Podcast Summary:

The Investor With Joel Palathinkal — Sarah Lenners: Bull City Venture Partners
Date: August 27, 2025
Guest: Sarah Lenners, Senior Associate, Bull City Venture Partners
Host: Dr. Joel Palathinkal

Main Theme and Purpose

This episode dives deep into the career journey and investment philosophy of Sarah Lenners from Bull City Venture Partners. The discussion focuses on Sarah’s path from investment banking to venture capital, the inner workings and strategies of Bull City Venture Partners, the realities of breaking into VC, deal sourcing best practices, portfolio construction, and advice for emerging managers and aspiring VCs. The discussion is both practical and inspiring, with a strong emphasis on relationship-building and the evolving landscape of venture capital.

1. Sarah Lenners' Background and Path to VC

• Education and Early Career:
  • Grew up in DeWitt, Iowa, attended Dartmouth College (track athlete, economics major).
  • MBA from University of Chicago Booth.
  • Started her career in investment banking: Deutsche Bank (NYC, real estate, gaming, lodging & leisure) and Lazard Middle Market (Chicago, consumer, food, retail sell-side M&A).
• Transition to Venture Capital:
  • Became interested in VC during business school through classes in entrepreneurship, but didn’t know a formal path in.
  • Moved to VC a year prior to the episode—hired at Bull City via a recruiter.

Quote:
"I actually always wanted to get into banking… I was more exposed to venture capital when I was in business school after I had already started going down the banking path. I didn’t really know anyone in the industry." — Sarah, [06:13]

2. Breaking Into Venture Capital

• Sarah strongly advises aspiring VCs to pursue VC directly if that’s their dream, rather than treating investment banking as a stepping stone.
• Notes that VC has less formal recruiting than banking - network, direct applications, and sometimes recruiters or aggregated job boards (like the John Gannon blog) are key.

Quote:
"If your dream is to get into venture capital, try to go right in if you can... those finance skills are helpful… but the venture end of the spectrum is very different than what I was doing in banking." — Sarah, [04:48]

3. Bull City Venture Partners: Strategy and Deal Flow

• Fund Focus:
  • Seed and Series A investor (post-revenue, post-product).
  • Focus on software, internet, mobile tech—primarily Southeast and Mid-Atlantic U.S., but flexible.
  • Investing out of their fourth fund; check sizes from $300k–$3M, reserve 2–3x for follow-ons.

Investment Approach:

• Flexible on leading rounds, board seats, or control.
• Value-add via introductions (customers, capital, talent).
• Preference for repeat founders or those with deep industry expertise—relationship and founder quality outweigh sole ‘macro thesis.’
• Portfolio is concentrated: 2 to 4 investments/year vs. high-velocity West Coast funds.

Quote:
"We like to work really hard for our companies, whether that means introducing them to customers… introducing them to capital, later stage capital... and also helping make introductions to talent as they grow and scale." — Sarah, [00:00]

• Founder Qualities:
  • Look for founders with previous cycles/experience, passion, a large enough market, and hiring skill. Recognizes the importance of “gut” and intuition due to lack of hard data at early stages.

4. Sourcing, Screening, and Managing Deals

• Sourcing Tactics:
  • Virtual demo days, pitch contests, networking with entrepreneurs and VCs in other geographies.
  • Participation in communities and groups (e.g., Women In VC, 3,000+ members).
  • Emphasizes “networking as much as you can”.

Quote:
"We're always looking for new deals, for sure." — Sarah, [24:01]
"Networking with your entrepreneurs, networking with other VCs… I frequently have calls with other VCs in other geographies that may see something great but it's not a fit for their portfolio." — Sarah, [13:02]

• Deal Screening:
  • Initial screens: US location, post-product, post-revenue.
  • Assess market size, competition, product moat, team.
  • For B2B, rely on founder to define and track key metrics; early metrics are often more qualitative.

Quote:
"I think my very first screens are that it, you know, is located in the US, looking for, you know, post product, revenue... and then you want to make sure that the market that it's going after is big enough." — Sarah, [44:00]

5. Portfolio Construction and Valuation

• More concentrated portfolios than typical ‘spray and pray’ West Coast style.
• Investing at a slower pace to maintain concentration and ability to support portfolio.
• With respect to valuation: acknowledges that early-stage valuations are set by supply and demand, and are universally high; no rigid internal benchmarks but always consider return multiples.

