This Young Venture Capitalist Is Focused On Early-Stage Startups And It's Paying Off

Forbes

Potential backers raised their eyebrows when this film student turned graphic designer decided to launch her venture firm. Molly Mielke had designed products at Figma and Notion and consulted for companies including Stripe and Retool, but she had no formal investment track record. “I definitely don’t look like a model VC,” she says. “I started to specialize more and more in helping tech companies at the earliest stages tell their stories.” That background, plus the appeal of supporting a woman-led boutique fund, eventually convinced limited partners Cendana Capital, Marc Andreessen, Fred Ehrsam and Daniel Gross to back Moth Fund, where Mielke is the sole general partner and has raised $6 million. She’s focused on early-stage startups, provi­ding checks up to $250,000 to companies like electric scooter firm Infinite Machine and a robotic dishwasher company called Armstrong. Now, after investing in 36 businesses, Mielke is doubling down and is expected to raise a second fund. “The right LPs understand VCs should be weird, and they should stand out.”  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00I definitely don't look like the model of VC, but I think in some ways that also kind of helped me

00:04because I think the right LPs, they were like, oh, okay, there's something,

00:08like you'll probably get someone that middle-of-the-road VCs would not.

00:16Thank you so much, Molly, for joining us to chat about all your building with Mothbund today.

00:20Before we get into all the details, can you give me like a 30-second blurb about who you are and

00:25kind of what you're doing right now? Absolutely. Pleasure to be here.

00:28I am the solo GP behind Mothbund. Mothbund is a pre-seed and seed firm that invests in companies

00:33across all sectors, but just really focused on exceptional talent. And my background is I started

00:39off studying film and then got into tech by way of design and just have been here ever since,

00:44basically. And I started to specialize more and more in helping tech companies at the earliest

00:48stages tell their stories and translated that work into Mothbund and kind of found the business model

00:54for it with investing in venture capital. So you started off in the film space. How did you

00:59make your way here? Like, what were the steps along the way? What were the different paths

01:02that you kind of went down? Yeah. So, I mean, I was always the art kid growing up, so I knew I

01:06wanted to do something creative. It's just how my brain is wired and went to film school and found

01:12my way more into design roles again and again. And then COVID hit and I started to explore other

01:18spaces. And tech was a very promising, interesting area. Stumbled across stigma and kind of weaseled

01:24my way in by doing these kind of like strange projects that were more on these blending

01:28between product and marketing roles and found that I just loved the people. There was a certain like

01:32agency in the air and there was a culture within technology that I didn't want to give up. And so

01:38I just stayed and I started doing more and more of those kind of like product design marketing roles

01:43at Notion. And then once I graduated, I started kind of specializing in that and consulting for

01:47companies like Stripe and Retool Browser Company. And through that, I became Sequoia Scout because

01:53of the proximity to founders. And I just realized investing was like the better business model for

01:57what I was already doing. And because they really like aligned the incentives for me to long-term

02:03be partnered with these founders as like a thought partner in all things storytelling and brand.

02:07And so I raised my first fund. It was $4 million. I did 33 pre-seed, seed checks. And I'm now going

02:14to be, I'm working on my second fund, fund two of Mothbund. Coming from the more of like creative

02:19and art background, many people might not think you would end up in the VC or investing space,

02:26but I'm sure that there were so many skills or experiences that you had throughout your art

02:30background that really have helped you today. How have you kind of fused the two, you know, to really

02:36be able to help these founders that you're investing in and the ones that you consulted with as well?

02:40I think the way that I see winning in venture, and this is my hypothesis on winning and what

02:46I've seen just observing around me is you just need to be differentiated. So you need to offer

02:49something that nobody else is either at a stage or in a way or with packaging and a perspective

02:55that is unique. And that is I think where like value add is derived. And for me being creative

03:01and specializing in the earliest stages and serving also just like as an understanding

03:07thought partner to equally creative and outlier founders, I think is kind of my like interesting,

03:13weird amalgamation that makes it something that founders see the value in and want to partner

03:19with me. And so I think that also just the through line of studying art, being in a lot of these

03:25different environments, both the product and the marketing side of all of these different

03:28amalgamations, it just was like a masterclass in storytelling in a lot of different forms.

03:33And I was lucky, very lucky to be around a lot of other people at these companies that were

03:37very good at it and I could kind of like learn their craft in different ways.

03:41How does the creative side of things then play into what your day-to-day is with these founders?

03:45Are you helping them still with the design aspect or with the marketing aspects like you've done

03:50in previous roles of yours or how is it coming to fruition now?

