Social Impact Investors: How Kimberely Nixon of Open Venture Capital Is Helping To Empower People and Projects That Affect the World
Team talent is the most important aspect for early stage startups. A good team is curious, confident and highly capable. I really appreciate technical expertise as sweat equity. Every team needs a good competitive advantage and technical expertise can really set you apart from fast followers. When I was investing in real estate I’d model acquisition and stabilization costs and run scenario analysis incessantly. My dad did almost all of my work in the early days, and it was an advantage that I could work into my calculations. I do the same with teams that I’m analyzing now.
As a part of our series about “Social Impact Investors”, I had the pleasure of interviewing Kimberley Nixon.
Kimberley has had some challenging times in her career such as a cancer diagnosis that inspired her to create a life that values “time freedom” and inspires others to take risks to find financial and personal success.
Open Venture Capital is a Black female-owned venture firm that drives momentum for founders through capital, advisory and incubation. They invest in wellness, sport, fitness, and consumer technology industries. Nixon also prioritizes educating and investing in other Black and minority founders.
Some of Open Venture Capital’s current investments include Pear Suite, a B2B SaaS eldertech solution that enables anyone to become a virtual care navigator; No Limbits, adaptive apparel for amputees, wheelchair users, and people who experience limited dexterity and sensory sensitivities; O-p-e-n, a mindfulness studio that shifts your state through a combination of breathwork, music and guided meditation and Break the Love, a recreational sports tech platform, starting with tennis and pickleball; connecting players to each other and to available courts near them.
In addition, Nixon is a wife and mother of 2 pre-teens all while running Open Venture.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
The last two places I worked were VC backed and PE backed. I learned so much about the world of private capital and the ways in which these teams were assessing risk and directing dollars to their highest and best use cases. I started to think about how beneficial it would be to have my domain expertise, a good pipeline of investments and the capital to deploy . At first, I thought I’d just be an angel investor and then eventually a LP in a fund. But the minimums were way too high for the funds I wanted to invest in. Honestly, that ticked me off. So I decided to start my own fund. I could write smaller checks because I add value to my portfolio companies, and I wanted to make it easier for potential LPs to participate. We actively look to include first time LPs. People that want to test the waters, write smaller checks and learn as they go. We are keen on building a diverse cap table — and we’re hyper focused on including black women.
Can you share a story with us about the most humorous mistake you made when you were first starting? What lesson or take-away did you learn from that?
Oh man, the early days are so rough. You spend a lot of time refining your pitch and hearing “no”… a lot. There’s not a lot of humor in your early mistakes. Probably the funniest moment early on was how often I’d test out my fund description and one liner. I was in a 12 week virtual program for emerging managers. Each week my cohort would meet with a leader in the VC space. We had to introduce ourselves each time and by week 4 I could basically recite everyone else’s description. I was super early in the process, so I changed my pitch week to week. I tested everything — my thesis, my fund size, my areas of focus, eventually I even changed the name of the fund. That one got some giggles because what’s left to change after that! I’m a big believer in testing and iterating while the consequences are minimal. So that’s what I did.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
I received a piece of advice very early on in my career, that if you want to be promoted, move up the ladder etc. you have to be known for something. People have to be able to identify you as the go-to person for …something. With every role I’ve taken since then I’ve asked myself what do I want to be known for? And will this role help me get there? The tipping point in my career came when I could clearly articulate my expertise in a space. At first it was for building and commercializing connected products in the health and wellness space, eventually it became my health and wellness industry expertise. Now, I want to be known as a true value-add investor to early stage companies.
None of us are able to achieve success without some help along the way. Is there a particular person or mentor to whom you are grateful who helped get you to where you are? Can you share a story about that?
You can ask me a thousand times, the answer will always be my parents. Parents who let you dream big, encourage you to take risks, and teach you to stand up for yourself — it’s the trifecta. It is so rare. I often tell stories about my mom, a retired nurse, writing letters to her union rep. She had zero tolerance for staff or patient mistreatment. My dad, a carpenter, is not a huge risk taker. Whenever I’d share what I had up my sleeve, he’d remind me to go at a sustainable pace, to build something that would last, and to never let my integrity be jeopardized. Good advice for building a strong foundation or a sturdy piece of furniture. The lessons I learned from them have covered me in every situation. When to leave a role, when to take a role, when to bet on myself, and now I apply these lessons on how I take bets on others.
Do you have any words of advice for others who may want to embark on this career path but are afraid of the prospect of failure?
The prospect of failure keeps so many of us from taking a leap. Especially now. There’s a tendency to build in public, to make announcements across your social media platforms and to conduct interviews like this one, which memorialize your goals and intent, forever. So if you pivot, fail, or give up — there’s a perpetual track record of your work. I believe there are two key tactics to keep in mind here:
- Adopt an agile development approach to your work and goals. This means iterative and incremental development, accepting and even celebrating testing and research as a part of your process, and focusing as much on who you are working with as you focus on what you are working on. The caliber and value-add of your network is important.
