Chicago is home to a double rarity in the venture capital world: one of the nation’s first crowdfunded technology venture capital firms, NIN Ventures, and it’s headed by a woman, CEO Nin Desai. She spoke with the Chicago Sun-Times’ Sandra Guy about starting her business, crowdfunding and what her firm invests in. A condensed transcript follows.
Question: Why did you decide to crowdfund your venture fund, and what does that say about your long-term goals?
Answer: Typical investors in venture funds are big institutions like pension funds, financial firms and university endowment funds. But we have opened our fund to investors with a minimum of $100,000 using a variety of options, like their 401(k)s, defined-benefit pension plans, digital currencies like bitcoin or a regular checking or savings account. Our mission is to truly democratize venture capital and make it available as an asset class for everyone. Why should it be just for the wealthy? I think it’s time to disrupt the venture capital industry by opening it up.
Q: Why go the crowdfunding route?
A: The financial turmoil in the stock market that started in 2008 led to a change in the way business was done across all industries. So startups sprang to life to seize a business opportunity. At the same time, venture funds that would have otherwise invested in these startups were on a decline. That’s when Congress passed the Jumpstart Our Business Startups Act that allowed crowdfunding to bridge the funding gap. The JOBS Act went into effect Sept. 23, 2013. Most people are indirectly invested in venture capital through their pension funds or other investment vehicles. Now, they can now go online and invest their money directly in companies or a fund like ours. This gives ordinary people access to the venture capital asset class, which lets their investments potentially gain a greater return.
Q: Is there anything different about what NIN invests in?
A: We invest in disruptive technology companies. Disruptive technology is an innovation that changes a way an industry functions, just like how we are changing the way the venture capital industry operates. For 2016, our focus is on companies in virtual reality, cloud computing and what we call the “fourth industrial revolution,” which is blurring the lines among 3D, 4D, digital and other smart and biological spheres.
Q: You recently won Acquisition International magazine’s 2015 CEO of the Year-Illinois award for innovation and contribution to the venture capital industry. Research by Babson College’s Diana Project on the gender gap in venture capital shows you are one of 12 women-led venture capital funds nationwide. How did you get interested in the field?
A: I come from an entrepreneurial family, and maybe that brainwashed me. [Laughs.] I was reading Forbes growing up and was one of the few women interested in finance in school. Now, I often go to conferences and board meetings and find myself the only woman among hundreds of men. I’ve become oblivious to it.
My works allows me to do something greater than myself. That’s what motivates me. Startups are the engine that drives an economy. As a venture fund, when we invest in a company, especially a technology company that is, by nature, low-cost and fast-growing, it creates jobs and, as a result, boosts the economy, whether it’s in Illinois or the United States.
Q: You have a presence at the Hero City at Draper University in Silicon Valley. Why?
A: Innovation does not bar geography. Its proximity to Draper University and next-generation entrepreneurs serves as a great source of future deals.
Q: What’s life like as a 35-year-old VC leader?
A: I work long hours but also enjoy playing piano, golf and piloting light aircraft in my spare time.