Using ‘superpower,’ investor aims to make global impact and expand women’s influence

Renata Aráuz-DeStefano is an investor at Pivotal Ventures. Founded by Melinda French Gates, Pivotal is a group of organizations accelerating social progress through high-impact investments, philanthropy, partnerships, and advocacy, to get more power in the hands of more people—especially women—in the U.S. and around the world. 

Renata sat down with Carta to share insights learned along her journey to venture, advice for early career investors, and how impact investing can be a lever for change.  

CARTA: Tell us about your career path: What led you to venture capital, and to Pivotal specifically? 

​RENATA ARÁUZ-DESTEFANO: My early career path was born from a curiosity about financial services, and specifically how financial tools could be used for broader social impact. I studied International Relations and French, so I was by no means an expert coming out of undergrad. In fact, I don’t think I even knew what venture capital was when I was in college. 

But I’d spent a lot of time throughout my childhood in Ecuador. And coming back and forth to the U.S., seeing these very different environments, made me curious about how it all worked together, and how financial decisions were made.

So I started my career in microfinance. I was really interested in using capital to help scale businesses, and in turn fuel regional development. I started doing that work first in Latin America and then Southern Africa, and the check sizes ranged but were pretty small compared to those I'm writing today. Anywhere from $50, to maybe $500, to $1,000. 

A couple years into that, I started hearing about this new thing called impact investing. I was curious about the sort of impact larger businesses could have in their countries and in their regions. That interest led me to come back to the U.S. for business school. I did my MBA at Wharton and was hoping to pivot into an investing role, but given my background, again, very small check sizes, I was advised to go into investment banking first. The industry has shifted a lot in the decade since, but at that time there was very much a set pathway into venture and that included banking experience. 

So I went to Bank of America Merrill Lynch in New York for a few years, and then used that as a launchpad for my VC career. My first venture job was in Nairobi; I joined a firm called KawiSafi Ventures. I invested in the climate sustainability space with a focus on Eastern Africa, which was very niche, but a great experience. 

A few years later, I came back to the U.S. and was connected with Pivotal, which really checked all my boxes for impact-driven, mission-aligned funds. Although I was moving from a climate-focused fund to a gender-focused platform, both were very aligned with my core beliefs. I was excited to join Pivotal almost four years ago, and I've been with the firm since, based here in D.C.

We are a group of organizations founded by Melinda French Gates a decade ago to accelerate social progress here in the U.S. and have recently expanded globally as well. We pull different levers and use different forms of capital across policy and advocacy, philanthropy, and venture. I’m on the investments team, and we primarily deploy capital to VC funds and Series A and B startups that uplift women’s power and influence. 

What is it like investing for impact, within the context of a larger organization working toward the same goal but with different tactics? 

In many ways it's our superpower. We are able to share opportunities across teams. Regardless of whether it's a nonprofit raising money or a company, there's someone at Pivotal who can take a look. Not to say that everything that comes across our desk will get capital from us, but we are set up in a way that allows us to meet the needs of different types of entities. 

For example, we’re addressing the caretaking gap in this country. Our team on the philanthropic side has deployed grant capital to address care gaps. And then there's a colleague of mine on the investment side who is leading the direct strategy for investing in the care economy, and she's looking at market-rate investment opportunities in the space. We understand that to solve these social problems, you need different tools in your toolkit and different types of capital, even within the same sector, such as care and caregiving. 

I would say at least once a week I'm getting an opportunity and sending it to a colleague or vice versa. We're all marching toward the same end goal and the same north star of expanding women's power and influence, but we also understand that we each have different types of capital and different types of resources at our disposal to make that happen.

Looking back at the last few years, are there certain highlights that stick out? Certain times you’ve seen the mission in action that you’re particularly proud of? 

So many moments. I feel lucky to do this work. I'll share an example that is an initiative funded through the program team at Pivotal, which is our philanthropic arm. We've had the privilege of partnering with Recast Capital, providing grant capital in order to help them launch programs that help emerging fund managers just starting their VC funds. 

When I'm out in the field at conferences and meeting people, I'm constantly hearing great feedback about the Recast programming, and it's so rewarding. Although it was the philanthropy team, not my team, so they deserve the credit there, it’s great knowing that we had the flexibility to do that. And then my team is able to reap those benefits, because we're seeing fund managers who've gone through the program, who've received that training and capital, and are then able to better position themselves in the market. 

Pivotal’s approach includes “rethinking due diligence” to invest in firms others might be missing out on. What does that look like? 

There are a few key ways our process is different than that of other LPs.  

One, and this starts before diligence, really, but we make ourselves very accessible. Sometimes LPs prefer anonymity, and we're pushing against that by making it easy for folks to find us. We are traveling constantly, we're on panels, we're speaking to folks, and we're trying to get our brand out there and make it easy for emerging managers to find us. I make an effort to reply to cold LinkedIn inbounds, as much as I can. That accessibility and expanding our top of the funnel is a big part of how we approach things differently. If you meet our gating criteria, if you're a woman-led or co-led venture fund raising in the U.S. and investing domestically, we want to meet with you. 