03:53I mainly serve as a thought partner. I think there's, I have a lot of portfolio companies and

03:58my strategy is more of these like smaller checks on the earlier side. But I try to really serve as

04:05from the very beginning, the person that is their first call when they're thinking about

04:09how they're presenting themselves, how the story is resonating and how it's falling short,

04:14what is the right kind of words and also actual literal partners for them to find,

04:19to work with from the beginning to kind of like bring their vision to fruition.

04:22Because I often distill it to the founder kind of contains this interestingness and it might be a

04:28mission or a ambition or whatever they're building and it's about translating that. And often they

04:34just need somebody that is external that can tell them what is objectively interesting about their

04:38story and how it should be portrayed. And so I kind of, it's my honor to serve that role to them.

04:44How do you find what's special about founders both to tell their story and then also to decide

04:48that you're going to put your own money and the fund's money into their ventures?

04:53I think it just comes down to spending time with people. I think like I only really developed this

04:59kind of felt sense and the conviction and seeing the qualities that I want to see for me to believe

05:04that they're going to be a venture skill founder by just seeing them in a lot of different contexts

05:09and how they behave and how their personality spikes. And I'm a pretty strong believer that

05:14like everyone's greatest strength is also their greatest weakness. So until I have an understanding

05:18of what that is, I don't really feel confident in understanding them enough to make a bet myself.

05:23But I think more broadly the things that I look for while I'm spending that time are

05:27a mix of like taste and competency. Taste I just define as like

05:31a competency that means that they have high quality standards that they can actually actualize

05:35mixed with commercial instincts like they need to know how to capture the value that they create

05:40for it to make sense for VC. As well as I think just like a hard won determination,

05:45something steely about them that makes me sure that they're going to continue pushing again and

05:50again and again. Are there some of those strengths that you look out for that you find yourself

05:54really drawn to with the founders that you're working with? Yeah, I think I've definitely had

05:58to learn to avoid perfectionist founders. Because I think like the downside of taste is that some

06:05people never get past the loop of having high quality standards but being too scared to

06:10disappoint themselves. And that's something that like I like the people that have the high quality

06:15standards because I think that I can uniquely help them often overcome that. But I have to

06:20step back from that sometimes and just be like, I can't spend the time necessarily. Like do I

06:25actually just believe in their slope enough to know that they'll get over this? Or do I just

06:29want to bet on people that have already overcome this hurdle? Yeah, when you're looking at these

06:33companies you typically invest around $100,000 correct into their pre-seed or seed rounds.

06:39Why is that scale and size of a company and size of a check what you are most focused on right now?

06:45Why does that size make sense to you? Yeah, so my first one was very much in my second fund will

06:50be to like a straightforward power loss strategy. And so basically just a couple of the companies

06:55in the portfolio I had 33 in my fund one will hopefully be very big hits and like massively

07:02unicorn venture scale. And that is something that I just basically need lots of shots and goal

07:07to accomplish that. And so going forward I think I will have more kind of a slightly larger check

07:13size with more reserves to like double down on what's winning. But to start I really wanted to

07:17prove out my taste and show my access and like what which types of founders should work with

07:23me and discover that myself. And I'm really glad that I took that kind of more straightforward

07:27approach in fund one. Yeah, definitely. Are there any like I guess trends or industries or types of

07:35businesses that you feel like have been particularly either like successful or just exciting for you to

07:40work with in that first round? I think it's funny I've done a lot of work of like what are the

07:45through lines to my fund when and like what's working. And to be honest it's like all the

07:48weirdest companies I think the ones that are like doing the most interesting stuff have the most

07:53you know tactical metric markups that kind of thing. It's usually the ones that people don't

07:59understand and that is kind of like the most interesting thing. But I think more pertinently I

08:03think all the founders of the companies that seem to be trending more on like the venture scale

08:08direction are very outlier people. Like there's no one else like them. They're an amalgamation of

08:14qualities that I've never seen put together in that way. And it might mean they're actually just

08:18like they're great against their greatest strengths the greatest weakness. So it might

08:22actually be holding them back in some ways that make some people not understand them. But I think

08:25there is like a lot of courage in being misunderstood and for some of them it really

08:29works. Do you have any examples of those 33 that you feel like have been that's really stand out

08:34in your mind of like the most either promising or the ones that you feel like you're really

08:38excited to see where they go in the future? Yeah there's a company called New Computer and it's

08:43founded by a friend of mine named Jason Wan and Sam Whitmore. And they are building in like the

08:48consumer AI space. So it's obviously like one of the hardest games that they can play. But I think

08:53what excites me about them is that they are two of the most competent people I know in their

08:57respective domains of design and engineering. As well as they bring a perspective and an empathy

09:01that they imbue into the product and what they're building. That in this way that I think they're

09:06going to hit on something very special that no one else would be incentivized or interested in

09:10building. And I think that that coupled with their very high quality standards and like very fast

09:15pace of iteration is the type of thing that like as a pre-seed investor there's no better bet in

09:20my book. Yeah. And I'm honored to support them. In terms of the AI space it's obviously a huge

09:26topic among investors, among founders, among businesses of all sorts right now.

