Highlights from AMA with Lisa Feria from Stray Dog Capital

HBCUvc was excited to have Lisa Feria participate in our Slack AMA before the holiday break. Lisa shares the thesis of Stray Dog Capital’s investment strategy and how they aim to improve the food industry. She also discusses where and how she started in VC to how she reached the top of the food chain (no pun intended). Check out the thread below!

Q Evan Hamilton: Two areas I’m heavily exploring are vertical farming/urban ag as well as ghost kitchens. Both areas seem to have a lot of opportunities, but are also very crowded with highly capitalized players in each. Have you explored these spaces much? Is there too much hype in both? What are some elements the major players are trying to solve, but have yet to achieve?

A Lisa Feria: I can’t speak specifically to urban farming/ghost kitchens, but I can speak to highly capitalized spaces. When Beyond Meat went public, all of a sudden the market we’ve been investing in became interesting to many larger firms and flooded. We were concerned about losing out and being priced out of rounds, but what we found is that as long as we were clear on the value we brought to the table, we could still find a place at the table. For example, we’re so immersed in the categories we invest in, that we can tell you who you should talk to or who the best manufacturing partners are, etc. We go deep. Generalist funds can’t add that value, so we were able to still be a preferred partner. I would advise you to find a space where you become the expert on who the experts are.

Q Enrico Scott: I read in an article that by the age of 21 you were already managing more than 150 people, what do you think contributed to your ability to lead at such a young age? In this time with diversity in VC being a key issue brought to light, what are your thoughts and advice to those looking to break into the industry while being agents of change?

A Lisa Feria: Well done on your research! What contributed to being able to lead early is, frankly, that I had no other choice.

1. That was the job I signed off to do and I’ve always been a bit fearless when it comes to big challenges. So, I jumped in, made a million mistakes, learned very valuable lessons, and realized that I was able to survive in tough situations. That served me well later in life and my career.
2. I was at a big conference a few years ago and the speaker was sharing the sad state of diversity in VC. They mentioned that there were only a handful of Latina VCs in the US leading funds larger than $30M and held up her hand — and said, “I can count them with one hand”. That really stuck to me and became my fuel. I thought, “that may be true now, but I’d be damned if that’s true when I am out of the field.” So I study, learn, stay humble, and always aspire for big goals. My motto is “pull up as I go up” — and that goes to people of color in general, not just Latinx. That’s what I recommend, be an eternal student and always look to learn from others.

Q Louis Deas: I’m interested in pivoting my career from the nonprofit/communications sector to venture. Any recommendations on how I can best make that transition and what a Managing Director like you would look for from someone new to the field with no prior experience, but exposure through a program like HBCUvc?

A Lisa Feria: The easiest transitions to venture are via internships and talent accelerators such as HBCUvc. Other intersection paths include getting an MBA (or other higher degree) because the organizations usually help you find roles and you can gain access to alumni groups. I always take the calls that come from the colleges I went to. I consider it part of my responsibility to those institutions. In general, life is about relationships and timing. Once you’ve identified what investment field you want to go into, figure out the best contacts to get you there — those who either have a connection with you or who you can get a warm intro to and start a relationship. I have a few prospects who want to come work for SDC and even though we don’t have openings right now, they still send me interesting and relevant news they find or comment on acquisitions in our space. They are clearly passionate about the field and connected, those stay up in my radar.

Q Richard Clay: I’m curious about what your fundraising journey was like.

-What’s the spectrum of financial profiles amongst your LP base (i.e institutional, family offices)?

-Who specifically from institutional money did you have to speak with? Who really moves the lever in these types of conversations?

-What was the minimum capital allocation across the different funds?

-How did you go about framing your ideal LP and what really resonated “story-wise” with these folks?

-How often are you communicating with LPs and maintaining interest to warrant another capital commitment?

A Lisa Feria: What can I tell you about fundraising? It’s tough.

1. SDC has $50M AUM so almost all my LPs are family offices or wealthy individuals.
2. The institutions’ I’ve started conversations with have all been with their CIO or Director of Investments.
3. Minimum investment amounts from our LPs (I think this is your question?) — $250K and now $-1M.
4. For my first two funds, the ideal LP was the one willing to give me money. Now, I look for strategic folks who can help our companies be successful. Fund managers joke that the ideal LP is the one who never emails you. There is some truth to that.
5. We’re communicating with them constantly. Officially, once a quarter, but really, every week.

Q Ali Aly: I have been getting very curious about the agtech space — more specifically, how it can play a role in providing underserved communities and those within food deserts, access to nutritious meals. Have you explored inefficiencies in the food supply chain that lead to the increased cost of production? Do you think shifting the current farming model from large scale farms in limited locations to small scale farms in a greater number of locations would decrease some of those inefficiencies?

A Lisa Feria: Yes, to all your questions. We believe that the current food system is broken and results in food deserts as well as hunger. For example, it takes 3–5 calories to get 1 calorie out of animals (varies a little depending on the animal), and we spend a lot of land, water, and other resources for animal feed — driving up the cost of the inputs for actual humans. In addition, most of the animal farming today is done by massive conglomerates, not by small family farms. So yes, we believe indoor farming, small family farms, and a general adjustment of the food system is needed to also deliver food justice.

A Lisa Feria: One last thing, have you read reports about Dutch indoor farming? They have elevated it to an art.

Q Delsa Guerrero-Castillo: Why did you choose to invest in the plant-based market? How do you overcome imposter syndrome?

A Lisa Feria: I invested in the plant-based market when I saw a few documentaries (Forks over Knives, Cowspiracy, among others) that highlighted the negative effects of the food system on the planet, on human health, and animals. I realized I wanted to dedicate my time, talent, and treasure to helping reshape the food system to be more affordable, healthier, and better for the environment.

You overcome imposter syndrome by putting in the work every day, week, month, and year. By being an eternal student and always asking, “how can I make our fund, thesis, and process better?” Put your faith in that at the end of the path, you and your team will deliver.

But, don’t get me wrong. You get put in enough places where very few look like you and you start to wonder if you’re in the right place. Visualize success, put in the work, stay humble, and tell yourself good things to drown out the bad things your head may tell you.

Thank you to our fellows who participated with Lisa Feria from Stray Dog Capital’s AMA.