Fellowship Spotlight: Capitalize VC
Though she was learning a lot and having an impact in previous career roles, Tessa Flippin wasn’t fully satisfied. “I didn’t feel like I was fulfilling my own mission of what I want the future of venture capital to look like,” Flippin shares.
Before launching her current fund, Capitalize VC, Flippin was a founder in the FinTech space. She started a payments platform, sending money through emerging markets, before transitioning into venture capital.
Beginning her VC career at TechNexus, she was investing in seed-stage enterprise tech, with a focus on supply chain. Flippin’s five-year history of investing demonstrates her ability to source and execute deals that have high potential for returning capital to limited partners.
Mission-Driven Motivation
Seeing an opportunity to invest in founders who are underrepresented in the VC space, Flippin stepped out on her own in 2021 with Capitalize VC. The founders who inspired her vision were people in her immediate network. “I believed in what they were building and I wanted an opportunity to participate in what they do and support them.” Investing in this diverse group of innovative peers surrounding her would allow Flippin to catalyze the demographic shift she longs for in VC.
“There’s a huge opportunity to change or evolve or solve the problems that diverse communities face, and I think that diverse founders are the most equipped to do that.” She recognizes the impact of the historic exclusion of Black people, women, and other marginalized groups, saying, “The world has been starved of the innovations that diverse founders are coming up with.”
Tapping Into Innovation Among Diverse Founders
Capitalize VC invests in diverse founders working at the intersection of e-commerce infrastructure and consumer brands. Guided by an eight-person investment committee, the $10M fund is writing pre-seed stage checks between $50K and $250K to a portfolio of 30 companies, following on with a pro-rata check at the seed stage. As a fund that’s run by a Black woman solo GP based in Chicago, Capitalize offers access to different perspectives and networks than those offered by more conventional, White-male-led funds.
“I’m super excited about the opportunity to bring more diversity on the founders’ side of the table,” Flippin shares, lifting up the ripple of change that becomes possible when we expand who’s invited to sit at this table. “As you get diverse founders in the space, they obviously have different networks of people that they’re looking to hire. From there, we’re able to evolve even more as we look at things like hiring practices.”
Also passionate about expanding who makes up the “LP universe,” as she calls it, Flippin adds, “A lot of what we do at Capitalize is try to educate investors on the wealth creation opportunities within VC.”
Flippin’s desire to leverage the unique set of skills that she’s honed through her previous experience also shaped the distinct and innovative ways in which Capitalize VC is supporting diverse founders. “I wanted to combine the things that have made me me in my professional career, and that’s FinTech and supply chain,” she says. “I’m iterating on both of those things to expand it a bit more into e-commerce infrastructure and all of the things that that comprises.”
Some of those things include payments infrastructure, advertising tech, and front-facing e-commerce tools like Shopify. But Flippin wants to go a step further. “With Capitalize VC, I’m also thinking down into the supply chain when we look at fulfillment software and things like that for emerging e-commerce brands.”
What Makes Capitalize VC Different
Starting out as solo founder of a crypto-based FinTech company, Flippin has an intimate understanding of what it takes to build a company from the ground up. Her experience building a product, bringing it to market, and hiring a team all benefit the companies in Capitalize VC’s portfolio.
“That’s where we seek to add the most value for our founders,” she shares. “As you’re strategizing around your business model, your go-to-market, your pricing strategy, what are the things you need to be thinking about and how can we help you to do that?” This is why Capitalize VC is focused on pre-seed stage companies: it’s where they can provide the most effective support.
“There’s another part of the value that we bring because of our strategy,” Flippin says, explaining that the fund focuses mostly on technology — investing into the tools and platforms that e-commerce businesses need in order to scale — but also investing in brands.
With their feet in both of these words, Capitalize has more proximity and thus more understanding of the needs and challenges that brands need addressed by technologies. “We’re able to stay really close to the problem that these brands are facing as they’re scaling, and that ultimately makes us really smart investors on the technology side.”
This dual focus not only helps Capitalize stay in touch and make the most informed decisions possible, but also creates opportunities for collaboration across the portfolio. “For a brand looking to tech-enable their site,” Flippin offers as an example, “we probably have tools in our portfolio that can help.”
Participating in the VC Include Fellowship
Flippin credits the VC Include Fellowship with connecting her to diverse and powerful GP and LP networks, while also being unlike similar programs in its thoughtful curation of cohort membership, content, programming, and connections.
“Already other GPs in the program have made introductions to potential LPs, founders, and provided insight around fund operations,” she shares, speaking to early benefits of being a VCI Fellow. To illuminate this thoughtfulness she points out the example of the program’s Demo Day. “They did a really good job of creating meaningful connections between the GPs and the LPs,” Flippin says, as compared to less intentional Demo Days that bring together big groups on Zoom and can lack depth and specificity.
Flippin already sees the benefits of the learning and connections she’s gained from VCI’s extended network, and is equally looking forward to staying in touch with her fellow cohort members. “I’m extremely excited just to follow everybody’s journeys and help out however and wherever I can.”
VCI shares this excitement, and we look forward to witnessing and supporting Flippin and Capitalize VC as they work to diversify the world of VC.
