Raising Venture Capital in 2024 with Julie Krieger from Pari Passu Ventures

Julia Krieger, managing partner at Pari Passu Ventures, has had an impressive career journey from Insight Partners to founding Village Luxe, and now leading a unique venture capital firm. In this candid conversation, she shares her insights on the evolving venture capital landscape, the importance of diverse perspectives, and the strategies that drive successful investments.

Julia’s Time at Insight Partners

Julia started her career at Insight Partners, a venture capital firm where she was responsible for investing over $100 million in Marketplace and SaaS companies globally. During her tenure, she had the flexibility to explore various markets, including Eastern Europe. Reflecting on her time there, Julia emphasized the innovative approach Insight took by empowering their analyst and associate class to drive deal flow, a model that many funds have since adopted. This experience laid a solid foundation for her entrepreneurial and venture capital endeavors.

Building Village Luxe: A Sharing Economy Marketplace

After leaving Insight Partners, Julia founded Village Luxe, a peer-to-peer luxury fashion rental platform. Drawing inspiration from the sharing economy models of Airbnb and Uber, Village Luxe aimed to unlock the potential of luxury fashion by allowing women to rent items from each other. Despite the initial success, the COVID-19 pandemic posed significant challenges, forcing Julia to pivot and eventually shut down the business. However, this journey taught her invaluable lessons in resilience, adaptability, and the importance of a supportive investor network.

Pari Passu Ventures: Investing on an SPV Model

Julia's experiences as an operator significantly influence her approach at Pari Passu Ventures. Unlike traditional funds, Pari Passu operates as an invite-only network of founders, operators, and accredited investors who invest on an SPV (Special Purpose Vehicle) basis. This model ensures that investments are backed by individuals who bring valuable industry expertise and support beyond just capital.

Benefits of the SPV Model

The SPV model offers several advantages:

  • Flexibility: Investors can choose specific deals to invest in, aligning their investments with their expertise and interests.
  • Engagement: By investing their own money directly, investors are more engaged and motivated to support the portfolio companies.
  • Diverse Support: Founders benefit from a broad base of experienced operators and industry experts who can provide meaningful support and guidance.

Operator-Led vs. Non-Operator Led VC Firms

Julia discussed the merits of operator-led VC firms compared to traditional, non-operator led firms. Operator-led firms, like Pari Passu, bring a unique perspective, having been in the trenches themselves. This experience allows them to empathize with founders and provide practical, hands-on support. However, she also acknowledged that non-operator led firms can excel by leveraging their financial expertise and extensive networks.

Current Venture Landscape and Valuations

Julia provided insights into the current state of venture capital, noting that while seed and Series A valuations remain relatively stable, there has been a notable correction in later-stage rounds. She emphasized the importance of thoughtful fundraising strategies, advising founders to raise sufficient capital to weather unforeseen challenges and avoid being pressured into unfavorable terms.

Impact of AI on Capital Efficiency

The conversation touched on the impact of AI on capital efficiency. Julia agreed with the notion that AI can significantly reduce overhead costs and enhance productivity, potentially enabling startups to scale with less capital. However, she also pointed out that differentiation will still be crucial, as AI becomes more accessible to all companies.

Tips for Founders Looking to Raise Capital

Julia offered several tips for founders looking to raise capital:

  • Craft a Compelling Subject Line: When sending cold emails, use the subject line to highlight key metrics and achievements.
  • Prepare a Strong Deck: A well-organized deck can quickly convey the potential of your business to investors.
  • Raise for Longer Runway: Aim for 18-24 months of runway to avoid pressure and give your business a solid foundation for growth.

How Difficult Times Breed Empathy

Julia shared how her challenging experiences with Village Luxe have made her a more empathetic investor. Going through tough times personally and professionally has deepened her understanding of the struggles founders face, allowing her to provide more meaningful support and guidance.

Backing Diverse Founders

In the context of diversity, Julia emphasized that Pari Passu Ventures does not focus on diversity quotas but rather on ensuring an open and unbiased top-of-funnel process. By doing so, they naturally attract a diverse pool of high-quality founders.