And then number two is having a holistic approach in terms of what criteria we need before we invest. One example is AUM (assets under management). Typically, we like to see $25 million AUM and up as a target fund size. Which is different from a lot of LPs—and this is by no means a critique of them—but just given their mandate, they have to write certain size checks, so they only evaluate larger funds. We're flexible on the check sizes that we write, which allows us to look at funds that are a bit smaller and that opens doors for folks that might not meet the criteria for some traditional institutional investors. 

And finally, I would say we're holistic in our evaluation of potential fund managers. We're not looking to check a certain set of boxes. There's no blueprint, must have gone to XYZ school or must have worked at XYZ firm. We are looking at the opportunity, the investor, the portfolio construction model, and considering all of those things through a lens of how these managers' experiences, whether as an operator or an investor, set that person up for success. How are they going to source deals, win deals, add value to their portfolio companies, and so on. We’re open to that varying from fund to fund. They do not all have to have that similar pedigree, per se.

>> Download the latest VC Fund Performance report for industry benchmarks.

What are some investments you’re especially proud of? 

One is a firm called Angaza that I invested in while I was at KawiSafi Ventures in Nairobi. This was at my first VC job and it was one of my first deals. And aside from the huge market opportunity that I saw with the company, I was personally, emotionally invested, because I had to advocate for the investment internally with my team. As a junior investment professional, it is an incredibly important learning experience to sell the company to your team before you sell it to an IC [investment committee].

That was a huge learning opportunity, and meant a lot to me. And I was also really excited to be able to help bring the first woman-led company into our portfolio. At the time, all the CEOs of our portfolio companies were men. So that was very exciting, and a deal that I'm proud of in terms of what it meant for me and what it meant for that portfolio. 

And then fast-forwarding to my time at Pivotal, a fund that stands out is Vesey Ventures.  And similarly, this is one of my first deals at Pivotal, and I still remember the energy that me and my manager shared after that first call. It was an intro call: “Tell us the vision, What's the mandate? Where are you investing?” But we immediately found them very compelling. And this was now almost three years ago. It's been incredible to partner with them and see them build something from scratch. 

Was there a mentor, early in your career, who made an impact on your life? 

Definitely. I've been very fortunate to have multiple mentors throughout my career, both formal and informal. Even right now, I’m working with a mentor. I’m a huge believer in having a growth mentality—there's always more to learn. Currently, I'm in the Kauffman Fellows and have an awesome mentor who I've been working with as part of that program. 

But as far as earlier in my career, the person that comes to mind was one of my early managers in my first role in microfinance. What she showed me, by being a leader in the space, managing a team of primarily male mid-level managers, was the importance of taking up space, claiming your space, and not being afraid to lean into that power. 

I was fresh out of college, tagging along, but she always made space for me. She would make sure there was a seat for me at the conference room table. And at that time in my career, that was, well, a huge surprise. Early in our career, we can struggle with these questions of like, do I sit there? Is that space for me? Is someone else supposed to be sitting there? But she made space for me. 

That's something that I've carried with me up until now, and I always think about it as I advance in my career. Who am I making a seat for? Who am I making sure is coming up behind me and able to access those same tables?

>> See Carta's Annual Equity report for race and gender data in VC.

What advice would you give to someone looking to break into venture capital now?

Something I’ve heard time and time again, that I think still rings true, is to start building relationships before you need them. And that’s true whether you're an undergraduate student or even whether you're a GP raising a fund. Relationships are not meant to be transactional. They take time to develop. I’d say start early, months early if you can. Schedule those informational interviews, the coffee chats, the more casual things before you need “the ask.” The first interaction shouldn't be, “Hey, I'm looking for a job,” or, “Hey, I'm trying to raise a million dollars.” It should be focused on the relationship first. And folks appreciate the opportunity to get to know you over time.  

It’s especially important for venture. Because if you're coming out of, for example, a business school program, the consulting firms and big banks, they have very seasonal hiring processes. They hire a cohort at the same time every year. It's very standardized. Venture's not like that. Venture opportunities, job openings, will pop up randomly, typically when a fund has achieved a close. But it's harder to track. It's not like, oh, in September all the VC jobs will open. Therefore it's especially important to cultivate those relationships early on, keep them warm, and make sure you're staying top of mind. So if and when an opportunity arises, they'll know who to send it to.

What’s a common misconception about venture capital?

People falsely believe it’s impossible to break into VC. People think, if they're not coming to my campus to recruit, if they're not hiring a cohort, if they're not having huge training programs like a Bank of America or a Goldman, then that means I'm not going to be able to get in. And I encourage folks to challenge that assumption. Yes, it's super competitive, just like securing a job at Bank of America or in a consulting firm is competitive. But I would encourage folks to not take that lack of clarity or lack of a clear standardized process as a sign that it's an impossible endeavor to try to get a role in a VC firm.

Is there anything else that you'd like to impart to readers?

When trying to break into venture, it’s good to be very clear on your dream role and end goal, but it’s also important to keep an open-mind on what that path looks like. Be flexible on the steps needed to get there, whether it's an internship, being a venture scout, or working for an accelerator. Traditionally it was that you have to go to investment banking first. But that's shifted and that's a wonderful thing. 

Think creatively about what your first step and maybe also second step looks like. And understand that over time those steps are getting you closer to your end goal.