Caroline Winnett On Selling A Company To Nielsen And Now Helping Raise $84 Million To Support Upcoming Entrepreneurs

Caroline Winnett’s story is nothing short of extraordinary—a journey that weaves through disciplines as diverse as music and neuroscience, culminating in a successful career as a serial entrepreneur and now, a prominent figure in the venture capital community.

Caroline’s company SkyDeck Berkeley is the investment arm of UC Berkeley’s flagship startup accelerator.

In this episode, you will learn:

• The rigorous discipline learned as a professional violinist translated directly into the daily grind required to build and scale a startup.
• Coming from a family of entrepreneurs instilled a natural inclination towards founding and scaling companies.
• Transitioning from a successful career in music to entrepreneurship required courage and a willingness to take risks.
• NeuroFocus revolutionized marketing research by applying neuroscience to understand consumer behavior.
• Co-founding with her husband at NeuroFocus showcased the importance of trust and complementary skills in startup success.
• At Berkeley SkyDeck, Winnett combines her passion for startups with a mission to support Berkeley’s public education initiatives.
• Today’s fundraising environment demands a balance of caution and strategic investment, focusing on solving specific pain points with well-understood solutions.

 

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About Caroline Winnett:

Caroline is the Executive Director of Berkeley SkyDeck, UC Berkeley’s flagship startup accelerator.

At SkyDeck she leads a program that hosts over 200 companies per year. She recently launched the Berkeley SkyDeck Fund, a $25 million VC fund investing in SkyDeck startups that shares half of fund profits with UC Berkeley.

Prior to BerkeleySkyDeck, Caroline was a serial entrepreneur. She co-founded the pioneer company in the neuromarketing industry, NeuroFocus, which was acquired by Nielsen in 2011.

Before her career in startups, Caroline was a professional concert violinist. She is a recognized speaker on startups, accelerators, and consumer neuroscience. She is an angel investor, startup Advisor, and Board member.

Caroline received her MBA from the Haas School of Business at UC Berkeley. Her undergraduate studies were at Brown University and she earned her Violin Performance degree at the Indiana University School of Music.

In her spare time, she likes to read books on startups, play the violin, do the occasional Ironman triathlon, ski as fast as possible without crashing, and scuba dive.

Connect with Caroline Winnett:

• LinkedIn
• F6S
• Crunchbase
• FastCompany

Read the Full Transcription of the Interview:

Alejandro Cremades: alrighty Hello, everyone, and welcome to The Deal Maker Show. so Today we have another exciting founder joining us, you know incredible incredible story, you know incredible um you know path and and and career. you know She’s done it multiple times and very successfully so. you know The full thing, you know building, scaling, financing, exiting, We’re going to hear about it and also about the way that she’s now giving back to the venture community, which is a really remarkable. So again, brace yourself for a very interesting conversation, a conversation where we’re going to be talking about

Alejandro Cremades: What were some of the lessons learned from becoming a professional violinist and then you know how that was applied to become a successful founder? Also, some of the things that she’s learned from coaching, tons of founders and some of those trades, you know fundraising trends too, because i mean there’s obviously Lots of cycles that we’ve seen with COVID after COVID, now what’s going on with the elections coming up. So there’s a lot there you know to be learned and a lot to be discussed. So without further ado, let’s welcome our guest today, Caroline Winnet. Welcome to the show.

Caroline Winnett: Hey, Alejandra, great to be here.

Alejandro Cremades: So originally from Berkeley, you know born and raised there in Berkeley. So give us a walk through memory lane. How was life growing up over there?

Caroline Winnett: It was really fantastic. I i was born in the 60s and I was very young. So i i I wasn’t able to fully participate in the 60s, but I was able to to catch the vibe of Berkeley. And that is, as everyone knows, question the status quo. Do we have to do things the same way? Can we think differently? And that vibe is still here in Berkeley after all those years, and it certainly is is a big part of what startups do. So it’s a great environment for startups, and I love it here.

Alejandro Cremades: So you ended up going to Brown. And eventually, you didn’t have the kind of like the the the outcome of what you were hoping for, because all of a sudden, you know you decide that you got the calling for music. So so how did this happen?

Caroline Winnett: Well, I started playing the violin when I was a wee little girl of six years old. And I also thought it would be a hobby, um which it ended up being, but I did take a detour in college to really study it seriously. so i So I left Brown thinking I would just do a year at a conservatory, but it was such a fantastic place. I ended up graduating from there and and did a lot of practice, which which has served me well in my life, I must say. The discipline I learned, becoming a professional violinist, there’s really nothing harder.

