Hi there,

Today, I’m equal parts excited and nervous to share with you a conversation with Hunter Walk — a venture capital investor I respect a ton — about why he passed on leading Ethena’s seed round.

Yes, you read that right. HE PASSED. Rejection is hard. Acknowledging rejection and then working through it (in public, no less) is even harder. But, it’s also how we learn. Thank you, Hunter, not only for investing a small check in Ethena and being in my corner, but for being willing to talk with me about this. It takes vulnerability on both sides.

Without further ado, our conversation:


To open up with a softball, why’d you pass on us?

HUNTER: As you know from our now two+ years working together, I hold you and Anne in such high regards as founders, humans and friends. And each time I write another check into Ethena, at a higher price (four times total), I’m thrilled to continue the commitment together. Thinking back to your initial fundraise and why we didn’t lead, there were two open questions that Satya and I couldn’t resolve in the moment. First was the ‘market size,’ which I believe has now been put to rest – ie you were correct. Second was our preference, especially in SaaS, to have someone on the founding team with ‘go to market’ experience. Anne was going to be a pretty killer CTO – that was clear (and we had already backed founders who knew her from undergrad and attested to the fact she was special). You? I was obviously incredibly impressed by your background and our conversations, but can you do founder-driven sales for your first 1-2 years? Did you learn sales & marketing on someone else’s dime or would Ethena’s early years be you finding your footing? We basically came away feeling like there wasn’t going to be a consensus answer on our end quickly enough to be the right lead. But there was a set of “somethings” that made us not want to say ‘no’ completely, hence the supporting check. And a desire on my end to be point-for-point the most useful ownership on your cap table.

ROXANNE: It’s both fascinating and, tbh, a little hard to hear that I was the question mark. But it’s also very valuable to know because in my mind, my experiences mapped on closely to what I needed to do as CEO; but I didn’t make those connections clear to you. Anne and I are women. VCs don’t fund women nearly the same as they fund men. I feel like it’s worth addressing the idea of pattern matching within VC. I’d love to hear how you think about pattern matching, biases, and anything Anne or I did that either fit or broke a pattern?

HUNTER: We’re big into founder <> market fit – ie are these the right founders for the problem they’re trying to solve. In that case, from a pattern matching perspective, you two were off the charts from the first time we met, and this basket of ‘fit’ reasons included your genders (in the sense that your own experiences, perspectives, and credibility validated to me that talent and customers would gravitate towards Ethena). I guess this is a double-edged sword because perhaps some VCs thought “oh isn’t it nice that these female founders are working on sexual harassment training” in a way that’s trivializing or pandering. Homebrew has typically funded female founders at 4-5x industry averages, but we strive to a higher standard which is: does every founder who pitches us feel respected during the interaction, independent of outcome. And I hope you and Anne did! Anecdotally, I hold military officer service in very high regard, but probably also overgeneralize what it says about someone to ‘they work hard, are ethical, can manage teams well, are no bullshit, and so on’ but, per earlier, my pattern matching blindspot was ‘will this translate to sales and marketing success?’ You tell me: Are you an exception to that rule or do military officers generally make great SaaS CEOs?

ROXANNE: This is fascinating and deserving of its own article. I have nuanced thoughts about what parts of military experience help me as a tech CEO and what habits I’ve had to unlearn. So my immediate answer is, “it’s complicated.” In the military, there’s a culture of downplaying your personal role in success and instead emphasizing your team. And there’s a real disdain for people seen as showboaters. This has been hard for founder-me because self promotion and company promotion are crucial parts of the job. Do you have any advice for people like that? Should they put on a persona?

HUNTER: They should be the best version of themselves, and realize that “sales” is going to be one of their jobs forever: to investors, to customers, to employees, to press. To be the “best version of themselves” in these situations you do sometimes need to get yourself into an uncomfortable zone, but you shouldn’t ever compromise your values or beliefs. In terms of advice, trying to practice your pitch with other founders and/or investors, even if they’re not that familiar with your industry, will get you some feedback. Also once the process is going, see if similar questions or concerns come up often and work to proactively address them.

Investment doesn’t always equal dollars

It turns out, investing can come in a few forms. Yes, a check with lots of zeros is one. (I’d be happy to provide Ethena’s mailing address.) But, a willingness to be honest about rejection and areas of potential growth is also a kind of investment.

So, even though 5% of me is still bitter, I’m thankful for this chat with Hunter. And the other 95% of me suggests you follow him on Twitter and read his stuff, because he’s pretty darn insightful.

As the “no” flies

The next time you face a “no,” by all means, let the emotions run freely. (My toddler has a few tips for you, if you need them.) But, after the sting wears off, that’s when it’s time to dig in and ask the hard questions because those moments can teach us a lot.

Thanks for chatting with me today,
Roxanne Petraeus
CEO & Co-founder, Ethena