‘Women are the true unicorns’: This millennial investor is breaking barriers in venture capital and betting on female founders

It didn't take long for Pocket Sun to realize that entrepreneurship can be a lonely journey — even more so for women. 

She got her first taste of that in 2014, when she was at the University of Southern California studying for a master's degree in entrepreneurship and innovation. 

"One class I was taking was [about] venture capital and our professor was super well connected," she recalled. 

"He brought in CEOs and VCs every week to speak to us and I remember asking on the first day, [are] there going to be any female speakers? And he's like, 'Maybe. There are very few of them.'" 

By the end of the semester, there was none, Sun told CNBC Make It in a virtual interview. 

"That was when I realized, wow. Women are the true unicorns in this venture capital world." 

She was born in China and moved to the United States when she was 18, then started SoGal in 2015 when she was 23. It started off as a community group that supports young female entrepreneurs. 

"It was … born out of my own pain point of not seeing enough women in the entrepreneurship world. I felt incredibly isolated and like an outsider," the Forbes 30 Under 30 honoree added. 

But eight years later, SoGal is more than just a safe space for likeminded women. It is now SoGal Ventures — a VC that invests in early-stage startups in the U.S. and Asia, and all of them are led by women or entrepreneurs of diverse backgrounds, Sun said. 

Its first $15 million fund was used to invest in 42 companies, which have since created a total of $7.8 billion in market value, said Sun, who is also SoGal Venture's managing director. 

In a venture capital industry where women make up less than 15% of check-writers, Sun stands out.

The 31-year-old shares with CNBC Make It why it's worth betting on female founders and what success means to her. 

Sun decided to start her own venture capital fund when she realized that women founders' biggest pain point is "lacking capital to grow."

But when she decided to take matters into her own hands, she faced the challenges that female entrepreneurs often would, such as not being taken seriously. 

She said, "Because the majority of the power and assets are managed and controlled by men … people didn't understand, why would you invest in women? Is that even a thing?"

"I remember so clearly in New York at this investor meeting, [a male investor] was sitting across from me and he said, 'Investing in biotech is a thesis. Investing in women is not.'" 

That meant that for the first few years, Sun and her co-founder had to overexplain themselves in boardrooms. 

"Because we didn't have much of a track record … we had to really give them the whole macro background on why venture capital as an asset class? Why invest in women? Why invest outside of Silicon Valley? Everything needed explanation." 

Even now — when SoGal Ventures has built a track record for itself with five unicorns under its belt — expectations still feel like "a moving bar," Sun said. 

"Now, a lot of limited partners are like, 'Your track record is not that important. We want to see what's repeatable? What's your secret sauce that will carry you through different funds?" she added. 

"Sometimes I feel like if I were a man, my fund would be oversubscribed right now." 

Yet, Sun sees being underestimated as a "unique gift" and a challenge she would not trade for an easier journey. 

"I get better every day because of it. Investors have gotten more educated about the importance of things like gender equality and diversity in mind," she added. 

"[Now] we just need to explain: We're investing in women ... How are we doing it best? And we let the numbers speak for themselves."

Even so, companies founded by women are still receiving just 2.5% of all venture capital investments, according to PitchBook data.

"Women are an underestimated, underfunded group — and that is across different stages," said Sun. 

"If you look at the earliest stage, if it's a woman founder with an idea, it's very unlikely she will get funded. She will need a lot more proof points." 

Part of Sun's role as an investor and entrepreneur is to encourage founders in her portfolio to dream bigger. 

"Very few women growing up would have thought, I'm going to be a fabulous CEO, or I'm going to make so much money. That is just not part of how we grew up," she said. 

That sometimes translates to "pessimistic or less aggressive" outlooks and projections from female founders, Sun added. 

"I think a lot of women want to be more conservative, and they want to be able to deliver on what they promised … [but] there's a balance between being over-confident and optimistic."

But female founders, who've always had to be "capital-efficient" to survive, now have the chance to shine as the era of easy money comes to an end.

According to research by Boston Consulting Group, startups founded and co-founded by women were "significantly better financial investments."

"For every dollar of funding, these startups generated 78 cents, while male-founded startups generated less than half that — just 31 cents," it found. 

Women didn't choose to be capital-efficient, however — they were "forced to be," Sun said. 

"In this environment, it's not a bad thing. They've been prepared. They know how to preserve money. They've always known that like the back of their hands." 

While the roadblocks and challenges persist for female entrepreneurs and women-led VCs, Sun said she has learned to look at success differently and enjoy the process. 

"I started SoGal when I was 23. There was this naivety and this feeling of, 'This is going to be my life's work and I need to rush'," she said. 

"Almost eight years later, I look at it a lot more peacefully. I can do things at my own pace." 

Sun added that she used to measure success based on whether she could raise "that $50 million or $100 million" she wanted. 

"But now, success is when I feel good about what I do every day. I don't have to doubt if I'm doing the right thing. I feel good about relationships around me," she said. 

"That's my measure of success now. And I think I'm doing pretty well with that."

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