When Laela Sturdy first visited Stanford, it was not appropriate to study at the famous university’s business school. It should beat Stanford in its own game – literally.
Since the No. 16 seed in the annual NCAA tournament in 1998, the thought of Sturdy’s Harvard team scoring a win over No. 1 seeded Stanford on its home court was virtually unimaginable. But to everyone’s surprise, Harvard won 71-67, marking the first time in college basketball history, for both men and women, that a 16-seed beat a 1-seed. It didn’t happen again until 2018.
Today, this Harvard victory is considered one of the greatest surprises in sports history.
More than 20 years later, as an investment partner at CapitalG, Alphabet’s investment arm in the growth phase, Sturdy disrupts expectations of how one of the world’s leading investors should look and act.
Her investments include 10 companies valued at more than $ 1 billion, including at least one of the most anticipated public offerings of 2021. She led the company’s investment in UiPath, a company that makes office work automation software. In February, $ 750 million was raised on a valuation of $ 35 billion. On Friday it was announced that the registration would go public. It has over 80% annual sales growth, positive cash flow and rapidly declining losses – a perfect recipe for hot tech IPOs in recent years. She has also seen bursting reviews from portfolio companies like Stripe, DuoLingo, Gusto, and Unqork, and led an investment in Credit Karma, which Inuit bought for $ 8.1 billion in December.
“Laela is the best kept secret right now,” CapitalG founder and CEO David Lawee told CNBC. “Now all of her investments are coming to fruition and she is just getting started.”
See the court
Unlike early stage investors, who can place lots of small bets and hope that some big wins will pay for the losers, growth stage investors have fewer chances and need more hits. Robust has done well in this environment.
Sturdy’s specialty is seeing opportunities before they even come, her colleagues said.
“‘See the court,’ as they say in basketball,” remarked Sturdy.
Sturdy’s first investment in a business serving businesses was in Stripe. She co-headed a 2016 funding round that saw the payment technology company valued at just under $ 10 billion that some people were scratching their heads about at the time.
Fast forward to today and the company recently raised a $ 600 million round of funding valued at $ 95 billion. This makes it the most valuable US start-up.
Sturdy also recognized the trend of no- and low-code programming, which can make software development cheaper and easier, and which is getting hotter with corporate and app developers. A recent study by Gartner found that 65% of all app developments in 2024 will use low- or no-code methods.
That interest led her to Unqork, which offers no-code products that “change the way software is written”. The three-year company, valued at $ 2 billion, had a choice of investors for its Series B in 2019. and went with Sturdy to lead the investment, said CEO Gary Hoberman.
This is partly because Sturdy was able to identify opportunities in industries that others did not, such as public sector customers.
“There have been investors trying to fit into a pattern that they had seen before, but Laela was really open to exploring and seeing what our platform could be like in different industries,” said Hoberman.
Hoberman According to the company, sales have tripled in the past three years.
CapitalG partner Laela Sturdy is well on the way to becoming one of the biggest investors of the year.
Photos courtesy of Laela Sturdy
“I think it’s great that when you invest, you have to go back and forth between the details and that really big picture,” said Sturdy.
Sturdy remembered her experiences in basketball.
“I never liked basketball,” she said. “I was always the one who got off the script. I think I relied more on intuition.”
But through her familiarity with the engineering culture, she can also see whose talent can actually be scaled.
“If you really want to hire the people who are going to run the business in three years, you have to convince them to get in three years before they really should,” she says.
Sturdy also said she asked the company’s vice presidents what other jobs the engineers are considering to assess their talent quality. “I think it says a lot,” she said. “The strength of the Stripe engineering team, for example – the caliber at every level is just incredible.”
Channel the outsider
Despite her big wins, Sturdy has no plans to give up her underdog status, she said. After all, it was a big and surprising bet for Google.
Sturdy joined Google in 2007 in a strategy and marketing role and later switched to a sales role. Google had just bought YouTube and was wondering how it would sell multiple products and evolve beyond a search company. In 2010, Sturdy began running Google’s emerging businesses, overseeing the growth of new ads and commercial products like Adwords Express and Google Offers. She was tasked with hiring several hundred people in about six months, she said.
“It was a fun business problem for me,” said Sturdy. “I had to take on a lot of leadership roles that I wasn’t particularly qualified for, but I could get in and work hard.”