On Exits:

• At exit, look at industry comps to benchmark, but admits difficulty of valuation at early stage.

Quote:
"The best way that I can describe it is that it's just like a supply and demand kind of, you know, in action and a number gets assigned based on that versus based on, you know, a quantitative valuation." — Sarah, [39:52]

6. Fundraising as a VC

• Sarah joined as Bull City was launching Fund 4 and was involved in fundraising and legal formation.
• Fundraising is compared to a sales pipeline process—many meetings, little correlation between meetings and LP conversion.
• Having track record/prior investor relationships is critical; first-time funds faced special challenges during COVID.

7. Navigating Team Dynamics & Investment Conviction

• Acknowledges the challenge of managing team consensus and the “FOMO” (fear of missing out) from competitive deals.
• Recognizes importance of both conviction and flexibility to be challenged by peers.
• Community and network are essential for collective wisdom and risk assessment.

8. Advice for Aspiring VCs and Emerging Managers

• Build a network and pay it forward—one of Sarah’s core messages.
• Do not be afraid to reach out cold (e.g., via LinkedIn); personalize approach and demonstrate genuine sector interest or value-add potential.
• Produce investment theses or sector reports to demonstrate initiative (but don’t “fake it”).

Interviewing for VC roles:

• At Bull City, the interview process was broad and less technical than banking; sector specialization isn’t required unless fund is sector-driven.
• Have a clear thesis and a good answer to “why venture capital?”

9. Diversity and Women in VC

• Sarah is part of Women In VC, observes more inbound from female founders as a result.
• The podcast touches on evidence of strong results from women fund managers and diversity overall, including mention of Harlem Capital and Gaingels.
• Endorses the value of affinity and professional networks for sourcing and support.

10. Investment Structure & Returns

• In early stage VC, returns for investors are only generated at exit (no cash flow “dividend” structure).
• Early-stage companies should reinvest cash—not pay out, unlike in private equity.

Quote:
"If they're free cash flow positive, are you going to take dividends? No, you would want that cash to stay in the business so the business can use that cash to grow..." — Sarah, [54:46]

Notable Quotes & Memorable Moments

• Networking as Destiny:
  "Try to meet as many people as you can. Network. That will come in handy." — Sarah, [51:31]
• On Venture's Uncertainty:
  "You only know if you're right probably like seven years from now… and you also don't know if you're wrong until many years later too, if you missed one." — Sarah, [16:21]
• On Sourcing:
  "Virtual demo days, pitch contests... Networking with your entrepreneurs, networking with other VCs..." — Sarah, [13:02]
• On Paying It Forward:
  "Always trying to help when people reach out, you know, pay it forward. Because I think that always does come back to benefit you." — Sarah, [51:31]
• On Portfolio Construction:
  "We're kind of backing the jockey vs the horse... our portfolio is a little more concentrated than what you'd see on the West Coast." — Sarah, [09:17]

Timestamps for Important Segments

• [02:40] — Sarah’s upbringing, education, and career journey
• [04:48] — Advice on entering VC and career paths
• [08:52] — How Sarah landed her role at Bull City Venture Partners
• [10:00] — Bull City’s investing strategy and fund characteristics
• [11:32] — Sectors of interest and fintech focus
• [13:02] — Sourcing deals and value of networking groups
• [15:00] — What to look for in founders
• [17:18] — Navigating team differences, conviction, and FOMO in investing
• [19:49] — Best practices in deal flow management and fundraising
• [24:01] — Sourcing tools and tips
• [28:35] — How to effectively reach out to VCs and stand out
• [32:17] — What VC interviews are like and how to prepare
• [35:04] — Diversity in VC, women-led funds, and observations
• [38:03] — Banking skillsets transferable to VC
• [41:26] — Regional and stage-based valuation considerations
• [44:00] — How Sarah screens decks and B2B KPIs
• [48:58] — Parallels and differences between banking and VC
• [51:31] — The importance of networking and paying it forward
• [54:46] — Returns structure: why early stage VC doesn’t do dividends

Closing Takeaways

Sarah Lenners’ path demonstrates the non-linear and relationship-driven nature of venture capital. Her practical insights touch on the importance of network, due diligence, founder quality, and the nuance required in deal sourcing and selection. The episode is rich in actionable advice for those looking to break into VC, operators considering the transition, and anyone interested in the evolving strategies of regional VC funds.

Endnote:
"Try to meet as many people as you can. Network. That will come in handy." — Sarah Lenners, [51:31]