Cathryn Paine’s top priority as Anzu Partners’ most recently appointed partner is recruiting top science and engineering talent for its portfolio companies. When she joined the Washington, DC-based firm in 2017, Paine was upfront about not having a background in bioscience or most of the hardware engineering applications that Anzu focuses on.
Anzu co-founder and managing partner Whitney Haring-Smith eased her mind by telling her it was a transferable skill, but Paine said she “had to really study, and I still do that today.”
Because the start-ups seeking investment from Anzu are heavy on science technology, Paine often takes home company pitch decks to study and prepare for interviews. “It is just being willing to dive into technology enough to understand it to have informed conversations with candidates,” she said. “I thoroughly enjoy that part of my job. And the account piece of it is obviously a driver of good outcomes for the firm.”
Founded in 2014, Anzu focuses on life science, industrial, manufacturing and technology-related companies across North America, Europe and Asia-Pacific. It manages about $1 billion in assets across several funds and strategies, including Anzu Industrial Capital Partners III, which closed on $200 million in September and counts the New Mexico State Investment Council as a limited partner.
One of Anzu’s first 10 hires, Paine joined as head of people, as Anzu was raising its first fund and right after she had had her second child. “They wanted someone to be there day one to say, ‘This is what a healthy company looks like. This is what the leadership looks like. This is the kind of company we want in our portfolio.’ That has been my mandate since day one. I can’t think of a single time I’ve had to push for any of these ideas,” she said. “Now I’m lucky enough to be involved in the diligence process, but for the first couple of years I was just picking things up post-investment.”
The companies that Anzu backs often have a PhD or similar technical founder with no experience being part of a team, let alone leading one. Anzu provides management training in those cases. Paine is responsible for finding good trainers “who are cost-effective and empathetic to early-stage founders.”
It isn’t hard to enlist a coach to work with someone at a big company where money and time are plentiful and the executive can prioritize the training, she noted. However, “in the start-up world, it’s often the case that the executive is under a lot of pressure to do a lot of things very quickly. There’s not a lot of money or time, so we always work to find the right-sized resources for the portfolio executive.”
While many VCs make a show of offering support to founders, oftentimes what they “actually need is help today with this thing at 11 o’clock that they’ve got to get done,” Paine said. “What I love about my job is that we’re able to get in there and do practical things that they need.”
She believes most founders want to do the right thing but lack the time or don’t know which resources are available. Helping them with that is the way “we can move the needle on the culture in these companies and let the executives have the time they need to focus on technology and then run really healthy, happy companies.”
In her six years at Anzu, Paine and her team have recruited hundreds of highly specialized scientific, technical and industry experts across more than 25 portfolio companies. In 2022 alone, 93 people joined Anzu porfolio companies, representing more than half of the headcount growth.
Haring-Smith called Paine’s promotion to partner in September “a reflection of the ongoing professionalization of venture capital and of platform support. She is an instrumental partner to our portfolio companies as they think through growth and has become a trusted counselor to many of our executives.”
Getting started
After earning a Master’s degree at George Washington University, Paine was hired as operations manager at Frontline SMS, a tech NGO that was building tools to make mass communications easier for organizations in underdeveloped countries with poor internet access. While there, she became friends with a co-founder at Mapbox, a not-for-profit at the time that developed a location data platform used for mobile and web applications. After Mapbox secured its first funding, the co-founder asked Paine to join the company.
Initially, she was doing finance and legal tasks in addition to heading recruitment. After Mapbox secured a $53 million Series B round, Paine was able to work exclusively on talent because the company was finally able to hire a head of finance and a general counsel.
“It was not necessarily my plan, but like so many things in life, you’re given opportunities to thrive and I felt like that was a great fit for me and it’s what the company needed,” she said. With her guidance, Mapbox recruited 200 people over the next two years.
Over the years, Paine has learned how to quickly get up to speed on new technologies. These days she’s spending a lot of time on AI. She is a board observer at EnCharge AI, which is developing a scalable in-memory computing technology to provide orders-of-magnitude higher compute efficiency and density compared to current best-in-class solutions.
Early on, recruiting for EnCharge AI was relatively easy because of its formidable executive team. Initially, the strong professional networks that the CEO, chief product officer and chief operating officer had were enough to attract good candidates.
“Then it’s a snowball effect,” Paine explained. “People see three or four smart people going to one company and think, ‘huh.’ I call that the varsity team effect. Great people want to work with great people. Hard workers want to work with hard workers.”
That dynamic was thrown off after ChatGPT gripped the public’s imagination and AI start-ups started raising massive rounds. It is understandable that engineers who see all the media coverage are demanding richer compensation packages.
“We need to both be defensive in terms of protecting our game, but also nobody’s going to stay at a place where they don’t want to work,” Paine said. She and others at Anzu have worked hard with EnCharge AI to foster a company culture that can retain “high performers who want to be challenged and inspired.”
Fortunately, it’s much easier than it was 10 years ago to track comparable salary data now that it’s collected daily from ABT and other payroll companies. “We watch the data super carefully and make sure our people are competitively paid, that we have a comp philosophy in place that meant that our pay is equitable not just with the market but internally,” she said.
Creating a place where people want to work starts with a hard interview, Paine believes. Smart people have no interest in a company if a recruiter doesn’t dig down into who a candidate is to find out what they know and don’t know. “We work with our companies to do really thorough, good interviews, because then the top performers sit up straight and say, ‘Oh, these people know what they’re doing,” she said. “They know what they’re looking for.’”
Candidates are also increasingly looking for companies that are diverse, so Paine spends a fair amount of time making sure Anzu is helping its companies build diverse workforces. The firm’s portfolio currently includes at least seven companies led by either women or people of Southeast Asian descent.
The hardest part of recruiting, said Paine, is screening resumes and taking initial calls. Most founders don’t have time for that, which is why they tend to hire people they know or who went to their university.
Anzu’s secret sauce is that “we take a ton of calls and we put a lot more people into the pipeline whose resumes aren’t a perfect fit for the job,” she noted. “And oftentimes that’s people who didn’t go to the Ivy League schools or weren’t on the glide path to the top jobs.” By interviewing these candidates, “We find so many hidden gems, and that’s because we have the time to do it.”
The internal goal of Anzu’s recruitment team is to push three diverse candidates forward for any role. That means they don’t stop screening resumes and interviewing until they have them. “We’re putting people in front of the CEO that he doesn’t have to go out and find himself and who are great,” she said.
This is part of a series of occasional profiles about new partners at venture firms. You can suggest profile candidates to David Bogoslaw here.
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