Robust caught the attention of David Lawee, a longtime Google veteran who formed a growing investment arm known at the time as Google Capital – now CapitalG.
“My goal is to know who all the stars are on Google, and Laela’s name has come up a lot,” said Lawee. “It came from people I trusted, like Claire Johnson, Sheryl Sandberg – some of the most successful women in Silicon Valley in the last decade.”
Lawee brought her to the team despite a lack of investment experience.
“It was a relatively big bet, so you want to bet that they’re at least as good as the other people in the company,” Lawee said. “The core bet at CapitalG was to create a more cultural, collaborative environment than other companies, and Laela fits in all dimensions.”
People are often first drawn to their personality, which Lawee described as charismatic and disarming.
“You may be exposed to EQ first, but you will also be exposed to IQ,” he said. “She is always someone who contributes to a process and who reveals herself again and again the more you get to know her.”
Her humility contrasts with the bravery that is so common among Silicon Valley investors, according to investors who worked with her.
“She doesn’t say, ‘You should do that – she says,’ Let me show you what others have done,” said Hoberman. “She will actually let us explore and find our way.”
Although Sturdy’s co-workers think she could be more cocky given her track record, she knows better.
By the time she got to Harvard, Sturdy felt out of place in Florida, she said. As the daughter of immigrant parents, she learned as much as possible, graduated with a degree in biochemistry – and learned about the cold weather in the northeast.
She remembered a friend at Harvard who made fun of her for wearing socks that weren’t usually suitable for the weather.
“I just remember looking around and saying, ‘I think some other people here may have been a little better prepared than me,” said Sturdy. “But I don’t spend that much time in this room – I just think I’m going to cut my ass off.”
She says one of the main reasons she found courage as an outsider is her experience as a lesbian before she was widely accepted in society. “I had to dig really deep to reconcile what I thought was my truth with a lot of noise,” she said.
She incorporated this outsider mentality into her transition from operator to investor as well as into the investments she favored.
“One thing I’ve learned is these massive market opportunities – don’t underestimate them,” Sturdy said. “It’s sometimes harder to believe that a core business could grow 20x or 50x. You start to say, ‘Oh, they can add that and that’s how it comes to dreamland’ when the reality is that some of these Markets are so big The core business can grow fast, which is really exciting. “
For example, the language learning company Duolingo 2015 didn’t exactly fit the profile of a competitive growth fund. Realizing Duolingo’s popularity with customers, the CapitalG team knew the co-founder from previous relationships with Google, but weren’t sure if this was the case for a growing company, it made sense to invest in a company that was still before sales.
After tormenting himself about it, Sturdy called, Lawee said.
Sturdy reached out to Luis Von Ahn, CEO of Duolingo, and convinced him to adopt a monetization model that generates revenue without compromising his desire to keep language classes accessible. “We just wanted to keep raising capital,” he said. “Laela showed us how making money can support more accessible features and reach more users.”
Duolingo reportedly had sales of more than $ 180 million in 2020.
The head and the heart
Robust also checks whether companies live up to their stated values. Peers describe that Sturdy has both heart and skill, which they consider a rarity in the VC industry.
“I would say the value Laela provided was significantly higher than the money anyone provided.”“” Duolingos Von Ahn said. “I can have a drink with her and be honest with her when I have a problem or when something doesn’t work.”
While Duolingo has increased its users roughly tenfold since Sturdy invested, the majority of its users are still learning for free – a feature he and Sturdy agreed upon was important.
“Often times, investors don’t think too much about it – they just say, ‘I’m investing and you make me money and that’s all great,’ while they really want to go into detail and know exactly how we’re ‘I’m helping the world,” Von said Ahn.
“I firmly believe that your business monetization model should never conflict with any other value-based goal,” said Sturdy. “How does monetization improve everyone’s satisfaction – employees and users?”
That focus on values is also a welcome trait for engineer-run companies like Stripe and Unqork.
“You don’t really sell to developers, you win the hearts of developers and then developers tell their friends what infrastructure they like to use,” said Sturdy. “You’re not going to send a guy there with a sales bag to try and sell it.”
According to the founders, Sturdy’s charisma is also evident in their killer speeches to employees at all-hands meetings.
“When she presents, she passionately presents the belief in our vision and celebrates our success like a teammate,” said Hoberman. “The employees feel it and believe it.”