Diane Yoo, Founding Managing Partner, Medingenii Capital
Diane Yoo is a results-driven entrepreneur, venture capitalist and angel investor with more than 15+ years of experience. As an accredited investor, she has invested in 30+ companies and is passionate about empowering women and diversity investors and founders. With only 1% of Asian females leading as Partner or Founder in Venture Capital, Diane is the first woman General Partner for medtech and healthtech venture capital in the heart of the largest medical center of the world, Texas Medical Center. With a proven track record, she is a seasoned expert as founder and partner to several investment funds and investment networks. Diane has extensive experience in leading deals, sitting on boards and leading companies to successful exits.
Diane joins me today to discuss her road to venture capital which had stops in the restaurant and bar industry and the fashion industry. Diane speaks to how these industries helped her to express her creative side that is sometimes missing in the business world. She shares with us her work with universities.
“I think it all comes down to relationships, whether it be an entrepreneur, investor, it all comes down to having a great reputation, building a brand and having these relationships and a large part of it is.” - Diane Yoo
Today on Startups for Good we cover:
- Venture Capital
- Advocating for diverse teams
- Starting your own venture capital firm
- Creating expanded opportunities for minorities in tech
- Why business relationships are so important.
Connect with Diane on LinkedIn.
Some of the books that Diane referenced are:
The Business of Venture Capital
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Transcript
Miles
Welcome to startups for good. Thanks for coming on.
Diane
Thank you Miles for the opportunity I'm excited to be on.
Miles
Maybe we could start with telling a little bit of your personal story. You've had success in so many different fields. And now an investor I'm curious to hear how you ended up as a VC.
Diane
Absolutely. I'm an entrepreneur turned investor. So firsthand, I understand the pain points of being an entrepreneur and empathize with them. I actually was an entrepreneur for over a decade ago and built a portfolio in food and beverage, as well as consumer and continue growing that securing a lot of national deals, local, national regional deals, and really can do with my eyes closed and then dabbled also into restaurants. But eventually turned into fashion design, I was actually a fashion designer, I like to say I was in, quote unquote, the sweatshop because I truly was in the back, doing sketching, to designing, you know, the fabrics, it was everything but glamorous, but I loved it. And it really brought out a lot of the creativity, that we are missing in business. So it was a really great excursion for me. And then from there, I never told, you know, my boss that I was actually an entrepreneur, a businesswoman. So I went into the corporate retail side after that, and spearheaded digital, and I realized there's a huge gap in this industry at that time, where Instagram had just come out. So it was a wild wet, you know, Wild Wild West, there's no real regulations on Instagram, the ton of data out there that we could pull. And I was, you know, I came up with this idea of a lot of Instagram marketing site. This was a long time ago. And within two days, we had over 100, people got the data and survey out there and it confirmed it. In two days, we had over 100 influencers sign up, and we had over 10 throughout my fashion network designer sign up in companies dying if you have this product we needed. So it was a matter of me building a team, getting funding and getting it going. So we started the roadshow. And so it was very successful, in terms of getting to the roadshow and learning a lot about pitch competitions and learning about that. So it was, it was really exciting. And then we made at the qualified qualifiers of the largest Rice business plan competition, student competition in the world. So very exciting time. From there, I saw actually a lot of woman leaving. And this was earlier in the day back in Houston, want diverse woman leaving to other cities, of course, to Silicon Valley, to more robust innovation ecosystems, where there could be people, experts who could help them grow companies. We saw a lack of that in Houston. And so I started interviewing and talking casually to woman entrepreneurs, what's going on? And there just wasn't enough ecosystem there to support them. So I dug down deep with a network that I had and thought, you know, maybe I should learn more about VC. So at that time, I was doing my Rice MBA, took my first VC class. And Miles you know, about entrepreneurship. There's something about this thing called gut instinct. And as a serial entrepreneur, you know, this is it. This is something I could die for this, this makes sense to me. And that was VC took my first class, fell hard in heels over loving, and this and pursued it. I was told at the beginning, there's no way you can make it, there's not enough jobs to begin with in Houston. And I knew how difficult it was to raise money as a woman, minority entrepreneur. But on the business side, there was a stark opportunity. And so dug deep, and started from the bottom and got to where I am today. And since then have done investment networks, Angel networks and venture fund numerous and also worked with universities as well. That's where I am today.