09:30What are your thoughts on the future of AI? Is it overhyped right now? Is it going to change

09:34everything forever? Like where do you see the AI space taking us moving forward? Yeah. To be honest

09:40like I don't really have very sophisticated thoughts on AI. I think but what I do have is like

09:45I try to make it my job to specialize in knowing where all the talented people are.

09:51And I know that in the last year or two so many of the most talented people that I know have been

09:56building in AI. And so that's where I spent quite a significantly amount of time. And I think I'm

10:00going to continue doing that no matter where it leads me. But I think that there is something to

10:04be said for like when it is such a crowded space and game you really have to look for the people

10:09that are at the very top of their craft. And my very loose framework for thinking about AI

10:15companies also is something around it either needs to be category creation something that

10:20none of the big companies would touch or it needs to be something that is so vertical specific that

10:24it's basically a SaaS company with just like a layer on top that make it makes it basically super

10:29charged. Yeah. And other than AI are there any other trends over that past like one to two year

10:34period that you mentioned there that you feel like investors are really latching on to? I definitely

10:38saw a lot of hardware. Okay. There's a lot of very talented people building in there was consumer

10:43hardware but there was also just like larger plays that have been incubating for a while robotics

10:47things of that sort. I think that deep tech continues to be an area that you know has

10:52interest from investors so that the companies continue to be founded. But I think that in

10:56general there's been kind of a diaspora in like the last like since beginning of the year this

11:002024. And I'm kind of excited to see that trend because I think it's becoming a little bit more

11:06evenly distributed. If you have any piece of advice for founders who are coming to investors like you

11:11today what would it be? How can they break into an industry when so many people are looking for

11:16money? What can you tell them about maybe the ways to best do it? There's a couple failure modes that

11:21founders fall into. I think one of them is they overemphasize the business. I think in others they

11:26overemphasize just needing connections and not really having much beyond that. I think that

11:33like the best founders really balance like a deep ambition and clear vision of like what they

11:39want to build and why mixed with knowing the importance of relationships. And trying to tread

11:45both of those lines simultaneously I think is something that is kind of like the task of

11:48successfully fundraising. And so I think that investing in the bedrock of both of those before

11:54you go out to raise I think it is quite helpful. Or just having like a trusted group of people that

11:59are like your thought partners that can give you feedback on both and kind of develop those

12:03concurrently. So that you have the relationships in place that can intro you to investors or already

12:07are investors mixed with like a clarified vision of like what you're building and why. And what

12:12your ambition actually looks like to its fullest fruition. Yeah for the founders who are in those

12:17very early stages, maybe pre-seed, maybe even pre-product, how can they exemplify that to you?

12:23Like this is what I want to build. This is what I'm currently building. If they don't already have

12:26something tangible they can show you. They definitely don't need to have like a product or

12:31even like a company structure or anything of that sort. I think I really look for somebody that has

12:36clarity of thought. And to me like I'm a little biased because I love writing myself and it's

12:41served me quite well in my career. But I think that there is something very very powerful about

12:47a very well-written memo that just details where you're going in the short term, where you're going

12:51in the long term, what the potential business plays are here. You don't need to have that

12:55flushed out but you need to at least be clear that you're thinking that way for it to make

12:58sense for venture. As well as just generally your interest in this. What is the interestingness of

13:04this problem and why are the best talent going to want to work with you? And why should I as an

13:08investor believe in you? I think that those are like the questions that we're trying to answer

13:12generally at like the pre-seed and seed stage. And how about for those who want to come in and

13:17be an investor? Like on that side of the table, what are some advice you have for early investors

13:23who are just getting their foot in the door or want to just you know start working with these

13:26companies like you did prior to even investing on yourself? What are some ways that they can

13:31break into this industry? Well I think first it's like knowing if this is really the industry that

13:36you want to be in. I think that there's like the few things I'll note about VC are that

13:42the feedback loops are really long. And everyone says that and it is very unclear what it means.

