17 Apr What You Need to Know About the New Eileen Fisher-Backed Venture Fund
What does it take to launch a venture capital fund focused on sustainable innovation and positive change in the fashion and apparel industries – one now backed by none other than Eileen Fisher? Turns out, the lessons you’ll learn from Alante Capital founder Karla Mora and her journey launching her own investment firm are those any entrepreneur seeking to incubate any idea, build an all-star team and rally support can take to heart – and, with any luck, to the bank.
Read on for a chat with Karla Mora and listen to her story, tips and advice for FEST founders on the Spirit of 608 podcast in EP 138.
How is Alante Capital different from other venture funds?
Alante is a venture capital fund investing in innovative companies that radically improve social and environmental sustainability in the textile and apparel industry. Our mission is to make it easier for brands of all sizes to produce and sell sustainable apparel. We aren’t investing in brands themselves, but rather the resources required for them to successfully produce responsibly. In doing this, we take a circular approach to our investment thesis: investing in production, distribution and waste recovery, allowing us to support improved sustainable practices across the full lifecycle of apparel. We work closely with brands of all sizes: well known brands to new emerging brands, from the outdoor industry to luxury, and we do this to understand what their sustainability strategies are and what qualities viable innovations need to have in order to work with them. This helps us prepare our startups to launch and scale and also enables us to make stage-appropriate introductions to the brands that they are looking to sell to.
Alante Capital just had some pretty exciting news in 2018. Can you tell us about your recent growth?
We have a few new additions to the team. Analyst Jackson Scher moved from DC out to Santa Barbara to work with me starting in March, and we also just brought Eileen Fisher to the partnership. When we first were introduced to her, she came out on the How I Built This podcast and I was just so inspired by her honest, thoughtful and humble approach to everything. Going through the process of building this partnership has just confirmed those qualities even more. She’s an amazing woman and roll model and a complete pleasure to work with.
We met Eileen at a time where she was deeply considering what tangible steps she could take, personally, to back an industry-wide transformation towards sustainability. She’d been working to source responsibly with her own company for decades and knew the importance of it and the challenges. When she met Leslie and I and saw that there was an alignment in our vision, she came onboard.
What’s your average day like?
I walk down to my office at this beautiful co-working space in Santa Barbara or sometimes I’ll just work from home. I start the day looking at all my emails and chatting with my partner, Leslie, and then usually have a handful of calls with a brands, potential investors, startups that are seeking capital. Then I finally carve out some hours to either get HR and operational work done or read through industry reports and entrepreneur decks.
How did you start out your career?
I’ve always worked in impact and normally at the intersection of business and social good. Early in my career that was through non-profits or IGOs that worked to support better business practices or strengthen local economies.
One experience that shaped my future was when I worked on an initiative with the UN focused on improving business practices in the coffee supply chain. I learned I needed a Master’s in Economics. I went and did that at the University of Rome, which is the center for agriculture and food security, which influenced the focus of my Master’s in Development Economics. After I graduated, I moved to New York to work with Building Markets, and they sent me to Afghanistan. I was there to measure the impact in terms of jobs created that the organization had achieved over the 5 years they’d been operating in Afghanistan.
After working on that, I headed back to my little beach town of Santa Barbara. I was still working remotely for Building Markets while exploring the potential of starting a Oaxaca-based social enterprise with someone I had met in town. This was in 2011, 2012 and social entrepreneurship and impact investing were just becoming buzzwords. I met a man and his wife at a restaurant who were telling me that he ran a foundation in Santa Barbara that did impact investing in companies that supported people living in extreme poverty and that they were hosting an event. I went to it and picked up a book they were handing out, went to a coffee shop and read the whole thing. I then emailed the Executive Director and told him I wanted to work there. It turned out that they were hiring, so after a few months of going through interview process, they hired me. That was the start of my career in impact investing.
What happened in your career after that?
I worked at the Eleos Foundation for a few years in Santa Barbara and then relocated to San Francisco. After three or four years, I wanted to get back to my economic development roots and find a way to do impact investing in a way that would create quality jobs and healthy economies. I had also just gotten engaged, and we wanted to take a year to live in Costa Rica, where his family is from.
So in preparing for the move, I took a year and did consulting work, hoping to have remote clients that I could work for while in Costa Rica. I ran a few startup accelerators in San Francisco, and I was brought on to be the investment director for four months for a fund there. I really enjoyed every aspect of running the fund, from diligence and investing, to supporting the portfolio, managing the investors and working with the lawyers. I just loved all of it.
How did you form Alante Capital and build a team?
It was the end of 2015. A friend who worked in a co-working space with me came into my office and said we should start a fund. I’d toyed with the idea of being an entrepreneur before but never took the leap. I was about to get married and move to Costa Rica and the plan was to consult and save up a bunch of money so that when my husband and I moved back, we could buy a house and have kids, all that stuff. Starting a company and being a broke entrepreneur was not part of the plan. So I was very hesitant but for some reason, I said I’d explore it.
While in Costa Rica, my friend and I explored the possiblilty of launching a fund but ultimately decided to go in different directions. By that time, I’d been sitting on my couch in Barrio Escalante Costa Rica, reading everything I could about the apparel industry for a good chunk of 2016.
I was also consulting with Village Capital, facilitating their accelerator programs in Mexico City and loving it. One thing that so impressed me about VilCap was the way that they engaged large companies to mentor their startups, which led to not only valuable customer discovery, but created early relationships that could lead to a great deal of long-term strategic value. It was this, and what I was learning about the apparel industry, in particular, that led me to build what’s now Alante Capital.