Alejandro Cremades: you

Caroline Winnett: There’s nothing that requires more discipline. There’s a lot of things that require discipline, but playing the violin is is is up there. um So I became a violinist, always thinking, you know, I really, I love business. I’ve always loved the idea of creating ventures And so i after I played professionally for a few years, I applied to Berkeley. It’s in the MBA program and they remarkably let me in because I had no business experience. But they took a chance on me for which I am now able to help pay back that that wonderful chance they gave me by being at Berkeley and giving a chance to many entrepreneurs. so So it’s a wonderful full circle of my life.

Alejandro Cremades: And obviously, you know like came you went to Berkeley, you got your MBA, and then that was kind of like the um the segue into entrepreneurship.

Caroline Winnett: Okay.

Alejandro Cremades: I guess before ah going into that, I’d like to ask you, what do you think? Because you you just talk you you just we we just touched on it, which was playing the violin and and how you were doing that since you were six years old. How do you think that you know also becoming a professional at it, you know performing for an orchestra as well, How do you think that has given you perspective, or how do you think that has helped you to to become, you know over the years, a successful entrepreneur, too?

Caroline Winnett: the discipline without question. It’s the discipline that it taught me. You can’t not, I’m not going to practice this week. I’m just going to practice more next week. No, you’ve lost that time. You have not progressed. You cannot get it back. It is the same thing with the startup. You can’t say, well, I’ll just slack off for a few days or go a little bit slower. You’ve lost that time and your startup slows down and you have to have that daily attention to your young growing company the same way you must train your muscles and your brain to play an instrument daily. And if you don’t do that, you won’t succeed. So that was the most important thing I learned from being a violinist.

Alejandro Cremades: So then let’s talk about a finishing up the MBA program and and becoming an entrepreneur. entrepreneur you know How did the whole idea of um of entrepreneurship come knocking you know on your door?

Caroline Winnett: Well, it was always there. So I come from a family of entrepreneurs. My father was an entrepreneur. My grandfather was an entrepreneur. There’s some others scattered throughout the family. So it was always in my DNA, I think. And I always knew I i would do something in starting companies or or certainly working with young ventures. Big companies wasn’t my thing. at that year when I went and got my MBA. The hot thing was going into consulting or investment banking. It still kind of goes, but that never attracted me.

Caroline Winnett: so When I graduated from the MBA program, I worked for a very small company doing recycling plans, which was which fascinating and interesting. Then I had children, so I wanted to do something that didn’t require my entire full life dedication. So I took over my family’s publishing business after my father retired. And that was a great experience, running that small company, and then I got it acquired. So I took care of my parents’ retirement

Caroline Winnett: And after that, my kids were a little settled and it was time to do something interesting that really was going to be one of those zero to one companies. And at the time I was married to ah another Berkeley alum, an engineer. He came home one night and said, hey, I have this idea. Why don’t we put EEG headsets on people, measure their brainwaves and turn that into insights for marketing and branding. And I went, that sounds nuts. That’s a crazy idea. Where did you get that idea? But we started talking about it. And the more we talked about it, the more it sounded like actually a fabulous idea. So that was the creation of Neurofocus, which then was my big ride, zero to acquisition in five years, um zero to 25 million in revenue in five years, an acquisition by the Nielsen Company,

Caroline Winnett: And that that whole journey and along the way, of course, doing what many entrepreneurs end up doing, which is putting their entire life savings, all of their time, their energy, all of their hopes and dreams, pushing on a big pile of chips and putting it in the middle of the table and saying, I’m all in on this bet. And that’s what we did. And we we worked hard and we had a little luck and it paid off.

Alejandro Cremades: So for the people that are listening to get it, what what ended up being there, the business model of neural focus?

Caroline Winnett: So it what we were replacing, even though we were a brand new thing that didn’t exist, which was EEG headsets, measuring brainwaves for marketers, who had ever heard of that? ah But what we were doing was replacing traditional copy testing where people, brands would test ads. So we started out doing that, testing ads and messages and and actually actual products ah one by one. We actually had a great project where we tested how the brain reacted to Cheetos for Frito-Lay, which was fascinating for which Frito-Lay won an award. But what we ended up doing that really was the success of the company was that we ended up doing something called a neural lab.

Caroline Winnett: for our large clients like Unilever and Cola and Frito-Lay where we would run an entire lab at the site of their choosing and they could pick from a menu which ads do you want to test, which products do you want to test with messaging. And so it was a turnkey neuroscience consumer research operation. as opposed to just doing one-off tests one by one. That’s what led to our growth, our financial success, and our eventual acquisition by Nielsen.