Miles
Yeah, thank you for telling us that story. Again, so many different areas that you've been involved with. I'm curious, before becoming a VC. What was your interaction as an entrepreneur with VCs? Did you raise money? Did you try to raise money? And what was it like?
Diane
Absolutely great question miles. So again, as a woman, minority entrepreneur, it was hard to find the right people that could really understand what I was doing, aside from just being a woman or minority. That's that put that aside, being in fashion. You know, in Houston, as soon as I spoke to angel investors, it went over their head, that's not the majority, obviously, being in Houston, or even within Texas, to have a, you know, expert fashion VC investors. And then tech went over their head, too, right. And so combining those two together was really difficult to fundraise. But I knew on the fashion industry side that it was a huge, it was needed, the company that I built. And so I was actually considering maybe we should be fundraising out in the New York or, you know, Silicon Valley, but it was, I had the first hand experience of understanding this expertise of raising four, as a woman minority in the fashion tech role. Very difficult.
Miles
And how does that inform your approach to making investments today?
Diane
Absolutely, so we see, you know, hundreds, if not a lot of deals. And as an entrepreneur turned investor, I understand the pain points as, as you know, fundraising, building a team, all the difficulties of growing companies as an entrepreneur, so I can empathize with them. So it really helped me understand there's a huge opportunity for woman, diverse investors to pave the way to become experts and to reach and help these entrepreneurs, and really make an impact. But Furthermore, create a legacy. And that's what my personal branding, is creating an impact for women and diverse investors in the venture world.
Miles
And I'm sorry,
Diane
yeah, what in what can we do to really elevate and create opportunity, and put more women in diverse people in executive positions.
Miles
And as you were raising money with this thesis to make investments in a more diverse teams, what arguments were you making to your limited partner investors about why that would be good.
Diane
As you know, the diversity of performance, you see that on the financial returns as well. And you know, it's not more so that we're we want to focus on solely on like a color lens type of being rained on because they're a woman or because, you know, their ethnicity, but more so it's like, when I speak to entrepreneurs, for example, they asked me, How do we get to the top, you know, you see 1000 deals, how do we get on top of that pile, so you can see it. And I say, I don't really look at this by color or gender, but I challenge you as entrepreneurs, to be the best person of excellence. And that's what's gonna catch me, of course, the cycle of relationships and other ways. But really having an excellent pitch deck and everything. You know, i's and T's dotted will help risen to the top with it.
Miles
And tell us about starting your own VC firm. How do you go about doing that?
Diane
Absolutely. It's It's not difficult. I was told no many times in the beginning. So initially, I started I was crazy. People thought I was crazy. I took an internship in a non paid internship. I didn't care I fell in love with VC. I know this, right. So started as an intern. Got in where I could. And, and I highly recommend if anyone wants to NBC get into a boutique VC or boutique firm, we can wear multiple hats. So you're not pigeon holed into just being one, you know, starting as an associate or as an intern. So luckily, I was able to do a lot. And I was able to learn quickly, and run this small organization and grow, grow. That organization, started with the large Convergence Ventures and then worked with the Rice Angel network. We were I was able to help build that I was managing director on the operation side as well. We hired over 10 staff, we were speaking with countries across the world on we would hear from Africa to Asia, Europe that would want to be pitching part of the Rice alumni. And so continually working that building network and relationships really powerful. And then from there I was I just jumped in started my own VC. And really it's all about being an entrepreneur. It's about building the right team, the right high performing team, the right people.
Miles
And how do you choose to focus on healthcare?
Diane
Great question. I'm not a doctor. But I understand investments and be seen how to track what I could pull together within my network resources and know how operation side of the fund, but I wasn't a doctor. So tap doctors that had specifically MD MBA with experience with med tech or entrepreneur experience, and then continued to build out the team from there. And that actually became our greatest advantage point, right? Is we soon entrepreneurs like you're leaving a deal. So because the expansive network we had and medical costs us that we could tap into
Miles
Is there a company that particularly inspires you in your portfolio?
Diane
Oh, so many, I can't I can't play favorites with them, right? I don't know where to begin.