- Get better at accepting failure as part of the equation. You win or you learn. The more you can envision that your goal may take different shapes and forms than you’d like, the greater your ability to preempt the anxiety and depression often associated with failure. Be aware of where you put your energy. If you put all your focus on what went wrong, you may miss the glimmer of what is going right.
The United States is currently facing a very important self-reckoning about race, diversity, equality and inclusion. This is of course a huge topic. But briefly, can you share a few things that need to be done on a broader societal level to expand VC opportunities for women, minorities, and people of color?
The country is only facing a reckoning because bias turned to egregious acts of hate. With the advent of social media, it became impossible to ignore or deny. That’s why we have collective consciousness and self-reckoning.
For Venture it’s different because bias is built into the asset class. VC firms have selection bias called pattern matching, which often leads funds to choose Founders that are characteristically similar to Founders that have already been successful. Second, Venture as an investment vehicle is only available to accredited investors — the majority of whom reach accredited status via their income and / or net worth. There are many forms of bias built into the accredited investor definition — such as precluding your primary residence from your net worth calculation and the single vs dual income thresholds which heavily favor married couples.
To offset bias in this space we basically have to focus on just one thing. Cost of Capital. In theory, this is an easy enough measure tied to interest rates, return estimates, etc. But we know there are several hidden costs of capital that exist for historically disenfranchised groups and many of these can be measured — to include:
- Lower valuations at early stage requiring Founders to part with more equity for each dollar raised versus their peers that fit the pattern match
- The amount of time spent raising capital versus their peers that fit the pattern match
- Higher requirements for traction or track record vs requirements set for their peers that fit the pattern match
We have to reduce these burdens and these costs. It’s incredibly important that we move beyond investing in women and people of color as part of an impact or charitable funding mission, and instead recognize the higher Cost of Capital as an egregious act of bias that needs to be offset.
You are a VC who is focused on investments that are making a positive social impact. Can you share with us a bit about the projects and companies you have focused on, and look to focus on in the future?
My fund focuses on pathways to health, care and wellness. This is not particularly socially impact focused. None of our investments to date lead with a social impact mission. However, I’m searching for large underserved TAMs, and within health and wellness you can usually find that in communities formed around a common need. Servicing the need, that’s where we can see impact.
I spent months in research mode, identifying underserved areas and outstanding needs; afterwards I started to look for the product or service innovations that could be a fit.
Eldertech is a perfect example of this. The fastest growing age group globally is the elderly population aged 65 years and over. This group is expected to grow from 703 million (calculated in 2019) to 1.5 billion by 2050. We have to rethink care in this space as labor shortages, and slow nursing home growth are already an area of concern. Is this impacting a specific community? Yes. Does it require disruption? Absolutely. Am I also considering self preservation for when I join the over 65 club? You bet.
We made an investment into a company called Pear Suite — through their platform and their care navigators they are able to manage, measure and track key social determinants of health for the aging population. This allows care givers, community outreach and medical providers to have ongoing access to the dynamics impacting their aging patients, and to proactively solve for challenges such as access to transportation, medicine adherence, and other key consideration factors.
Was there an “Aha Moment” that made you decide that you were going to focus on social impact investing? Can you share the story with us?
There can be many points of friction on the path to better living. If you’re fortunate to have access to all of your preferred health and wellness tools, you may not appreciate some of these challenges. For example, access to nutrient dense foods often comes at the cost of shorter shelf life. Tracking your data leads to greater engagement and higher utilization, but Connected Fitness solutions like Peloton and Tonal won’t fit in everyone’s home or budgets. Meditation has tremendous benefits, but requires practice and space to quiet your mind. Have you tried telling a toddler “Mommy needs 10 mins to quiet her mind?!?”
Everyone’s health and wellness practice is unique, and our needs are ever changing. There are so many pathways to better living, and our fund is focused on increasing access across several touchpoints: new modalities, broadening reach and distribution, increased time and financial resources and culturally competent care.
I recognize my enormous privilege when it comes to health and wellness. I started practicing yoga almost 20 years ago when I found a safe space to be new, and bad at it. A Puerto Rican woman — who was a software engineer by day, and a yoga teacher by night — self funded one of the first studios in Bed Stuy, Brooklyn on Myrtle Avenue. She would be prompting sun salutations, and I’d still be looking at my feet! She guided me through. She was kind, and patient. I would take two buses to get to that class, and if I was running late and called ahead they’d make sure someone unlocked the door for me. I had access, time, resources and community — I felt welcomed and I wanted to come back.
I’ve never had a gym membership. Early on in my career I traveled extensively for work and had hotel gyms at my disposal. I took classes at studios and Crossfit, and when we had kids my husband built us a home gym. He was Crossfit certified, so he trained me in the garage. I worked for a large athletic brand and we worked out pretty regularly — we worked out before our offsites, there was a gym on campus, and I worked on product teams so I was often running or working out to test new products. I went on to lead Sales for a large yoga company, so I had lots of access there as well. But you’d be surprised how many times I’d visit studios and get asked if this was my first time trying yoga. Somehow, all this time later, black and yogi didn’t naturally occur to people. I should insert here that despite all this access it has taken me years to actually enjoy working out and I still use many expletives to get through weighted squats.