Actually the word “Alante” comes from Barrio EscAlante – giving homage to that lonely year I spent on my couch in my pajamas thinking about this idea.
I didn’t want to be the sole owner or the boss of this company, but I wanted a partner who would be in this as much as I am. I felt that for it to work, we would have to not only be aligned in the vision, but Alante had to be a vehicle for them to achieve their personal purpose or career goal and they would need to have ownership in its success. I saw that in Leslie, and I couldn’t have found a better partner to do this with me. I trust that she’s got this, that if I disconnect she’ll keep it all going and vice versa. She’s my company co-parent.
Do you have any advice for entrepreneurs who are hoping to get people to align with their FEST missions?
If your mission is to solve a problem that a lot of people have, it shouldn’t be tremendously hard to get people onboard. The part that’s hard is getting them onboard on the strategy. It is all about listening and communication. People tend to want to say nice things or be supportive early on, but pay attention to the nuances of their reaction and ask for their thoughts. It’s good to ask people, industry expert or potential customer.
I talked to a ton of brands and a ton of investors and a ton of startups. I want to make it easier for them to have successful returns from investing in the best sustainable businesses or easier to produce and sell sustainable apparel or help them finance and grow their startups. I would explain how we plan to make it easier for them, as clearly and simply as possible, and then I listened a lot to how they reacted and how else they thought I could support them. These conversations helped shape the language we use today.
Why do you think big companies are the ones to create long-lasting impact?
It’s a lot to ask the industry to just be better if the tools to do that are few and far between, whether it’s high-performing sustainable materials, green chemistries to finish fabrics in a nontoxic way that still keep the shirt from shrinking, or smelling or absorbing water or whatever, or managing your inventory and reaching new customers without being in brick and mortars.
I personally don’t think it’s going to be the role of small, emerging ethical brands to change the industry. I think they play a very important role, but I see them more as a driver of consumption patterns as opposed to shifting the industry as a whole. They are out there proving it’s possible to produce and sell ethical apparel. They are proving consumers want this stuff. They are leaders in a big emerging trend, but it’s hard to scale a small fashion brand, and it’s not clear that all of them want to be the next Stella McCartney, Levi’s, or Nike. They might prefer to do well, grow steadily, and own their own brand.
We do think these brands are vital to the movement and so we want to make it easier for them. We look to invest in ways to support their work, through investing in distribution platforms that help get their brands in front of consumers, to platforms that help them pre-sell and make on-demand pieces or better manage inventory, to ways to drive down the cost of getting into retailers so that they can improve their margins in the stores that they are in, to investing in the materials and dyes required to make their ethical clothing.
The consumer is an important driver of ethical fashion. There has to be demand for this type of apparel, and consumers need to better understand pricing so that they don’t expect to pay $5 for a shirt. They also have to know where to find awesome ethical brands now, and these brands have to be able to compete on quality, style and price within their category, not just on being ethical.
That said, we think that production practices are an equally important driver. Our thesis is that the sustainable production of apparel needs to be mainstream. It needs to be the way that apparel is produced. To do that, we are looking to invest in innovations that can clean up the production side of the industry, and reach a scale where they can be cost competitive, making it an obvious choice for brands of all sizes to improve their business practices.
There are some truly incredible companies launching, that could really shift the industry. The innovations, as well as the eagerness of the industry to begin integrating the startup’s innovations into their supply chains have been really exciting to see.
We are essentially working with both the marketplace for innovation and the innovations themselves. We partner with established brands to understand the opportunities & requirements of scaling sustainable apparel, informing our investment criteria with evidence for practical application into the mainstream marketplace. It also enables us to connect these startups to market experts and get them valuable information that can help shape their go-to-market strategies, as well as their plans to scale. It also allows us to support them as they grow by connecting them to stage-appropriate partners along the way. This is how we are hoping to support a systems change approach to a sustainable apparel industry.
What one change in the fashion and apparel industry would make it more feasible for brands to adopt more sustainable, ethical or environmentally responsible practices?
Consumers should be happy to pay reasonable prices for apparel and not perpetuate a race to the bottom in price and quality. Brands would absorb higher priced inputs in early years of adoption, lower their lead times and relax their exclusivity expectations.
Are there any key challenges you see entrepreneurs having more than people who are working for other people? What about core characteristics that you think predict entrepreneurial staying power? Are there things that a lot of entrepreneurs who are able to keep going seem to have in common?
Entrepreneurs are a different, special breed. It is way easier to work for other people. If it’s not for you, maybe that’s a good sign you’re an entrepreneur at heart. But it’s a lot more than wanting to be your own boss.
I’ve noticed that a ton of people have ideas, but entrepreneurs who keep going are the ones with discipline, persistence and patience. They keep working through fear and doubt, and they fully commit.
It is lonely. It is hard. I definitely felt isolated and cut off from friends and non-work networks. I have always been super independent, but I know I could not have done this without my husband’s insane and total belief in me and what I was building. He was my sounding board, my only employee and partner for a long time, and he always reminded me about the reasons I should do this whenever I stopped remembering. I think finding a few people to bring along on your journey for support, who you can unload to and who really care and listen is super important. Surround yourself with other founders and entrepreneurs when you can. Get yourself a support network. Also, get out of the house and go on a hike! It’s so hard to have a work life balance at the start, and my biggest regret through all this has been not taking care of myself.
Love what Karla had to say? Hear more of her story, tips and advice for founders in FEST in EP 138 of the Spirit of 608 podcast.
Images courtesy of Alante Capital