13:46But I think tactically what it means is that it's very hard to feel satisfied on the day-to-day

13:50because you never know if you're doing enough or if you're doing the right thing. Because you just

13:54aren't rewarded really and until maybe five years. But technically really 10 is like the limit.

14:00And I think that there's something about that that means that you need to be very proactive

14:04about creating your own motivation. I think if you work at a firm or something you can get more

14:09of like the validation from appeasing your partners or something. But at least for me that

14:13was never really what interested me about investing. It was more about the craft of

14:16understanding humans, making good decisions, building a brand, and serving people long-term

14:22in partnership. And so I think that like honestly what served me the most was becoming more honest

14:29with myself about what my strengths and weaknesses are. Whether I am actually a fit for VC. And I

14:34think in my case because I get a lot of satisfaction and have kind of like designed feedback

14:38loops for myself around writing and being around other brilliant people and learning from them.

14:43That works for me. But other people it might not work for. So I think that like there is some

14:47digging that needs to be done there. But beyond that it's like what served me a lot is writing,

14:52building a brand, being very clear on the types of people that you want to back, and having like

14:57case studies of how you help them. As well as just generally being of service. I think it's like

15:03the key act of what being a VC is. And so starting to exercise that. Was there anything after you had

15:10your experience as a non-founder of a VC fund and firm that you wanted to come into this industry

15:18and change? Like was there anything that you had experience that you really wanted to shake up or

15:22put your own spin on it as kind of a leader in the space now? Lack of track record is something

15:28that was the main deterrent for me from starting my first fund. And I was very lucky to have

15:33some early believers that believed in my taste as they saw exemplified through my decisions,

15:39my writing, the companies I've worked out in the past. The way that I see it is VC is trending in

15:43a direction where we have the big factories, which are like the big firms. And then we have

15:47the hyper-specialized small firms. And there's solo GPs and small firms and super angels. And that

15:53is something that I think that the smaller firms and the solo GPs and these angels. I hope that

16:00increasingly LPs are more excited about them being stranger. Because I think that the stranger

16:07they are, the more they will deeply resonate with the right types of people and founders.

16:12And I think that specialized approach is a bet that is very anti the big firms, but it is ultimately

16:18where I believe the alpha will come from. Because you need both. You need like the more indexed

16:25approach and then you need the hyper-specialized small bets and a lot of different highly

16:29concentrated in a specific type of founder or company or whatever it is. And that doesn't

16:34necessarily need to be specialized to a sector that can be specialized to a type of person,

16:38an archetype. And so I think that there's like this growing definition that I'm hopeful will

16:43be emerging and trying to help write that definition myself around just there are ways

16:49of stratifying founders that are not necessarily by sector and betting on firms that are specialized

16:55in capturing all of that strata of type of founder. That can be a winning approach.

17:01And my last question for you, we know that so little funding goes to female founders,

17:06around 2% of venture capital funding goes to female founders a year. Being a woman in the

17:11space, being a young woman in the space, being in the under 30 category, how do you see your

17:15position in this industry? And how do you plan to kind of either bring more women in? Do you

17:20plan to bring more women and young people in? Or where do you kind of see your age and your

17:24demographic as maybe a strength, maybe a weakness in this industry?

17:29Yeah, I think it's interesting because in some ways I am very, I remember, I definitely don't

17:38look like the model of VC. And so when I started to fundraise, I think there was a lot of, in some

17:43cases, like raised eyebrows about like, who are you? And how did you get introduced to me? Like,

17:47how did you, you're young and you're a woman and like, you don't have a track record. What is this?

17:51Um, but I think in some ways that also kind of helped me because I think they, the right LPs that

17:56understood in, they understand and are bought into the differentiation approach of like, VC should be

18:01weird and they should stand out. And so they really resonate. They were like, oh, okay, there's

18:06something like, you'll probably get someone that the other people that are more middle of the road

18:10VCs, just very well connected in the space would not know. Um, and so being a like weird fish in a

18:16small pond has kind of helped me a little bit, but I think in general, yeah, I think that there

18:20is something about like, even as it's simplified for my fund one portfolio, I, I do compared to the

18:25average other fund, I will definitely be investing in many more women. Um, and that's something that

18:30I think also there's unique ways in which that I can help them because I just understand what it's

18:36like to be a woman that also needs to raise money. Um, and so there's some kind of like

18:40resonance there that I, I am excited about continuing to expand upon. Yeah. Well, I love it.

18:45Stay weird in the VC space, I guess. Thank you very much. Appreciate it. Thank you so much for

18:49joining us today. It was super great to get to know more about you. Thank you so much. Lovely.

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