I tell all my LPs to expect a financial solution to show up in this health and wellness fund. I think financial health is one of the most undervalued pathways to better living. Ask anyone that couldn’t make payroll due to the SVB collapse in March. Instant stress. Everyone impacted by SVB aged a year in one weekend. Now imagine that’s your rent payment and that’s your reality every first of the month. It takes a toll.
What are your “5 things I need to see before making a VC investment” and why? Please share a story or example for each.
1) Team talent is the most important aspect for early stage startups. A good team is curious, confident and highly capable. I really appreciate technical expertise as sweat equity. Every team needs a good competitive advantage and technical expertise can really set you apart from fast followers. When I was investing in real estate I’d model acquisition and stabilization costs and run scenario analysis incessantly. My dad did almost all of my work in the early days, and it was an advantage that I could work into my calculations. I do the same with teams that I’m analyzing now.
2)Focus — This is nuanced. I like companies that have a couple of streams of revenue, but I want to see the team focus on a core function and mission. An example of this is Break the Love. The team built an incredible brand and they were able to secure early brand partnerships while they worked on building inventory. They created a marketplace that increases access to sport and facilities for recreational sport enthusiasts. All of their work tied to their core mission, and they never strayed from that purpose.
3)Passion — Passion gives you purpose beyond just an exit and ensures you keep your users top of mind. Passion attracts resources to you. Passion is contagious and sets the tone for the team. You will need passion when the tech doesn’t work, the customers don’t show up and the well runs dry. Passion takes you further than a dollar can.
4) A competitive advantage (beyond the talent stack) — big named customer, large annual recurring contract, rent free spaces, government contracts, access to non dilutive funding — Show me something that gives me a reason to believe someone can’t recreate what you’ve created in half the time, now that you’ve shown them the blueprint. Help me to estimate how long it would take someone to come after you and build something similar, and show me a product roadmap that points to how far ahead you will be by the time that they try.
5) Stickiness — I think about this in two ways, is the product so obviously tied to a certain type of user that people immediately know who it is for and will readily refer it to others? OR is the product such an incredible solution to the problem that the person will recommend it because they want others to experience the joy of the solution? I think of sticky as a measure of retention and referral. I invested in an adaptive apparel brand called, No Limbits. Their product is highly functional and their user group is clearly defined. Their first product was designed for lower limb amputees. I invested in them because I was looking for a brand that was as sticky as Figs. Highly functional product, with a very clear use case and a passionate team and community. Winning combination.
If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
For half of my career I’ve worked on product teams trying to figure out what the secret is to the recovery category. Collectively, we just don’t spend enough time doing it. We all collapse into bed after long days, or wind down with a glass of wine, or 30 mins scrolling tiktok. I wish everyone could truly just get 10 minutes of Savasana daily. Remember when all yoga classes were 90 mins long. I used to say I spend 80 mins doing whatever I’m told, so I could just lay down in Savasana for 10 mins. Classes got shorter and Savasana started to become an after thought even in yoga classes! We are revving our engines most of the day — to be able to move to complete stillness to give the body and mind time to experience release, is really special. Any recovery practice would be beneficial. I think that’s why we’re starting to see more cold plunges as well. You truly have to release, and go within. You can not fight it, you just let everything go. Breathwork is also great for this. I think recovery is the next frontier for the health and wellness category.
If you could tell other young people one thing about why they should consider making a positive impact on our environment or society, like you, what would you tell them?
Get to time freedom as fast as possible. People want more control over how they spend their time. We hear a lot about people not wanting to work, but I don’t think that’s true. I think people want more control over where they work, how they work, and being able to walk away from situations that don’t serve them — such as how much they are being compensated for their work. Once you have time freedom you can direct your time and energy to the causes that mean the most to you; you can decide to take pay cuts, to take risks or to just help — because the tension between passion and profit will disappear. It requires you to spend some time really understanding what “enough” looks like. It doesn’t mean you don’t ever want more, or that you’ll never trade time for dollars again, but once you truly understand your needs and how to fulfill them you’ll have so much control over your life and your ability to make an impact.
Is there a person in the world with whom you’d like to have a private breakfast or lunch with, and why? He or she might just see this!
10 years from now when the fund has matured and the exits have been realized and we’ve built a firm, not just a fund — I’d love to know that I made all of my grandparents proud. None of my grandparents are living, but we’re all from pretty humble beginnings and this is the output of their work as much as it is mine.
How can our readers follow you online?
Thank you so much for this. This was very inspirational, and we wish you only continued success!
Social Impact Investors: How Kimberely Nixon of Open Venture Capital Is Helping To Empower People… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.