Fuel’s Leah Busque on consumer investing and gender diversity

Leah Busque joined Fuel Capital in 2017, fresh off her success as founder and CEO of TaskRabbit.

In her role as a general partner, she invests in consumer technology, including marketplaces. She’s also a keen supporter of greater gender diversity in the venture capital ecosystem.

About 30 percent of deals at Fuel are focused on consumer, 30 percent go to B2B and SaaS businesses, and 30 percent target dev tools and infrastructure.

VCJ recently had the opportunity to speak with Busque about investing and gender diversity. An edited transcript follows.

Q: Where’s the energy in the consumer space?

A: We’re seeing a lot in the direct-to-consumer, brand-building space.

Everyday there are new companies being built and being formed that are providing new products to customers in a direct way that really take out the middlemen (and) that remove the need for retail, for locations, for traditional commerce. And they are reinventing the supply chain.

Q: What key issues do you see in marketplaces?

A: The question I always ask when I look at these businesses is: Is the market big enough?

Whatever product they are focused on — we’ve looked at direct-to-consumer brands in homewares, in food and travel and all kinds of products — really looking at the market size and the market opportunity is key.

But I really love going direct-to-consumer, owning the customer in a verticalized and integrated way. You can build a business and grow revenue with a lot more control than you can in the traditional retail commerce sense.

Q: Where are you putting your money in consumer?

A: We’ve done a lot of marketplace businesses in the last 12 months. Everything from home child care marketplaces to dogs and dog breeders. We’ve looked at office-space marketplaces.

We’ve just recently made an investment in a company that is focused on personal shopping as a marketplace business.

Q: What’s happening in the gig economy?

A: In the freelance economy, we are seeing a lot of tools, software, platforms, but then also new categories for freelance workers to plug into.

The future of work as a theme is definitely a big area we are focused on and one that I continue to see evolve and develop and expand. We’ll continue to invest there as well.

Q: What has surprised you most about being a VC?

A: Because I come with a founder’s perspective, my biggest surprise has been the reasons why a venture capitalist might say “no” to a founder.

As a founder, I tended to take things so personally. Why isn’t this investor believing in me? Believing in my vision? Am I just not selling the story in the right way?

But being on the other side, I sort of realized there are a thousand reasons why an investor’s not going to invest in a business that actually have nothing to do with the founder.

Q: Is gender diversity improving in venture and at startups?

A: I see change happening, slowly.

The trend I see happening, as a founder, is there are a lot of female founders who are coming up through the ranks, either through venture funds, or who have started their own companies and have had successful exits.

We are seeing more women join investment firms as general partners and venture investors.

That is a trend that is really important to watch because the more women you see in those investing roles, actually controlling where the money goes in the startup ecosystem, the more female-led businesses you’ll start to see getting funded by those firms.

Q: There has been an increase in funds focused on women, such as Backstage Capital, Female Founders Fund, Able Partners and XFactor Ventures. What do you make of this trend?

A: I think it’s fantastic. There’s #BUILTBYGIRLS. There’s Halogen Ventures down in LA. I look to those firms to co-invest with as much as possible.

Most of those firms are focused on earlier-stage deals than what we do here at Fuel, so it’s actually a nice sourcing pipeline for us to work with those co-investors and then go on and co-invest with companies they may have pre-seeded or angel invested in.

That is a really important part of the ecosystem that’s developed.

Q: You’re a member of All Raise, which is dedicated to diversity at startups and in the venture ecosystem. You have a number of initiatives there. 

A: Through All Raise we’ve been able to focus on initiatives, including Founders for Change, which has been a big movement in the community.

Through it, founders have publicly stated that they are looking for more gender diversity on their cap tables.

And that when they have a choice of whom to bring in as a new investor, they will keep in mind the diversity it brings to their cap table. Initiatives like that are really starting to take shape.