Making a great investment is no easy feat. You have to find incredible teams with strong, differentiated products operating in growing, open markets; figure out how you can add meaningful value to their businesses; be willing to bet on trends and growth opportunities that others may not see; and of course convince those teams to choose you over other investors. Back in 2016, Laela Sturdy co-led Stripe’s Series D at a $9.2 billion valuation.

Today, Stripe has a valuation of $95 billion, making it the most valuable startup in the United States. And with this investment, among others, such as UiPath (which this April made its public market debut in the 3rd largest software IPO in US history), Gusto, Duolingo, Unqork, Cloudflare, Credit Karma, Webflow, and more, Laela has cemented her status as one of the world’s top investors. Her 10 investments, all now worth $1 billion or more, are collectively valued at nearly $200 billion.

But Laela’s path to becoming a leading investor was anything but linear. Laela joined the Xoogler.co community for a fireside chat on Thursday, June 10th, where she discussed her journey, how to grow as an investor and build trust with founders, keys for developing strong leadership skills, and insights into the evolving investment landscape.

Fireside chat with Laela Sturdy

Can you tell us a little about your background?

I grew up in Cooper City, Florida. My dad is Jamaican, and my mom is English, so I grew up with an international outlook that was shaped by my experience as a first generation US citizen. Our dinnertime conversations were global in nature, and we often discussed topics relating to socioeconomic mobility and social justice. I was also an avid basketball player — so much so that I was recruited to play basketball at Harvard. In college I studied biochemistry, initially intending to go into medicine, but my interests shifted towards non-profit work. After college, I was privileged to earn a fellowship at Trinity College in Dublin where I researched the digital divide. After Trinity, I worked at several nonprofits in the U.S. and abroad and ultimately moved back to the U.S. to attend Stanford Business School and explore my growing interest in technology. I joined Bain as a consultant in 2004 and then Google in 2007. Working at Google was such an incredible experience! It enabled me to meet many amazing people and to work on exceptionally challenging, interesting projects. In 2013, I joined CapitalG, Alphabet’s independent growth fund, to help build the firm. At CapitalG I’ve been thrilled to work with some remarkable founders and companies who are impacting the world in really meaningful ways. Today I live in San Francisco with my wife and three kids. I am so happy to be back in the office because working from home while homeschooling was an adventure, to say the least!

Can you talk about your journey into these interesting opportunities?

Google gave me an opportunity to take risks and explore multiple spaces while maintaining a sense of security. I started in a strategy role around the time that Google bought YouTube, so I worked on YouTube’s product and go-to-market strategies and on defining its role within Google’s overall business. Then I transitioned into leading a sales team — even though I had no background in sales! Those are the kinds of opportunities you can get at Google after you prove yourself. After a few years, I began to get Women@Google off the ground.

From my work at Women@Google, I was approached by Google’s Head of Emerging Businesses to take her role. It was a huge shift for me to lead the team launching emerging businesses in local commerce. I was always very attracted to entrepreneurship and risk taking, so I was lucky to have found an entrepreneurial role that enabled me to build those skills within Google.

What are some of your best practices when approaching your career development?

I think it comes down to self-awareness and understanding what you value. A lot of people thought I was foolish to transition to the role of Head of Emerging Businesses because I was already the Head of Media, Entertainment, and Google Media Sales, so in some ways it looked like a step down. But I knew that it was something that I cared about, and I knew the role would produce a rewarding learning curve. I feel the right risks have the right rewards, so considering where you are and where you want to be on the risk/reward spectrum is important.

I also value building meaningful relationships with the people with whom I work. I tend to have a network that is deep but perhaps smaller. Many of the notable career transitions and investments I’ve made have leveraged my network of close, highly trusted contacts and friendships.

What was the most challenging part of transitioning from operator to investor? What can people do to fill those gaps?

I’d say it’s important to recognize that it’s a long journey, and it takes a while to get the full skillset. It’s critical to be patient and to embrace a learning mindset. One challenge at the beginning was that I needed to learn core investment skills like how to determine valuations. It was fortunate that I was able to learn from incredible mentors at CapitalG like Gene Frantz and David Lawee.

Another challenge was determining which data points to listen to. Even the most compelling investment opportunities will have some strikes against them because nothing is a sure thing. At the end of the day, an investment is a calculated risk in a team, a product, a vision and a market. Every investment is significant, especially at the growth stages where we often invest $50 or $100 million, and therefore where each investment requires a high level of conviction. Before making investment decisions, I always speak with customers, partners and industry experts. Often experts will only understand where the market is today and not where it’s going. It can be scary to decide that you know more than the so-called experts. You have to decide when to listen to them and when to ultimately trust yourself.

What is your advice for people looking to move into an investor role?

Different skillsets are needed for different stages of investing, so I would say to focus on the stage you are looking to enter and develop skills in that space.

Angel and seed stage investments rely on strong knowledge of trends and an ability to network. At those stages, there are thousands of opportunities, so you need to find out about them, wade through the options and know where to place your bets. Hustle is more important than anything because it’s really hard to get a seat, and it’s equally hard to get good deals done. Angel and seed investing can also be a good way to break into later stage investing.

In growth stage investing, we look at companies that will become market leaders, so there are only hundreds to perhaps a few thousand opportunities. Here, the skillset is more analytical, though it must be coupled with the same deep understanding of trends and strong networking skills. A lot of growth investors come from banking and other analytical roles or, like me, have an operating background in growing and scaling companies. My experience leading emerging businesses at Google taught me how to build teams from 0 into the hundreds and has made it easier for me to empathize with founders who are experiencing the highs and lows of entrepreneurship. Unfortunately, there are not a lot of seats at growth-stage firms, but the good news is that because so many skills are needed, no one is good at or experienced at all of them, and therefore there’s no one perfect path to get here.

