Changing the Venture Capital Diversity Equation

Miriam Rivera sitting on couch looking out a window.

Miriam Rivera’s desk at Ulu Ventures is located up a narrow, winding staircase, in a quaint Victorian house on a side street in Palo Alto. Shared with the rest of the small team, the office is used for meetings, making coffee, and getting things done. Ulu doesn’t match the popular image of Silicon Valley venture capital firms. Like its co-founders Rivera and her husband, Clint Korver, the business is understated and welcoming. And successful.

Founded in 2009, Ulu’s first fund is a 5x multiplier — industry shorthand for returning five times the initial investment. That’s almost twice the industry standard for top- decile performance. Yet, counter to typical venture funding, the two best exits so far — Krux sold to Salesforce for $700 million and Blue River Technology sold to John Deere for over $300 million — were both founded by Latino entrepreneurs. “We’re not sacrificing anything by investing in women and minorities,” says Rivera, JD/MBA ’95 (BA ’86, MA ’89). “Our ability to look at startups objectively and pick the ones with great potential makes us a top-performing fund.”

The trick to their success is a formula combining the personal and business. Rivera has seen firsthand the challenges facing women and minorities, discrimination sometimes overt though often subtle. With the combination of their deep experience and their personal conviction to give everyone a fair shot, they set out to do things differently.

Korver explains that when he and Rivera were looking into co-founding Ulu, they were determined to get the best out of each other while not straining their marriage. So, they came up with a data-driven decision making process, with clear risk/return criteria, to standardize the way that they assess all potential investments. The aim is to mitigate bias, but the process also serves as a learning tool — with decisions documented so they can compare their expectations about the companies they fund with results.

“We’re not sacrificing anything by investing in women and minorities. Our ability to look at startups objectively and pick the ones with great potential makes us a top-performing fund.”
– Miriam Rivera, JD/MBA ’ 95 (BA ’86, MA ’89)

“I think the vast majority of venture capital investments are the result of gut feel and pattern matching,” says Korver (MS ’90, PhD ’94). “I’d be surprised if even 5 percent use a disciplined process for measuring risk or surfacing potential bias.” The result: Minorities and women who might never get to a meeting with a VC are finding success with Ulu. And Ulu, in turn, doesn’t miss an opportunity to invest in a good idea.

Today, Ulu has one of the most diverse portfolios of entrepreneurs in Silicon Valley, with 38 percent women, 29 percent minority, and 19 percent immigrant CEOs. (Fund I had 9 percent underrepresented minority CEOs, and Rivera expects to see similar numbers in Fund II.) And when co-founders are added to the equation, the diversity numbers are significantly higher in all categories, she adds.

“I fell into venture almost accidentally, but once I started I could see that it is a way to make a difference not just on returns but much more broadly,” says Rivera.

With diversity often more of a catch phrase than a reality in Silicon Valley, Ulu stands out. When minorities and women in the Stanford community have a startup idea, Rivera is at the top of their list of VCs to talk to. A former Google vice president and deputy general counsel with deep experience in the tech world, she has opened a number of doors for herself over the course of her career. Today, as a successful venture capitalist, she’s opening doors for others.

AS A NEW LAWYER STARTING OUT, RIVERA LANDED ON a great team at Brobeck, Phleger & Harrison—an unusually diverse one, too. Rivera worked for “a great partner,” Tom Kellerman, and learned many of the skills that would propel her to the top of the legal and business professions.

“Most lawyers go straight through from undergraduate to law school and have to learn a lot when they get here. Miriam wasn’t like that. It was her first legal job, but she was highly professional from day one—knew how to deal with the partners, secretaries, and clients. And she could already write a good argument. Plus, she’s a lovely person,” says Kellerman, now a partner at Morgan Lewis.

It was during this time that Rivera also came face to face with the culture that can hold many women and minorities back—over lunch with a white male partner and associate.

“The partner was talking about his hobbies, golf and trap shooting, which neither of us did. By the end of lunch he had invited the white male associate to try trap shooting—in my presence, without including me— even though I was bold enough to say ‘I’d love to try that too.’ That was the first time I saw, very clearly, how the social exclusion of women and minorities can lock you out of developing relationships with people who may be influential to your career and your success at a firm,” she says.

Since that time, Rivera has not only become an example for others, she has also become vocal about diversity in tech—speaking at events and weighing in with op-eds in popular media. A 2016 Huffington Post piece by Rivera focused on diversity in corporate leadership—and the need to break the logjam by improving early education and creating a pipeline to college and to careers. This is something she knows well.

“I had really gifted teachers, ones who demonstrated caring toward me and the other students. And those teachers were in the worst public school district of Chicago—probably the country,” she says. One teacher spoke with Rivera’s mother about applying for a scholarship to send her daughter to Phillips Exeter Academy. Rivera’s mom, originally from Puerto Rico, was a migrant farm worker on the East Coast before moving to Chicago where she’d worked in factory jobs. Money was tight, but she understood the importance of encouraging Rivera’s academic strengths and heeded the teacher’s advice.

