old and before the internet arrived. Thanks to her combined hardware and software focus during her studies, after graduating, she spent 13 years co-founding three startups (Barcelona Design, Sabio Labs, Revel Touch) in the mobile/e-commerce, enterprise software, and semiconductor industries. She ran each company from day one, and was deeply involved in all aspects of the business, including product definition and development, business strategy, sales, recruiting, and financing. Her work led to 14 separate patents and a successful exit from Sabio Labs to Magma Design, a NASDAQ-listed software company that designed integrated circuits to create complex, high-performance chips required in phones, games, WiFi or former devices like MP3 and DVD players. Mar served for 2 years as VP of Product Development after the acquisition before founding Pear VC.
Mar earned her PhD in Electrical Engineering from Stanford University in 1999, where she developed a technique for optimizing the design of analog semiconductors. She has continued to be involved with Stanford teaching different subjects throughout the years. She has also been recognized by MIT Technology Review as a Top Innovator Under 35, named a Champion of Innovation by Fast Company, included by EE Times in its listing of the Top 10 Women in Microelectronics, and awarded the Digital Automation Conference’s Marie R. Pistilli Achievement Award. Last but not least, Mar currently serves on the board of Palo Alto Community Child Care and is a technical advisor to the U.S. Soccer Federation.
Summary
👤 Brief intro: Stanford PhD, founder turned VC
🥇 Win: coming to Stanford / Silicon Valley in the 90s
🚫 Fail and lesson: not believing enough, we can dream bigger
🚀 Ideal founder: passion, driven by transcendental mission
💸 Ideal investor: adaptable, focus on making the founder better
📈 Markets: generalist, bullish on remote opportunity
🦄 3 startups: Alpine Roads, 42Layers, Juni Learning
👍 3 investors: Sequoia Capital, Felicis Ventures, Core VC
📖 3 books: “Hard Things About Hard Things”, “The Four Steps to the Epiphany”, “Testing Business Ideas”
Could you give us a brief intro about you and your origins?
I’m originally from Barcelona but I came to the US in 1995 to pursue a masters at Stanford. I liked it so much that I stayed for a PhD - fun fact, Larry Page and Sergei Brin were my classmates!
After school, I started a couple of companies, which was fairly typical here but my parents in Spain were scared that I was throwing my education away. However, the business went well.
Eventually, I built a great friendship with Pejman Nozad, a really successful business angel. We needed 4+ years of an ongoing relationship to build conviction, but we ended up being partners and founding Pear VC together, 7 years ago.
The business at that moment was easy: being close to Stanford, hosting really smart people and funding some of them. With time, it resulted in some incredible companies.
What would you say has been the biggest win in your life?
Definitely coming to Stanford. I didn’t know anything about Silicon Valley, I had no idea at all. In the 90s nobody in Spain knew about the Valley.
I applied to a summer program at Stanford and they let me in. Once there, as an engineer, it is like if you are an actor in Los Angeles - it’s hard to escape the movie industry. So at Stanford as an engineer no matter where you go you are gonna run into people in tech. You get immersed very quickly.
After the program, I came back next summer and got a job. Then I came back for another summer and got another job. In the end, it became clear I was not going back to Spain.
Related to the above, and your biggest failure?
Now that I’m old and I can reflect, I can say the failure to believe in yourself and dream bigger.
During 1993 while I was doing the summer course, before the internet took off, I could feel something really big was happening that was going to bring major change not only to Palo Alto but to the entire world.
You could breathe a lot of craziness at Stanford. I remember coinciding in time with Larry and Sergei there, the Google co-founders, in the early days of Google when they were building it up and making some noise, testing their code using Stanford servers and often causing issues with the power system of the university.
At that moment my profile was that of a hardware circuit designer engineer and I did not necessarily hold a believe to think I could play in a different game. One thing I didn’t realize was that we humans can learn pretty much everything, so I should have taken the change to go early to Google. You are more capable than you think.
What is your ideal founder profile?
I think the best founders are those that have something to prove, that come with internal failures they want to show they can overcome.
They have their own internal passions and are not exclusively motivated by making money or fame. They want to change something bigger than themselves, their mission is too big to be mundane, their mission is before themselves.
The most important thing is the motivation behind them. There is a long list of traits that make a good leader, not everybody has everything, but most have: focused, great communication, generosity...
What is your ideal investor profile?
The ideal investor is the one that adjusts to the type of founder they work with. Those that have great dynamic range.
It’s almost like being a great soccer coach. If you are the FC Barcelona coach the way you coach Messi is different from the way you coach other team members. Same here, each founder needs a different thing: a second-time founder needs different kind of help from someone fresh out of school that has never hired and fired. The investor needs to know how to adapt to make the entrepreneur a better founder, reminding ourselves that we are only successful if the founders are successful.
