Women in VC: How Diane Yoo is Leveling the Playing Field for Diverse Woman-Owned Startups

The Crunchbase “Female Founder Series,” is a series of stories, Q&As, and thought-leadership pieces from glass-ceiling-smashers who overcame the odds and are now leading successful companies.

Diane Yoo is a results-driven entrepreneur, venture capitalist, and angel investor with more than 15 years of experience in company acquisitions and turnarounds. She is a general partner at Medingenii Capital, making her the first woman general partner for venture capital in the heart of the Texas Medical Center, the largest medical center in the world. Medingenii’s target companies are led by seasoned teams with both domain and business expertise, and Yoo is committed to the advancement of health care and investing in early-stage companies that deliver disruptive solutions to “pain points” in health care.

Diane Yoo headshot

As an accredited investor, Yoo has invested in 30-plus companies with a focus on pushing the needle for women and diversity. She has worked with consumer goods, restaurants, retail tech and medtech startups, and Fortune 500 companies alike. 

With a proven track record both as an entrepreneur and investor, Yoo is an intuitive and seasoned financial expert. She also has extensive experience in leading deals, sitting on boards and leading companies to successful exits. As a result, she has a critically trained eye for identifying and evaluating startups that have the greatest potential for success.

In this Q&A, Yoo shares why she chose to become a venture capitalist and how more diverse talent at the executive level of venture capital can help move the needle on funding for diverse leaders, as well as help the health care industry address critical health inequities.

Q: Why did you choose to enter the VC field/profession?

While pursuing an MBA from Rice Business School, I was inspired by Dennis Murphree, Blair Garrou, Aziz Gilani and Dr. Jack Gill’s venture capital classes. As an entrepreneur, I understood the pain points of fundraising and finding value-add investors, but was intrigued by the venture side of the business. I worked extremely hard and pursued opportunities to get experience in venture before starting my own firm. 

Q: What issues did you see in the VC field/profession before you started your company?

There is a dearth of women and diverse investors at the executive level of venture capital. Less than 3 percent of women are venture funded and less than 1 percent of Black woman founders. In order to level the playing fields, we need more diverse talent at the top level. 

Q: What problems were you trying to solve with your company?

At our venture capital firm, Medingenii, our sole focus is accelerating tech innovation in the health care space. COVID-19 has shed light on the disparities of health care access among underrepresented communities. Our investment team is one of the most diverse in the industry, and we keep the ethos of diversity and inclusion in mind when we make investments in the health care space to address these inequalities.

Q: In 2019, only 3 percent of venture capital was invested in female-only founded companies. Did/do you feel welcome and accepted as an underrepresented group in the VC space?

I think the more important question here is what are we doing to create more diversity and inclusion for women and diverse founders? I founded a national pitch competition that launched in 10-plus cities, which focused on women and diverse founders. Additionally, as the only female partner at Medingenii Capital Fund, I championed the addition of FemTech as a strategic investment pillar to catalyze medical innovation for women. 

Q: How did you network, find communities and make the connections you needed to succeed?

Serving as a mentor to accelerators and providing investor office hours has been a great way to serve the entrepreneurial community. For the investment community, there are multiple networks and committees to serve on. It’s crucial to understand what your competitive advantage is and how to brand yourself. Once I solidified my personal brand, I was able to strategically position myself and align my brand with other organizations.

Q: What is your advice for other female founders at the beginning of their entrepreneurial journeys?

The most important thing is to focus on pitching to the right investor that will create value add. Also, make sure to research and familiarize yourself with the investor prior to an investor presentation, so you know potential synergies and have a clear ask. Lastly, build your own powerful network of support and expertise to lean on. 

Q: What challenge are you most proud of overcoming in your career?

Fundraising during the global pandemic was indeed challenging, if not nearly unreasonable. Our fund founders are highly entrepreneurial, and we quickly strategized and pivoted to successfully and swiftly close an oversubscribed fund. I learned many valuable lessons that I will take with me for the rest of my career.

Q: Any thoughts/advice for entrepreneurs in the current economic climate?

Resilience and pivots are key. Try considering the areas that would make more sense to grow due to the challenges brought by the pandemic. Challenges can be reframed as opportunities through creativity, observance and insight.

Q: How did you connect with VCs? Can you describe your process of raising your first round?

As I mentioned earlier, the investment community is exposed to a variety of networks and committees that provides the opportunity to connect with other VCs. Our venture firm collectively has 94-plus investments, 21 exits, 100-plus advisory positions, and 11 current board seats. The relationships we’ve built in this space, plus our team expertise in both investing and medicine, lead us to successfully close our funds.

Q: What are the biggest lessons you learned from raising your first round of funding?

Have a clear understanding of investor strategy and follow through, as well as encourage other investors to invite their high-net-worth friends. This solidifies credibility and trust quickly in lieu of partners spending significant time creating each individual investor relationship.

Q: What are you going to use the new funds for?

The new fund will be used to invest further in the health care space. In the fight against COVID-19, our medical investments further validated the urgency to support innovation. Investing in health care supports a nation’s readiness for medical emergencies, and Medingenii and I plan to play a part in its success.

  • Originally published January 14, 2021