Alejandro Cremades: Yeah, I mean, 0 to 25 million, as you said, in five years is is remarkable. At what point you know were you like thinking, wow, I think that they we’re into something really interesting here? What was that they turning a corner moment you know where you know there was something really incredible here?

Caroline Winnett: So there were there was a couple, but the first one it was was really very interesting. So neither myself nor my husband and co-founder were neuroscientists. So of course we needed a neuroscientist. So being in Berkeley, we went to UC Berkeley and we asked one of the neuroscience professors there to join us. His name was Dr. Bob Knight. He ended up becoming our chief science advisor and co-founder. And Bob was a scientist, very good scientist, very solid scientist. And Bob said, look, I don’t know if this works. I don’t know if this testing will lead to any kind of really significant and accurate conclusions about how brains react. But I’ll keep an open mind. So let’s do the following. We asked one of our customers for three ads and we said, don’t tell us, but based on your research, which one is bad,

Caroline Winnett: Which one is meh not so great and which one is really, really good? Don’t tell us. We’re going to test it using our equipment. And if we get it right, pay us. If we don’t get it right, no charge. So we did that and we got it right. And that’s when we went and the customer went. I think you’re on to something. So that was one of the first tests, you know, real real tests of is this going to work? And it did.

Caroline Winnett: And from there, we just ran with it.

Alejandro Cremades: And what about too? I mean, I’m sure that there’s like like a couple of people here that are like wondering, hey, you know, like, what what is it like where when you’re like doing a startup with your significant other, you know, how are those dynamics like?

Caroline Winnett: Mm hmm. Yeah. So, you know, based on my many years of experience, both being a startup founder with with my husband at the time and watching other startup founders, I will say that startup founders who are married or related have just as much chance of success as any other startup founders. There’s no, oh, they’re much more likely to succeed or they’re much less likely to succeed. It’s all about, the relationship between the two people? Is it a successful relationship to be co-founders? So for us, it was a very successful relationship. where We get along really well as co-founders. We had different skills, different things we focused on. And it was very nice that there was 100% trust between us as co-founders. I mean, that that’s a great thing. And that’s a requirement for a great founding team.

Caroline Winnett: whether they’re married or not.

Alejandro Cremades: So then I guess, you know, it sounds like you guys were into something really amazing here, you know, already at 25 million in revenue. At what point does Nielsen come knocking? You know, what was that process like?

Caroline Winnett: yeah So as I mentioned, we funded it ourselves. we we The seed funding was all from our savings. And in fact, it got yeah very intense because we spent all of our savings. We were out of money. We had small children. We had a house and a mortgage. So at that point, I went to my parents and I was very fortunate that they were able to loan us money for about a year so that we could pay our mortgage. So I was very lucky and fortunate to be able to tap into that resource.

Caroline Winnett: um And then it was a very quick ride to get to a very stable business model. And along that way, we were at a conference and I noticed the CEO of Nielsen walking around. So I made a beeline right up to him and I said, Hey, Dave, come check out our booth. We’ve got a demo here and you can see how we measure brainwaves. So I brought him over, we showed him the technology and he went,

Caroline Winnett: This is interesting. So we had a few meetings, one thing led to another, and Nielsen was our first and only investor in Neurofocus, and they invested our one and only investment round for an A round. And that’s how they got involved. And then the CEO joined our board. And it was actually his idea to create those neural labs that I mentioned earlier. So he was a very valuable board. He was a very value add investor.

Alejandro Cremades: So at what point does the conversation transition into an acquisition?

Caroline Winnett: So we put something in the investment agreement that, of course, we advise startups to never, ever do. Don’t do this. Nielsen asked for it and received a right of first refusal. And somebody else came and said a few years later, hey, Neurofocus, we want to buy you. And Nielsen said, aha, we’re exercising our right. And we were happy with that. So it turned out well. But like I said, We don’t advise startups to do that. In our case, it turned out well.

Alejandro Cremades: ah do you think it kept the competitive bidding process?

Caroline Winnett: Well, we had um two other companies sniffing around, so so it worked out well for us.

Alejandro Cremades: Got it. now Now, obviously after this, you ended up in you know shift shifting gears, and you became more an angel investor. But you know before even talking about this, I mean, Neurofocus was not your only you know baby that you co-founded. You also co-founded another company called BoardVantage that was acquired by NASDAQ. you know Anything that you can tell us there.

Caroline Winnett: Yeah, i i don’t you you won’t see that on my LinkedIn. I won’t talk about it much, because I did co-found it, helped come up with a concept. I named the company. You can see similarity, neuro, focus, board, vantage.

Caroline Winnett: And that was, at at the time, I think the lesson from that is, at that time, I could not devote myself in the way you need to devote yourself to a company.