Investors need to offer a lot of resources. Sometimes it is time and just listening but keeping in mind how can I make this person the best she/he can be? You can learn how to become a great CEO. You are not innately incapable of doing it. If you want to, you can. Attitude is key.
What present and future markets are you most interested in?
Our firm is pretty generalist, we invest in almost everything. Every 15 years or so there is a big shift: Internet was a big thing then mobile was another big thing that changed entire industries and now, I believe the biggest disruption is working remotely.
Right now many things are shifting to remote environments, video and audio is having an effect in multiple industries like medicine and factory automation. Not everything but a big percentage. We have been at home long enough that some changes could be permanent. So all around whatever empowers a better remote experience, the whole full stack from infra to apps, is interesting. We are at step 0 of this big shift.
I compare Zoom to Netscape. I remember when I was in college Netscape was the big thing and now nobody uses it. It was the darling of Wall Street but still many evolutions came afterwards. I think the current remote environment will trigger a similar effect, great companies will arise and we gotta find them!
Could you share with us 3 startups you like and why?
This is like choosing your favourite child, depends on the day right? Whether they have been good or bad. Haha
We have many great companies, some consumer-focused and some super techie, we have done a lot of investments recently that also try to have a better impact. The newer generations are trying to invest for good.
Alpine Roads, plant-powered technology growing milk protein and producing vegan cheese. They are in the same category as Impossible Foods. You won’t be able to say whether a mozzarella is coming from an animal or not. Cows are one the highest polluters in the world and if the company is successful, it will have a huge impact.
42Layers, who are providing a simple tool to automate customer data onboarding and reporting. Take the example of a traditional hospital in the current days, the company is providing the infrastructure needed for telemedicine. Hospital workers are not data scientists so how can they handle thousands of meetings and data? You will hear of them.
Juni Learning, a global university for children. Education is another giant category that will be transformed due to the remote shift. They are connecting super good students at Stanford, MIT, Harvard, and so on with kids anywhere in the world to teach computer science, maths and English.
Could you share with us 3 investors you like and why?
I have a lot of respect for everybody investing, it’s hard to pick but I’ll do my best!
Sequoia Capital. They are good friends of ours. They have helped us throughout the years and there is nothing else you need to do but look at their results. Incredible companies, every partner works extremely hard and has a top discipline. Hats off, very successful.
Felicis Ventures. Again, great results, great discipline, and great added value to their portfolio companies and founders.
Core Innovation Capital (Core VC). In the Valley, at seed, we are seeing big multistage firms that do everything but also a new trend is increasingly emerging, new smaller boutique firms with a narrow focus. They specialize in specific types of businesses or market verticals and are poised to do really well. Core VC is a good example of this with a focus on the financial services vertical.
What are the 3 books you feel everyone should read and why?
I will reduce everyone to founders. I like to give a couple of books to my founders because I work very early with them. Many are engineers and sometimes extra guidance on softer skills adds significant value.
“The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers” by Ben Horowitz. One of the best books. If you have been a founder and have scaled a company, the book speaks to your heart and soul. It gives a very honest perspective, not only when things go right but also when they go in the opposite direction, your emotional journey as an entrepreneur. Highly recommended for every founder.
“The Four Steps to the Epiphany: Successful Strategies for Products that Win” by Steve Blank. Old but recommended for years. How to measure progress in the early stage of building your company. Definitely worth reading if you are getting started.
“Testing Business Ideas: A Field Guide for Rapid Experimentation” by David Bland and Alexander Osterwalder. A book I always make my students read. It targets super early founders and basically provides a framework that helps you identify how to save time when you are working on the wrong thing to quickly move on to something more productive.
WILDCARD QUESTION
Can you share what key factors helped you go from selling your startup to successfully launching a new VC in the highly competitive Silicon Valley? What is the unique angle to seed stage VC that helped you get 2 IPOs and $80B portfolio valuation in less than 10 years?
I would say there is no magic secret!
Number 1 ingredient is very hard work. It looks very flashy from the outside but it is about extremely hard work from the inside. I wake up at 5am in the morning and I average 12 hours of work daily (even weekends!). Not a life for the faint of heart.
Number 2, long term game. When we started Pear VC we wanted to see how to make decisions that lasted long term. To us, it was very important to build a fund that was going to be around for many years, 100 years I would say. We wanted a firm to be bigger than the 2 of us and part of our ethos is always having very long term thinking and decision-making. Not doing the best for the short term and bad for the long term. We do things without expecting something in return and we hope that it will come back eventually. And it does come back. Help, help, and help, that’s our key factor.
Big thanks Mar for sharing your views with us !
Big thanks to you, reader, for your time and interest !
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