For investors across stages, a learning mindset is critical, as are hustle and a strong network. If a fund is looking to hire an operator, they generally look to hire successful operators from the startups that they’ve funded.

Becoming an investor is a long road, so be patient with yourself. There is a lot to learn, but the accumulation of knowledge makes investors better over time. There’s also a healthy side of luck.

Can you talk about the broader landscape of your investment thesis and how it has evolved?

When I first started investing, I started by focusing on categories in which I had operating experience. One of my first investments was Gusto, an SMB payments benefits platform. Gusto caught my attention because I had learned how hard SMB marketing and sales were when I helped start AdWords Express. I ran the go-to-market side, so I learned about the successful products in that space and what kind of signals to pay attention to.

As I gained more confidence in my overall investor skill set, I began to explore other markets. I have always been interested in trends around product-led growth and fintech, and that led me to Stripe. I was also interested in Stripe because of the developing theme around developer-led sales. It’s a very different go-to-market motion that is more product-led, and it’s an idea I love.

In investing, growth companies often fall into two categories: new market creators or next generation companies operating within established markets. I have always been more drawn to the new market-creating opportunities, so I spend time with companies where I can see how the market is changing.

Stripe got me thinking about a development-led ecosystem. That experience then led me to become interested in the “no code” sector where I’ve invested in Unqork and Webflow. My conversations with CIOs led me to become interested in automation, which led to my investment in UiPath. What is great about investing in new market creators is that you get this massive information advantage within new markets. For example, I invested in UiPath when they were $30M in ARR, and the public numbers in their last earnings report are north of $600M. In that scaling journey, I’ve learned so much about the company and the market created around it. Now when I look at other players, I have an advantage because I have firsthand insight into pattern matching.

What is so fun about this job is that you can keep taking pieces from it and then move on to the next. That enables me to constantly learn and also constantly update my investment theses.

What trends have you found to be interesting following the pandemic?

I think e-commerce is having another revolution. I also think that platforms like Shopify and Amazon have gotten so massive and there is a lot to unbundle around their growth, so I have been spending time thinking about payments and software as they relate to e-commerce and these broad platforms.

Also, the valuation market is very hot right now. There are so many great companies out there and so many large scale companies that are growing at astronomical rates. A lot of trends are coming together in exciting ways.

How do you invest in a market where everyone is so competitive?

It comes down to having a differentiating platform. Being able to leverage the Google brand halo at CapitalG has been a huge advantage. Additionally, we have created a very robust advisory network inside of Google and across Alphabet — as well as among many Xooglers — to help out portfolio companies. We are also in the fortunate position of having a great portfolio and enthusiastic references. All of this said, we still have to hustle because the market is competitive and always evolving. In today’s competitive environment, we have to be ready to move quicker than ever to find the founders looking for VCs like us who are actively involved and who add substantial value to their companies.

Can you talk about how you build trust with founders?

This is one of my favorite parts of the job! Investments are such a significant decision on both sides, and at the end of the day it’s ultimately the founder’s decision. With growth investing it’s a competitive process because many of the companies I go after have many other VCs going after them as well. At this point in my career, I only like to work with people I am very excited to work with. When it comes to building trust, I try to be as helpful as possible to founders. I’ve seen some helpful boards that are very involved and boards that are not so helpful. For me, a lot of the trust comes from caring for the founders, showing up reliably, actively helping them with both tactical and strategic needs, and always telling the truth — whether it’s good news or not-so-good. It is really unhealthy when nobody on the board tells the founder that they don’t like his or her leadership style or direction, so for better or worse, I volunteer myself for a lot of those tougher conversations. It can be scary, but it creates powerful trust because of the bond created by getting through these hard conversations stronger than ever.

Are there frameworks you use for tough conversations?

I often share my experiences. When I give feedback, I try to think about how I am probably doing something similar because I believe there is a lot we can learn from looking at ourselves. In my experience, people are more responsive when I share my experiences in a vulnerable and serious way.

In your experience, what do you believe separates great leaders from the rest?

There are so many different ways to be a great leader. I definitely think about this a lot in terms of both improving myself as a leader and by observing the leaders I work closely with at CapitalG portfolio companies.

Vision matters a lot. It’s key to understand the environment you are operating in and to be able to tell a compelling story about why your product matters. Those visionary founders are the ones I am attracted to. Strong vision and leadership set companies on the right path with product and engineering, sales and marketing, recruitment and retention, follow-on fundraising and public debuts, and team and board management.

Another key skill is the ability to confidently and effectively handle complexity. I believe that great leaders acknowledge complexity while still maintaining conviction and inspiring people to follow. That skill is inspiring to me and is the kind of leadership I’m fortunate to be surrounded by at CapitalG — both among my colleagues and among our portfolio leaders — every day.

You can review CapitalG’s portfolio here and job openings at their portfolio companies below.

Here are some examples:

Orca Security:

VP of Corporate Business Development

Americas HRBP

Everlaw:

Director of Human Resources

ID.me:

HR Operations Manager

Webflow:

Sr Manager, Total Rewards + HR Ops/Compliance

Senior Manager, Business Recruiting

Thumbtack:

Director of Org Development