Miles
What do you want to tell us about Vitals, for example,
Diane
Vitals has, you know, it's funny, you mentioned that because I actually had COVID, about seven months ago as a triple threat. So fundraising during COVID we launched during COVID. And I caught COVID (unintelligble). For me, I was hospitalized a month and a half. I couldn't breathe Miles.
Miles
Oh, no.
Diane
And I was bedridden. And I've been sick before. But COVID was another level. Even to this day, I still have these long term effects. I'm a long term hauler. Everything tastes like cigarettes, and it's really musky and moldy. But it's getting better. So and then we invested in COVID. So it was a triple brand. And so Vitals was one of those COVID related companies. And, you know, it would have been very helpful at the time I had it. And so badass has gotten to be extremely successful, as you know, with a pandemic mentality.
Miles
Yeah, tell us more about the product.
Diane
So Vitals is a patch, basically, it's goes right into your near the heartbeat under your chest. And basically, this was all much earlier in the pandemic, time. And so a lot of everything was going virtual, we weren't really doing zoom at that time as much as we are now. But basically, you can connect with the doctor, like, for example, when I went to the ER, I went when it was really bad. But if you didn't know when to go into the ER, you could use this device to connect with your family doctor, your immediate doctor and tell them symptoms. And then they or if you had COVID, and you went in the hospital and they wanted to follow up with you. Everything is could be communicated through this device called Vitals. So we'll be sending them all the information.
Miles
Yeah, that sounds extremely important. Now more than ever. Yeah. I'm curious to hear more about your work with universities. You did the Rice Angel network, and now you're doing even more with universities?
Diane
Yeah. So just with my track record with universities, I actually now advise many funds on launching funds and strategies to launch funds and work with actually over eight universities now on and I think the network that I'm building is where it's going to be a great network. And now we have opportunity to co invest across over eight universities. And that's only been within the past year, and I hope continue going on across the nation. And my again, my passion is really what can we do to empower more diverse woman investors to the top executive levels, and I think through this network not only we have access to talent, and innovation, but we'll have access to them into really strategic positions.
Miles
Do you consider this diversity and inclusion passion? Do you consider that your mission?
Diane
I do, it's definitely called in what I would call my zone of genius, because it's something that I've lived, much like I've lived through COVID. And I understand the pain points of it. And I see the great advantages of being a woman, entrepreneur in this industry.
Miles
When did you realize this was your mission?
Diane
You know, I would say I've always had, to be honest, a passion for being speaking out for underserved communities way before I was an entrepreneur. And that that dates back to over a decade ago. Today, I even have a national media platform that focuses just on that Miles. To propel Asian American, female leadership voices. And we're not talking about any leadership, trailblazers, and a woman that has broken through glass ceilings. And on our national media club, we have podcasts that are known that we asked him what, you know, a lot of the similar questions and one common denominator Miles, is that we asked them, you know, who do you admire in your industry that's gone before you. And what I hear consistently is there's been none. There's, we need to get more stories out there. I'm very passionate about getting more woman in diversity representation, and what we can do to trick them into, you know, key executive decision making positions, and then through our media platform highlighting some great stories.
Miles
Are there people that you see as trailblazers for you?
Diane
Absolutely. Where do I begin? You know what one of them is not even in the VC world itself? Her name is called Mickey. And I don't know if you watch the Parasite movie is a very famous movie that came out in Korea. Well,
Miles
I have to admit, I didn't finish it. But I did start it.
Diane
So she, to me really epitomizes a magnet in Korea, and has made paved the way for artists to, you know, a mogul, a monument mogul in South Korea for entertainment, launching generation of filmmakers to artists to create really just a cultural global phenomenon. She's my Asian woman inspiration.
Miles
That's wonderful. What messages do you want Asian women to hear aside from these stories? Are there any practical advice type messages you want them to hear?
Diane
Specific to...
Miles
you we're talking about this media platform and how you want to get out these stories? Is it mainly about inspiration? Or are there practical things that you want people to learn?
