NEW YORK, N.Y. Polly Schneck is an energetic rising star in the venture capital world. With just two years under her belt as a venture capitalist, Schneck has been named partner at Labrador Ventures. She joined Labrador in June and opened their New York office in October.
When the partners at Redwood City, Calif.-based Labrador began considering an investment professional on the East Coast, Larry Kubal, founder of Labrador, says the partners could not find anyone who impressed them like Schneck did. They had co-invested on three deals with Schneck while she was at her prior firm, Scripps Ventures.
“Beyond checking all the standard boxes on the list – being smart, analytical, etc., Polly has a real passion for early-stage companies and real people skills,” Kubal says. “She is an artisan in the true sense in the venture business in a way that is difficult to put in words.”
Schneck admits a passion for VC, which she discovered while earning her M.B.A. She took a summer internship with Comcast Cellular Communications Inc. in its strategy group, and her main responsibility involved working with entrepreneurs who were courting the company for seed money. (Comcast sold its cellular division to SBC Communications Inc. in July 1999.)
Of the several business plans she reviewed, one group of entrepreneurs had a plan that involved a system for consumers to make impulse purchases on cell phones.
“My core project that summer was working with them, figuring out if it was a good investment idea for Comcast and also helping figure out how to build their business,” Schneck says. Comcast eventually provided the group with funding.
During her internship, she helped the entrepreneurs establish contacts, build their technology, decide on partnerships and evaluate their business plans.
Schneck does not know the fate of these particular entrepreneurs, but she believes that small companies with niche expertise will be important in the near future.
While Schneck identified vertical integration as a previous trend in corporations, she feels that a new trend involves companies spinning off units not key to their core business and seeking outside specialists to fill their departmental needs.
Schneck thinks this model offers opportunity for entrepreneurs to compete as major players.
Schneck says Labrador invests in these companies in their earliest stages. Labrador Ventures typically invests between $1 million and $2 million in its portfolio companies, and that usually accounts for a 20% to 30% stake in the companies.
Schneck calls it “Minding the Gap,” committing more than the angel investors but less than your average early-stage VC.
Like Kubal stated, she has a real passion for companies this size. “I love helping entrepreneurs build their team, build their network and work through their business plan,” says Schneck.
Schneck credits her pre-VC career with building her skill set. Among other things, she worked two tenures as a consultant for PricewaterhouseCoopers – post-M.B.A. as a strategy consultant in the entertainment, media and communications group and as an IT consultant before graduate school.
“The topics covered as a strategy consultant are very much akin to topics you work with as a venture capitalist,” Schneck says. “In doing due diligence on a company, you work through a lot of topics you address when you are trying to evaluate or rebuild a company’s strategy.”
Schneck saw an opportunity to move into VC following a shake-up in her group at PricewaterhouseCoopers and joined Scripps in 1998.
Schneck made six investments at Scripps: Ingredients.com, JobDirect.com, Comet Systems, MakeTheMove.com, Ripfire Inc. and Ezboard. Of those investments, JobDirect.com is the only company to exit by press time. The company was sold to staffing-giant Korn/Ferry International for an undisclosed amount.
Schneck says Labrador offered her an opportunity she felt she had to take. Although the portfolios of the two firms overlapped, she felt that Labrador invested in the earlier development stages and focused more on the underlying technology, which both fit in her comfort zone.
She has made one investment since joining Labrador: New York City-based Kargo, which joins the Labrador Ventures IV portfolio companies. Kargo provides applications enabling companies to offer their products over wireless media. She says the application is user-friendly, offers easy back-end integration and boasts a secret weapon that will differentiate it from its peers.
Labrador added Schneck in the New York office to review more business plans, lead more deals and participate more actively in its East Coast portfolio companies. Schneck has hired one associate, Ali Ahmed, for the New York office.
Labrador estimated that the firm was receiving around 25% to 28% of its deal-flow from the East Coast, and the partners wanted to establish East Coast representation in anticipation of the launch of Labrador Ventures V on Nov. 2.
Schneck’s promotion marks a gradually increasing female presence at the partner level in VC firms. Schneck says she has not run across any misogyny, and in fact, she feels that VC, particularly in the early stages, requires traits that are commonly associated with women.
“A lot of early stage work has to do with nurturing companies,” she says. “You get so involved with them, and you want to help them succeed.” Many VCs – men included – talk about their portfolio companies like the companies are their children.
“Have I found it difficult to be a female in venture capital? It’s hard to say, because I’ve never been a male in this industry.”