Fellowship Spotlight: Dahlia VC
Despite their presence and accomplishments in the tech space, Latino tech founders are not receiving investments at a rate that’s proportional to their achievements. Founder of Dahlia VC, Veronica Juarez, explains, “At present, Latinos are one in five Americans, and by 2060, we’ll be one in four.” She adds that Latino tech founders start companies at the same rate as their White counterparts, with their business revenues outpacing those of their White counterparts by $1M in annual recurring revenue.
“When I first started angel investing,” Juarez shares, “I was seeing a lot of great companies — hardworking teams, compelling products.” Despite the promise that she saw in the people she was meeting, they were all echoing the same lament: they were unable to get meetings with venture capital firms.
“Anecdotally, I felt like there was a market to be explored,” Juarez says, “and then I looked at the data and confirmed there absolutely is a market that’s been overlooked.” This is when and why Dahlia VC came to exist. “These companies are already proving that they’re performing; they just need access to equity financing.”
Capitalizing on an Overlooked Market
“Latino tech founders have historically encountered friction in accessing equity financing,” Juarez elevates. “That means that, instead of being able to raise money from VCs, they take out a loan. And what happens when you have two companies that are in a very similar spot, then one takes out a loan while the other receives VC investment – along with advisors and board members?,” she poses. “The company with VC money is able to take that money and reinvest it back in the company versus using their profits to pay back a loan without the added experience of a skilled team.”
In a report published in late 2021, McKinsey and Company elevated that, “Addressing the barriers preventing Latinos from full economic participation could have a multi trillion-dollar impact, further unleashing their entrepreneurial spirit, creating millions of jobs, driving consumer spending, and building intergenerational wealth.” Dahlia VC is looking to capitalize on this overlooked Latino tech market in the United States, investing in companies whose growth is dependent on the prosperity of Latino populations and those founders best positioned to leverage this market opportunity – those with lived experience.
The fund’s name is a nod to the founders they’re seeking. A resilient and versatile flower known to withstand conditions most flowers cannot, the dahlia — the national flower of Mexico — symbolizes commitment and dedication. “These are the founders we are looking for,” says Juarez, “those whose resilience, determination, and commitment enable their success, and their companies’ scale.”
The firm is focused primarily on B2B and marketplace companies – where Juarez and the firm’s Principal have the most experience and can add the most value. Targeting a $15M raise for the inaugural fund, Dahlia VC will invest primarily at the seed stage, with an average check size around $350K. Twenty percent of the fund will be reserved for follow-on capital to select opportunities that are well-positioned to return.
Leveraging Lived Experience
A native of Houston, Texas, and graduate of Stanford, Juarez spent a decade working in politics before spending the next decade as a tech executive. As a woman of color and fifth generation Mexican American who’s excelled in these arenas, she’s navigated more than her fair share of obstacles. “I am no stranger to the challenges that exist when you’re othered in the corporate culture that exists in America,” she says. “Unfortunately, I believe that so many people look at people who are different and don’t see a tech unicorn CEO. They see somebody they’re going to replace in a few years, and that’s not what I see.” What she sees, on the contrary, is a reflection of herself and a wealth of potential and possibility.
She recalls the moment when she realized that the rules don’t apply equally or fairly to everyone, a lesson that she learned during her time as a student of an elite preparatory school. “I first learned this when students would break the honor code,” she says. “If they were from an affluent family, they were not held to the standard of the honor code. But, if they were low income or a student of color, they were expelled immediately.“
This understanding of inequity has fueled Juarez to do what she can to level the playing field. “My commitment is to do my part to identify that top talent and support them to be able to succeed,” she says, “despite all of the challenges of corporate American culture.” And she’s committed to doing her part in a manner that’s compassionate, empathetic, and understanding while also generating returns.
“My motivation and impetus for starting this firm is to be a place that’s led by somebody who understands what it’s like to be different, and to be at least one beacon where founders know they’ll be understood – where learning isn’t looked at as a failure, but as a path to success.”
Tapping Into Operational Expertise and a Powerful Network
In her journey as an operator, Juarez helped to build a staggeringly successful company: Lyft. “I joined the company in 2013 and built multiple teams and business lines inside of it,” she shares. “When we took Lyft public years later, my shares resulted in a 64x return.” This impressive feat on her resume has resulted in a consistent flow of founders seeking Juarez out for advice on their strategy, scale, pitch, and positioning. “It’s so exciting to be able to meet founders on their journey,” she reflects, “and very clearly see the inflection point at which I could have a massive impact — alongside the rest of their cap table — on their ability to scale.”
“Having been an exec in Silicon Valley and now an investor, I have a strong network of other investors, founders, and operators coming out of the Valley. I’ve been working for a long time to build a nationwide network that’s now incredibly engaged with my own work and my mission.”
While Juarez is working as a solo GP, her skillset is complemented by a strong team, including a Principal-in-Residence, Pearson Suniga, who leads on portfolio construction, financial modeling, and deal diligence. “He really takes a data-driven approach to our opportunities and our return profile.” The firm also has an executive business partner, Thao Nguyen to ensure that the middle and back office is supported and streamlined as they do the critical work required to build a firm. Dahlia VC also has the backing of a powerhouse team of advisors from Lyft, Microsoft, and MAC Venture Fund.
The Value-Add of Participating in the VC Include Fellowship
When Juarez considers her experience in the VCI Fellowship, it’s clear that it’s been truly impactful. “So much of the process of building this firm has felt to me like walking in the dark,” she acknowledges, adding that she’s felt this way for most of the past year. “You really don’t know what’s in front of you unless a kind soul who’s just done it has a flashlight and turns around to show you the next step of the way.” She likens VCI and our fellowship to the kind soul illuminating the path ahead. “Since I’ve started VCI, I have not felt like I’m in the dark at all. It’s like the light has been turned on permanently.”
“The work has really driven me to crystallize the fund’s strategy, approach, and differentiation,” she says, speaking to the technical benefits she’s gained. “Our value proposition is now very clear, which is huge at this stage of growth.”
She also reports that the community and network surrounding the fellowship have added great value. “Insights and advice are easily accessible from other cohort members who have just done what I’m trying to do, and that’s been like gold – to be able to talk to people and bounce ideas off them and understand what the options are for various operational challenges. Starting a firm is as much about investing in great companies and scaling those companies as it is about operating the firm, and that’s something I’ve come to appreciate over the last three months I’ve been in the fellowship.”
We’ve come to appreciate Veronica’s passion, dedication, and determination, and we’re eager to see her and Dahlia VC’s continued progress as she leverages the potential of the Latino tech market.