Diane
Yeah, it was mainly inspirational. I think, to be honest, I am saddened by the sudden rise in all this Asian crime and living in Houston and New York, in the streets of New York, and I am scared to go out at night. So it hits me personally, that, you know, a 30 year old woman was stabbed in the back for no reason, just walking down the street, there is a 36 year old man. And there used to be elderly, it's anyone anyone be, you know, in the hands of an unfortunate situation walking down the street. You know, if you look up and you say Hi, like in Texas, you say Hi with your eyes, or even wave. If you did that wrong here in New York, a man got stabbed and almost killed. And I think the rapid rise in this Asian (unintelligible) is something that is really prevalent to a wider platform is out there. And what can we do to really represent and the stories inspire, you know, the good mission in their successful traits to why these women have achieved such success. And a large part of it is because of they the way they grew up culturally, and how being Asian American has created some great advantages to their success. So these are stories I hope to hear more, and maybe even create a movement. In light of all this Asian hate crime unfortunately,
Miles
So you've talked about the inspiration for Asian American women? What messages do you have for others, about diversity inclusion?
Diane
Absolutely. You know, to be honest, I think our communities can learn from each other. When I see, for example, the black community Hispanic community have been very successful for example they have if something happens, you know, they have very strong networks have activists at the front, you know. And so we have a lot to learn to be honest, I think the Asian American community as concrete a more powerful united front. Just seeing how, for example, the unfortunate events have unfolded with, you know, of course George Floyd in the black community and see what has happened with with all that post has been mildly incredible. And it's something that we can join together. More they understand, you know, what we're going through right now with these hate crimes, and it's something that no one should ever stand for. And I think we should join together as communities, and what we've learned, and how they've come to solutions. I think it's an incredible, mighty opportunity to come together.
Miles
What do you think is least understood? Or what do most people misunderstand about venture capital and starting a venture capital firm?
Diane
Great question. Well, you know, it is a startup itself. Many people think they, maybe as many entrepreneurs may think very lofty, right? Oh, my God, you know, I can get it done. And I'm actually helped a lot of VC funds with, you know, that want to get up and going. But you really need to have a lot of key attributes and started using and in a deep Rolodex, or deep network, a really great reputation. As you continue to go out there and fundraise and be able to say that, you know, as an entrepreneur, you're going to be told no more, more than you hear. Yes. Right. So I would suggest, if you're starting a VC, have really clear cut advantages on why and investors should come with you. And what have you built out in terms of branches that make you above the rest? And what industries are you going after, for example, I went after medical because I was able to secure you know, in Houston, we are known for the Medical Center, we use (unintelligible). And so really play to what you're passionate about and what you know, and create some really great advantages. Be really creative in your strategic alliance partnerships. And see what it can do. And also, what is so unique about your thesis in terms of geography, as well.
Miles
So you said part of the differentiation was partnering with the Medical Center in Houston. How did you do that deal? Sounds amazing.
Diane
Yeah, you know, I think it's all comes down to relationships, whether it be an entrepreneur, investor, it all comes down to having a great reputation, building a brand and having these relationships and a large part of it is You know, I know Martin Luther King has a really famous quote, and I might quote it wrong. But you know, you're known not for fame, but you're known for service. And I am 100% a component, you know, I believe in that. And so it's really about how have you built out your community service community, and helped, you know, build these relationships? And that's, I think, where it comes from?
Miles
What advice would you give to an aspiring founder?
Diane
Great question. Aspiring founder that has no experience before or has,
Miles
Yeah, early in their journey?
Diane
Yeah, I would say number one is really crucial to build as you build a high performing team, the right team. And for you, as you go up for funding, as a founder, to ensure that either, you know, the team looks very balanced, and you yourself have expertise and experience. For an investor to say this is this is, from an investment point of view, we look at the founder of your team, that's a big part of the vetting process. And so I would say, dig deep into your area of expertise, and also find how you can be disruptive as well. And then continue building on networks, more structured on the investor side with potentially for example, portfolio. You know, if you know, friends that are companies with VCs, and ask those introductions,
Miles
Do you have a book or a website or article you'd recommend to aspiring founders?
Diane
The Lean Startup is good. And I would say for VC, Venture Deals as always, you know, the one of the holy grails in VC industry. Those are some really two great books that I would recommend. There's a lot of books in VC. The Business of Venture Capital is another one as well. Yeah, there are definitely books that I lived and breathed while I started.
Miles
Yeah, great recommendations. Where can people follow you online?
Diane
Absolutely. You can go to my LinkedIn site, and I would love to chat with you there. I have a website, too, but you can find that all on LinkedIn.
Miles
Wonderful. Well, thanks so much for coming on.
Diane
Absolutely, Miles.Thank you for having me.