HUBgrown: Q&A with Julia Paino, Vodia Ventures

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Native Bostonian and Vodia Ventures associate Julia Paino shares what she looks for when investing in startups, and how the investor community in Boston is evolving into a more socially-conscious movement.

Julia Paino HeadshotHB: How did you join the VC world?

JP:I grew up in Concord, MA with a family of entrepreneurs – I’ve always been fascinated with the startup environment. My father is a successful entrepreneur within the food industry, and I developed an interest in that space from a young age. The world of entrepreneurship was always very appealing to me, but I was particularly interested in individuals/teams that had tremendous drive and passion, but lacked the means to finance their vision.

At the same time, I have always been extremely interested in sustainability. Before venture capital, I followed my affinity for wildlife and the outdoors, which led me to working on assignment in Alaska with National Geographic. While the work there was amazing – I flew in sea planes every day and photographed the wildlife – I really felt a big part of me, and a big part of who I had become, was centered on this entrepreneurial spirit. I felt that this was something that I needed to develop further, and I knew I had many skills and resources that I could contribute towards this line of work.

Additionally, I had interned at Vodia Capital during college, and had built out a sustainability index during my time there. When the venture capital arm of Vodia Capital was created, I found this was the perfect way to bridge my passions and immerse myself in the startup environment.

HB: What makes Boston a hub for entrepreneurship?

JP: I think Boston has become an entrepreneurial hub because of the innovative culture largely built by the universities in this city. We have some of the best universities in the world – Harvard, MIT, Northeastern, Boston University – all of these institutions have incredible entrepreneurial programs. This along with resources such as shared workspaces, incubators, and accelerator programs make Boston an attractive city for innovation.

HB: What do you look for in a company when investing?

JP: [Vodia Ventures], invests in early-stage companies. We look for a concrete idea that is well-developed and thought out. More importantly, we look for a team that is solid and cohesive. We rarely invest in a single entrepreneur – we find that going at it alone is extremely difficult and oftentimes, it fails. If you meet a team with an impressive idea, but a lack of cohesion, nine times out of ten that idea will fail.

HB: What is the biggest mistake you see entrepreneurs make?

JP: One of the most prevalent mistakes I encounter is the over-emphasis on financials. What I mean by that is entrepreneurs who are pitching us on a company or idea often say, “If we only capture 5 percent of the market…” This type of specific prediction is a red flag for us because, in reality, ideas pivot, things change and new competitors emerge. You can’t predict the exact numbers.

Instead, a more targeted way of approaching this subject is sharing concrete evidence of a corporation’s or customer’s interest in the product/idea, or specific demand in the market. Illustrating the demand is more productive for startups, rather than an unrealistic goal of success.

HB: What is your advice to companies looking to grow and impact the Boston entrepreneurial community?

JP: I would say it is absolutely imperative to understand the competitive landscape. Everyone wants to believe that their product is superior, and that they have differentiated themselves from others within the market. It’s important that the entrepreneur can speak to the specifics of other products on the market and exactly why their product is different. They need to be able to identify a current demand in the marketplace and prove that a gap exists. It’s critical to show that you understand the environment that you are penetrating in order to prove to your investors that you can compete intelligently.

HB: What changes are you seeing in Boston’s investor community?

JP: Boston, in particular, is a special place. During my time with Vodia Ventures, I have absolutely seen a shift from the “first the money, then the impact” mentality to a more mindful strategy of investing. In the industry today, there’s this movement of high net worth millennials who are exhibiting a completely different perspective and interest in what they are looking to invest in. What I’m seeing now is a wave of impactful investors – millennials looking to invest their money in ways that both generate outstanding returns and contribute in a way that affect our world positively – especially in Boston. It’s exciting to see in such an innovative city, and I’m fascinated by this community of young individuals with a shared passion for affecting change in the local economy, and the larger society.

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