Sheila Gulati grew up in tech.
Her parents started a software company in her childhood home when she was 8. Being around tech so early in life gave Gulati experience that would propel her career.
“I’ve done every single job in a software company,” Gulati said. “Back in the day when we made actual 3.5 disks, I would make the software that would get sent to customers. I would test software. I would write software manuals.”
Gulati is the co-founder and managing director of Seattle-based venture capital firm Tola Capital, which launched in 2010. The artificial intelligence-focused firm has invested in the employee experience platform Simpplr and the website-building tool B12.
In November, Tola Capital raised $230 million for its third fund. The firm has raised $688 million in total.
The Business Journal sat down with Gulati at the Tola office in the historic Ward House overlooking Capitol Hill. The room featured standing desks for both Gulati and fellow Tola co-founder Stacey Giard, a stack of books that includes “AI 2041” and a stuffed elephant Giard’s mom gave Gulati. The conversation touched on Tola’s focus, Gulati’s career and her aversion to coffee.
What’s new after landing $230 million?
We’ve done lots of investments already into the new fund. As you think about the way that people work and the change that is happening already and continuing to come on, that is just massive. And that’s exciting. There are absolutely new markets being created and new markets being disrupted. Hopefully all of it leads to a huge increase in productivity.
How do you see the venture capital market rebounding from this dry environment?
The VC market is cyclical, and it should be vis-à-vis interest rates. Interest rates are a major determinant in cost of capital. Stacey and I have always talked about efficient companies that are good growers. ... The dry spell isn’t that dry. Companies will always ask me can I raise now? Do I have to time this? Great companies don’t have to time the market. They don’t have to time their fundraises.
You worked at Microsoft for about 10 years before launching Tola. What made you decide to start your own venture capital firm?
Cloud, data and mobile. The innovations that were happening. We had just launched Azure. That platform was a sea change of how computing would work for enterprise.
Do you still help with your parents’ software company?
I’m on the board of my dad’s software company. Trust me, once he finds the free labor, he’s not going to let that go.
Do you ever butt heads with him?
Generally no, but occasionally. We have a CEO that runs that company who is profoundly good. Usually if there is a disagreement between my father and I, he will pick the side, and that’s the side that wins.
About Sheila
- Title: co-founder and managing director of Tola Capital
- Hometown: New York City
- Residence: Capitol Hill. “I don’t have a car.”
- Education: Bachelor’s degree from Georgetown University
- Favorite book you’ve read in the past year: “Born in Blackness”
A day in the life
We asked Sheila to break down her typical workday:
- Early morning: Rise generally before 6 a.m. to start the day with meditation and light yoga. Follow this up by checking email and messages, news, then start calls, especially with European and East Coast companies.
- Morning: Walk into the office listening to an AI or economics podcast. Attend back-to-back calls and meetings with the team, portfolio companies, potential new founders and enterprise software deep thinkers.
- Lunch: Usually spent with founders, the Tola team and other colleagues at places within walking distance from the Capitol Hill office.
- Evening: Head home for dinner and time to relax with family and friends. Wrap up work, prep for the next day, get some reading done, and then get to sleep early (“I’m a big believer in getting lots of sleep”), ideally by 10 p.m.
What was the hardest part of getting a VC firm off the ground?
I didn’t know all the steps involved when I started. It was learning as we go along. For Stacey and I, each piece of it was new to us, which allowed for both a reinvention of how we thought about it because we haven’t worked in venture before. I think that can be a good or a bad thing. ... Like any entrepreneurial journey, each step you take unveils what comes next.
When did you feel like you made it?
I’ll let you know.
Were you ever tempted to throw in the towel?
No. A lot of things get fixed by more work. I’m not a person who considered throwing in the towel from that perspective. ... Stacey and I often say, “Make different mistakes.” It’s a nice phrase to be able to use with your entrepreneurs and your CEOs as well. People make mistakes, but let’s make different ones.
What’s the most important lesson you’ve learned?
Be on the teams you support. Actually show up to be on those teams and show up to be part of these companies in a real way.
How do you find companies to support?
We’re hypothesis-pivoted in terms of scenarios and areas that we want to invest in. We debate them as a team in that conference room. ...We sit around and debate different areas that we think are interesting and ripe for disruption and innovation but that also have real business capability around them.
What are those meetings like? Lots of coffee?
You don’t want to give me coffee. We do a lot of whiteboarding. I think that ideation together and taking investing and making it a team sport makes it much more interesting. You’re able to get rid of preconceived notions and bring in different data points. Bring in different lived and work experiences.
What do you mean I shouldn’t give you coffee?
I’m super caffeine-sensitive. It’s surreal on coffee. If I really had to do more work than I could possibly do without caffeine, then I’ll drink coffee, but you probably don’t want to be around me.
What is something most people wouldn’t know about you?
I read a lot. I love traveling and being outside.
What’s the best place you’ve traveled in the past year?
Namibia.
What were you doing there?
Hiking sand dunes.
This interview has been edited for length and clarity.