Rivera recalls feeling like the character in the movie The Brother from Another Planet when she arrived at the exclusive boarding school in New Hampshire. “I remember everyone was dressed in LL Bean and wore duck shoes. I was thinking ‘what are those ugly shoes!’ But there I was, looking like I had just stepped out of a disco, in a black three-piece polyester suit and big hair. I was very urban, very Saturday Night Fever,” she recalls.

But she settled in, excelled academically and formed lifelong friendships at Exeter, at the Latin School of Chicago where she finished high school, and at Stanford where she went for her undergraduate studies in sociology and stayed for three advanced degrees. “I found my people in these high-achieving academic environments, people I really fit in with, who have been and still are meaningful parts of my life,” she says.

Korver remembers the first time he met Rivera. He was working on his PhD in engineering at Stanford and was researching the value of information in negotiations for his dissertation. So he took a class on the subject at the GSB. Rivera was his classmate and they wound up paired for a practice negotiation—she was the police chief trying to get a good salary deal for the union and he was the mayor trying to hold the line.

“When we finished, I thought I had been a bit tough but had gotten the better deal. Well, the assessments came back and Miriam wound up the top-scoring negotiator of all the police chiefs in the class and I was the worst mayor. She cleaned my clock and made me think I had done well,” says Korver. The experience made him want to get to know Rivera better and be on the same side in any negotiation.

“That was the first time I saw, very clearly, how the social exclusion of women and minorities can lock you out of developing relationships with people who may be influential to your career and your success at a firm.”
– Miriam Rivera, JD/MBA ’ 95 (BA ’86, MA ’89)

For Rivera, creative negotiations and people skills became a hallmark of her career—particularly at Google.

After graduating, she and Korver married, just in time to catch some of the excitement of the tech boom of that time. Following a short stint in legal practice, Rivera and Korver cofounded a company called Outcome Software, though she stayed only two years because a funder balked at a husband and wife team. “I was fired!” she says, laughing. But in retrospect, her next job was good preparation for the opportunity at Google. Trying to make the right next step, she met with Gabriel Sandoval (BA ’93), general counsel at Ariba, Inc., for an informational interview. People are important to Rivera and Sandoval impressed her—particularly as he was already the GC of a public company and still in his 30s. “I wanted inspiration and he was an inspiring person,” she says. Sandoval was equally impressed with Rivera, and he offered her a job.

It was a busy time with the emerging enterprise software company growing fast when Rivera joined. But within a year, the tech bubble burst and Ariba began letting people go. With Korver working on a startup and a mortgage to pay, Rivera started to look for other options.

“We had to let a lot of people go, but Miriam was not one of them. But when she told me she had the opportunity to join a startup, I encouraged her to take the job. Being one of the first hires in the legal department would offer her more opportunity than I could,” says Sandoval.

“I had seen so many software companies hit hard by the downturn and thought that the internet was the way the market might be headed,” she says. “Starting at the ground floor of an opportunity has risks, but also benefits.” That startup was Google.

RIVERA JOINED GOOGLE IN 2001 AS THE YOUNG COMPANY’S second lawyer. Over the course of her five years there, its growth was explosive. As Google grew, Rivera got creative with her job—rethinking how to execute contracts so that legal didn’t “throw up unnecessary speed bumps,” she says. “I wanted legal to be a partner with the deals organization.”

To do that, she developed a contract simplification system she calls revenue velocity, cutting the time in which the vast majority of deals were signed to within three days— and within one day for half of them.

“I looked at how to balance legal and business risks, and we determined that we were willing to take some risks in order to accelerate revenue,” she explains. During her time there, she was responsible for $14 billion of revenue for the company. She also helped to create the self-service advertising business model and the advertising syndication business model. “It was fascinating to be in a legal department where the work of the company changed the state of copyright.”

Rivera left Google in 2006—despite the chance to take on the GC role. She was exhausted. Instead of jumping right into the next thing, she took time off to rest and reset—to spend time with her family and to think through her next move. Part of that time was spent in Hawaii, the tropical paradise close to Rivera’s heart because of its similarities to Puerto Rico.

HAWAIIAN FOR “TO GROW AND INSPIRE,” ULU is part name and part aspiration. It’s also inspiring a flock of entrepreneurs, with 2,000 new ideas floated by the small VC company each year.

When asked whether she might consider a next step after the success of Ulu, perhaps running for political office, Rivera says no. While she is active in her community and has volunteered often, particularly at Stanford where she was recently a member of the board of trustees, she sees a big need to fill right where she is. And, she observes, there are already many more women and minorities in government and public service than in her area.

“We haven’t really penetrated the private sector. Look at the boards and CEOs of the Fortune 500 companies and you quickly realize that we’re not making much progress. So I’m excited to help open doors in those areas. It’s amazing what a company can do—look at Google and how quickly it grew to be an international game changer in just a few years. The companies that I fund have an opportunity to do that. And we’re doing it with a more diverse group of people than is typical in Silicon Valley. I want to keep making a difference in this sector.” SL

(Reprint from November 16, 2017 feature by Sharon Driscoll, Stanford Law School — Issue 97/ In Focus)

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Rusty Dornin
Rusty Dornin is the director of marketing and communications for Ulu Ventures. An award-winning radio and television journalist, she was a CNN correspondent for nearly 18 years covering domestic and world news ranging from war to natural disasters and tales of crime and politics.
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