Sturdy will become one of the only women to lead a major venture firm.
(Bloomberg) — Laela Sturdy is taking over as managing partner of Google’s growth investment fund CapitalG after leading its high-profile bets into companies like Duolingo and Stripe Inc. The move will make Sturdy one of the only women to lead a major venture firm, years after the industry said it would do better on promoting women and investing in women founders.
David Lawee, the founder of CapitalG, is stepping back from the role as managing partner effective Wednesday, and will stay at the firm during a transition period of several months. Lawee, 57, is in the process of stepping off his board seats, except for Lyft Inc., where he will stay on as an independent director, CapitalG said.
CapitalG is an independent investment firm backed by Alphabet Inc.’s Google, and has established itself as a powerhouse for investments in late-stage startups, meaning relatively mature companies. Its portfolio companies also include Airbnb, as well as Lyft and Stripe. CapitalG has taken a targeted approach during its decade-long existence, with just 55 investments. In an interview, Sturdy said she plans to step up that pace.
Many of CapitalG’s top investments were spearheaded by Sturdy, 45. She led Gusto’s $60 million funding round in 2015, when the payroll-services company was worth $560 million. At its last fundraising, Gusto was worth almost $10 billion. She also led language education app Duolingo’s $45 million funding round in 2015, when the company was worth $470 million. At its initial public offering in 2021, Duolingo was worth $6 billion. And she led a funding round for payments processing giant Stripe in 2016. Stripe is now one of the world’s most valuable startups, even after its discussions to raise money at a lower valuation.
Sturdy’s Silicon Valley career started at Google in 2007. She worked in leadership roles on the company’s emerging businesses team, on products including Google Offers and Adwords Express. Claire Hughes Johnson, a then-colleague at Google who later became chief operating officer at Stripe, introduced her to Lawee. Lawee spent several years making acquisitions on behalf of the tech giant.
Within months of creating the new firm in 2013, Lawee hired Sturdy to work on CapitalG. It was founded years after Google’s other venture firm, Google Ventures, now called GV. While GV backs early-stage private companies, CapitalG’s mission is to invest in startups in their later stages and to write bigger checks, typically at least $50 million. It also occasionally backs public companies.
At CapitalG, Sturdy says she leaned on her operational experience launching new products within a larger company. “I had helped start a lot of businesses for Google in that way,” she said. Sturdy worked with Lawee and Gene Frantz, another partner and an alumnus of TPG, to learn about the finance side of the venture business, studying companies poised to go public and “how to think about multiples and how they would trade,” she said.
Before long, Sturdy had some hits. Those included UiPath Inc., a startup she backed that went public in one of the largest IPOs of 2021. CapitalG’s $160 million investment in UiPath turned into $2 billion, the firm said.
It’s extremely rare for a woman to be promoted to lead an existing venture capital firm. Many of the women in VC leadership left existing firms to start their own venture businesses. Examples include Katie Haun, formerly of Andreessen Horowitz, who started Haun Ventures; and Mary Meeker, formerly of Kleiner Perkins, who started Bond.
Sturdy said she considered the various career paths available in the industry, including starting her own firm. “Of course I weighed options along the way,” she said. “I think I’m in the best place for me, and I’m in a place where I think we can make a really big impact.”
One advantage to CapitalG: skipping the chore of fundraising. Unlike most firms, which raise funds from foundations, pension funds and wealthy individuals, the $4 billion CapitalG has deployed over the years came from Alphabet alone.
Alphabet also helps in other ways. When Duolingo Chief Executive Officer Luis von Ahn was preparing to generate revenue from his app, Sturdy connected him to Google’s own subscription and advertising experts, among others. While other venture firms sometimes hire consultants to guide founders, Sturdy said it’s more efficient and can have a bigger impact if the experts are in-house.
“The Googlers love to do it because it’s really fun to get introduced to an exciting startup and to meet that team,” she said, adding that that the company’s vast network of employees was a “huge advantage.”
Over the years that Sturdy has worked at CapitalG, the venture industry has grappled with a lack of gender diversity. A decade ago, former Kleiner Perkins partner Ellen Pao filed her harassment and retaliation lawsuit against that firm. Although Kleiner Perkins won the lawsuit, it exposed a larger problem of poor treatment for women at the firm and in the technology industry in general. In recent years, many in the industry have vowed to do better. Still, women represent just 16% of venture firms’ decision-makers, according to data compiled by research firm PitchBook.
“There are some amazing (women) investors out there,” and many people working to boost women’s roles overall, Sturdy said. One of her more recent investments, Chief, is a member network aimed at supporting women in leadership positions. “I’m excited to see what everybody can keep doing to help each other,” she said.
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