January 28, 2020

#15 – Soraya Darabi, co-founder and managing partner of Trail Mix Ventures

On this week’s show, Joe Vennare is joined by Soraya Darabi, co-founder and managing partner of Trail Mix Ventures. This episode covers a lot of ground and is especially impactful for early-stage founders and companies seeking to attract venture funding.

Digging in, Joe and Soraya discuss:

  • The Trail Mix thesis of “Investing in the future of living well”
  • What’s working and where the whitespace is in wellness
  • A step-by-step guide for founders looking to start and raise money for a company in the wellness space

Check out an overview of the conversation below or listen to the entire episode for more.

What is Trail Mix Ventures?

SD: Trail Mix Ventures is an early stage fund focused primarily on what we call the future of living well which encompasses three very large addressable markets. 

First and foremost is wellness. We also focus on primary care and the care economy, which includes everything from pet care to childcare, to elder care, personal care, and healthcare, the biggest of the markets. Last but not least, we invest in the future of work as it pertains to wellbeing at work.

What do you look for in companies and founders?

SD: We get excited about companies that touch one, two, or all three of these different verticals at once. 

We’ve built Trail Mix to be a platform for founders who care not only about building the next big billion dollar startup, but who are inherently purpose-driven. We look for founders who think about the future of wellbeing as it pertains to the next 20-30 years. We want them to build long lasting brands that are sustainable and focused on what we think really matters.

We prefer founders who are taking Mars shots over Moon shots and who have the perseverance to make something as demonstrably large as it could be. But, that’s not at the expense of integrity or the core values in which we all believe.

How do you source deal flow? 

SD: If you’re an investor, there are many different ways in which you can source deal flow, but everything comes down to sort of a mathematical equation as to whether or not a company’s worth backing. 

While we are quant focused, we also believe early stage venture has a high level of relationships involved. As long as you give more than you take in this industry, good opportunities should come back to you in fold.

We also believe this is a marathon based industry. For example, with Parsley Health, there were 13 years of cultivating that particular relationship.

In the case of Kind Body, we looked at about 30 different fertility startups before finding the one that we just felt made the most intuitive sense. But again, relationships played a large factor in our ability to become investors.

What advice would you give an early stage founder?

SD: Building long term relationships is very important. 

When doing so, know your audience. Whether you’re meeting with a VC or a fellow founder, it’s okay to share your idea. If it’s a complicated idea to execute on and you think you can execute on it best, then don’t worry so much about other people stealing your idea and running with it because that won’t be genuine and it’ll be hard for them to pull off. But if you share your idea with a bunch of folks you think are smart and simply ask for feedback, you’d be surprised at how much they’re willing to give you in return.

My second piece of advice is that not all businesses are meant to be venture backable. A lot of businesses are really great ideas. And if you’d like to make a lot of capital in the short term doing something you love, then consider making it a side hustle to start.

We see too many business plans that are half-baked at best that really shouldn’t ask for venture capital. Receiving a lot of capital for an idea that has a shorter time horizon puts unnecessary pressure on the founders to scale at a speed that they’re not able to.

What fundraising advice would you give a founder? 

SD: If you’ve validated your proof of concept, created a beta, perfected your business plan, and you have a wellness focused startup that absolutely deserves venture, then the best thing you can do is write a thoughtful email to the people that you’d like to advise you or invest in you. 

Cite certain investments they’ve made or certain companies they’ve worked on that feel analogous to what you’re building. Keep the email short but thoughtful and then make sure to include that you’re going to follow up not next week, but in a month’s time if you don’t hear from them. 

I always give things a rule of three. If you’ve written someone twice and they haven’t responded, persevere and try one more time, because just through that dedication you might get exactly what you want. 

And, I often say that business plans have their own product market fit. If you put together a business plan and sent it to 10 investors and none of them are showing enthusiasm, it could be that your business plan doesn’t have a product market fit with what those VCs want. It’s important to study up on the investors to whom you’re pitching to make sure they don’t have anything in conflict in their existing portfolios and making sure your idea is timely to them.

What white space do you see in the wellness landscape?

SD: First, I think the term wellness needs a makeover because we are over-indexed and bombarded with pitches for the category. We prefer to use “the future of living well” because it focuses on not just the superficial elements of wellness, but rather how we live happier, healthier lives.

As far as future opportunities, we’re keenly interested in telehealth as it pertains to addiction. We think sometimes for-profits can be as effective if not more effective than nonprofits in solving particular epidemics.

We’re also interested in AI in healthcare because there’s so much data to compress in society and the right minds can literally cure cancer if they’re put in the same room at the right moment in history. 

We’re interested in robotics in healthcare as well. We think robotics and VR can be additive in the surgery room. We’re excited to see statistics go up and to the right in terms of success from said surgeries because of complementary hardware or technology. 

Lastly, we’re particularly interested in food as medicine. The arena is so massive. Beyond Meat is just scratching the surface of what’s possible.

**Note: Soraya’s answers have been edited for brevity and cohesion.

About Soraya Darabi: 

Soraya Darabi began her career as Manager of Digital Partnerships and Social Media at The New York Times, and went on to co-found Foodspotting (acq. by OpenTable) and Zady. Soraya made Fast Company’s Most Creative People, Inc.’s 30 Under 30, and Fortune’s 40 Under 40. She was twice named a Mentor of the Year by TechStars, is a YGL at The World Economic Forum, and serves as a NY State Trustee for The Nature Conservancy.

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