The interview below is part of a series from The McGuireWoods Emerging Manager Program featuring impressive emerging managers. The McGuireWoods Emerging Manager Program supports emerging managers throughout the most critical stages of a fund’s evolution. It offers a differentiated and proprietary approach to connecting emerging managers with limited partners, providing intelligence on market terms and preferences, and advising emerging managers on all components of building a durable brand as an investor. To recommend an emerging manager for a future interview, please email the team at [email protected].
Q: What led to the decision to raise your initial fund? What were the indicators you were ready?
Laurel Mintz: Given my 15-plus years as a marketing agency operator and corporate M&A attorney, if you had told me a year ago that I’d be launching a fund, I would have told you I thought you were crazy. Because of that legal and business background, so many of the private equity and venture firms had been coming to us for years to market them.
Last year, one of the general partners asked me to stay on a call and said to me point-blank, “I’ve never seen someone with better earlier deal flow — someone who is more mission-aligned and can actually control the narrative of the success of these brands because of your marketing background.” I responded: “Thank you very much. I’m very flattered, but you must be crazy.”
I then started researching and doing my homework on diversity in venture capital, or should I say the lack thereof. I couldn’t unsee what I saw. I thought, “If not me, who? If not now, when?” I know there are very few people with my background and experience in investing who could take on a project of this scale.
I also looked back on my marketing agency career and realized that, of the over 300 brands we’ve worked with, over 200 were diverse-led, and 40% of them had raised capital, so we had consistently seen the startup-to-raise-to-exit model. I knew building a fund would be a bigger and better way for us to impact these incredible founders.
The biggest indicator this would be successful came when I called my friend, Jesse Draper. I said, “Jesse, I think I’m going to launch a fund. What do you think?” Her actual response was, “Heck yeah, I’m in. Here’s a check, go raise a fund, and I’m sitting on your board.” That’s how Fabric started.
Q: How did you think about assembling your team?
LM: We had to be very intentional. I know very clearly the privilege I have being an operator and an investor starting out at such a young age, and I knew our board had to reflect the founders we were investing in. That’s why my first call was to Jawhara Tariq, whom I asked to be my principal. Like my friend Jesse, she was all in.
I then turned to our board of advisers and venture board, who also reflect the founders we invest in and who have a totally different and complementary skill set to mine. I hope I’m smart enough to know what I don’t know, but I am fortunate to have an incredible board of advisers who are the who’s who of private equity, public company CEOs and financial experts.
We also had to be conscious of staying lean as a small, first-time fund. We’re very lucky to be able to lean on my marketing agency to launch in a much bigger way than most fund 1s. It’s been such an honor and pleasure to assemble this team, and we’re excited about growing it in the future now that we’ve completed our first close.
Q: What were the most important considerations for you when choosing LPs to pursue for partnership?
LM: We are very intentional about ensuring our investors are aligned with our bigger mission. This means it has taken us a little more time because not everyone understands the model of investing in diversity as a strategy. Luckily, I have a massive database and audience and frankly incredible community that I’ve surrounded myself with over the past 15-plus years, and they very clearly believe in the model we’re building and have said so with their dollars. It will be interesting to see what happens next and how we can challenge the institutional investors to align as well.
Q: What did you consider and prioritize when developing an investment strategy for your initial fund?
LM: I had a moment of clarity in the shower, because that’s where you have your best ideas. I thought to myself that if I can use the listening software we have been using on the agency side, I can pre-vet and de-risk our portfolio company picks. This software shows us if the companies’ numbers are real or fabricated and how far they are from their direct and aspirational competitors in their space, which should tell us if our check is going to meaningfully close that gap.
We are in a unique position to have marketing expertise and early founder access as our differentiators. We’re looking for companies with strong foundations and strong founding teams that need support scaling up their marketing efforts and/or visibility in their verticals. We are able to focus pretty clearly on investing not only with a diverse lens, but also with a category focus where we have expertise. We are double-clicking into what we know, which is consumer, consumer tech and the future of categories. We feel strongly that this diverse approach and narrowed thesis focus with a bend toward scaling marketing is what’s going to make our portfolio companies winners in the long run.
Q: With emerging manager programs on the rise, what do you foresee with respect to LPs’ willingness to invest with emerging managers?
LM: My personal experience is that banks and other institutions that say they want to support emerging managers won’t touch a fund under $100 million. Unless you are a spinoff of a larger fund or have a large lead investor, that’s just not realistic. I hope this will change, but unfortunately, the numbers haven’t moved even with those programs in place. The best thing a fund like mine can do is be bullish on thesis and tap into our vast networks, and be hungry but not thirsty about raising the right kind of fund from the right kind of investors.
Q: Recognizing the complexities in raising a first-time fund, what are some teachable moments you have encountered along the way?
LM: As I said above, being hungry but not thirsty. When I started raising, I was a little thirsty, and people could smell it. But when I realized raising a fund was just marketing by another name, I thought, “I know how to do that. I was born to do that.” Such a mental shift was everything, and we started closing LPs left and right. It really is about attracting the right investors. If you’re doing your job consistently, they will come.
Q: What advice would you give to someone raising a fund for the first time?
LM: Being human and relatable is the best piece of advice I could give. I used to get on calls and pitch to the deck, and I could see people’s eyes glaze over even though the deck was great. For a first-time fund manager, they are buying you, so building a personal connection over time is really the key to success.
About Laurel Mintz
Laurel Mintz is the general partner for Fabric Capital Advisors. With a J.D. and MBA from Rutgers University and more than 13 years running an award-winning marketing agency, Mintz is uniquely positioned to lead a fund like Fabric. She has worked with more than 200 companies in the consumer packaged-goods and technology spaces, from startups to blue-chip global brands like Facebook, Verizon Digital Media, Geico, PAW Patrol and Zendesk. Her board-of-directors work and extraordinarily networked presence with organizations like Women Founders Network, Los Angeles Venture Association, Reuters and Women’s Business Enterprise National Council provide no shortage of relevant deal flow.