Caroline Winnett: you’re either all in or you’re not. So I couldn’t be all in. So I stepped away. I was taking care of very small children at that time and and raising my children and my family. So I took a little bit of time off from being an entrepreneur and that was very much the right decision. That was also co-founded with my husband at the time. So he went off and ran it and found a ah founding team and it turned out to be a successful operation, although the acquisition wasn’t until about 15 years after founding, so which is not unusual, you know as we know.

Caroline Winnett: um There’s many startups that look like an overnight success, but they’ve actually been around for 10 years.

Alejandro Cremades: i hear you

Alejandro Cremades: It does take time. So in your case, after Neurofocus, you became an angel investor and and advising other companies. and And you were thinking about maybe starting an accelerator program or something to really, you know, kind of give back to the to the venture community. But, you know, one thing that came knocking was the, you know, possibility of SkyDeck. So why, um you know, joining forces with Berkeley, you know, on their startup program?

Caroline Winnett: So how it happened was interesting. As you mentioned, I was thinking about starting my own incubator because I love the idea of working with lots of startups, lots of them. That sounded absolutely fascinating. I had gotten a little taste of that being an advisor, an investor. So I started making a plan. I found some partners. We started talking about it. And of course, I had heard at that time about Berkeley Sky Deck, which was very young at that point. and I thought, hmm, maybe rather than starting my own operation here in Berkeley, maybe Berkeley Sky Deck wants to have another location, different part of the city, different focus, et cetera, et cetera. So I ended up running into one of the board members of Sky Deck, one of the founders of Sky Deck, Rich Lyons, who at that time was the dean of the Berkeley MBA program and is now our chancellor at Berkeley. But I ran into him at an event

Caroline Winnett: And I pitched them the idea about a second Berkeley Skydag location. Little did I know that at the time they were looking for a new executive director of Berkeley Skydag. So i they started chatting, we started chatting, and they offered me the position. And I went, absolutely fantastic. This is an amazing opportunity. And it’s been, I have to say, the most fun thing I’ve ever done professionally.

Alejandro Cremades: So what are you guys doing exactly at Skybic?

Caroline Winnett: So I can put it in two ways. First of all, we’re just having an an amazing time helping young companies grow, which as you know, in the venture community, there’s nothing quite like it. There’s nothing quite like being surrounded by people who really want to do something that doesn’t exist. They want to change the world. Most of them have a deep desire to solve a really difficult problem. And those problems can be curing cancer, solving climate, et cetera. It’s really exciting to be around people with that mindset. I’ll put it in terms of you know what what are what’s our mission at Skydek? And we have a dual mission, and both are equally important. One is to be the world’s top global accelerator, top the best. No comparison, just the best.

Caroline Winnett: That’s what we do at Berkeley. That’s a Berkeley mindset. And number two, to support Berkeley’s public education mission. And as far as I know, we’re the only startup accelerator for whom that is a mission to support the public education mission.

Alejandro Cremades: Thank you.

Caroline Winnett: And we do that through a very unique way. So when I came to Skydex almost 10 years ago and started the accelerator program, I said, well, we need a fund. You can’t help startups grow unless you give them some money. Turns out we can’t do that at Berkeley. We’re a public institution. It’s not in our charter. We can’t start venture funds. Okay, fine, no problem. I found someone to run a dedicated venture fund. That fund now has about 85 million AUM assets under management. And that fund invests in the companies in our startup accelerator track and in a nice

Caroline Winnett: legal agreement document signed by all of us and lawyers as well, the fund manager will donate half of the carry back to Berkeley. So it’s a really unique public private partnership. And what does that mean? It means that as we find these great companies and they exit, which will happen in a few years, it’s still a fairly young in the cycle.

Alejandro Cremades: you

Caroline Winnett: lots of funding could come to support Berkeley and support education. So that ignites the nearly 600,000 living Berkeley alums, who when we go to them and say, hey, we have a startup, will you talk to them? Oh, and by the way, if they succeed Berkeley benefits financially, we usually get a yes. So we ignited that network to not only have a good time helping startups, which is a fun thing to do, just in and of itself, but also to know that they can support education doing that. And that unique partnership has really yielded an incredible community.

Alejandro Cremades: As you’re talking here about investments too, what are you seeing now in terms of fundraising trends?

Caroline Winnett: It’s a really weird market right now. You would think with everybody falling all over themselves to find what’s the next big hot startup using generative AI, that people would be writing checks right and left. They’re not. there They’re both scrambling to find those hot startups, writing a few checks here and there, but they’re also very, very cautious with their capital. And it’s a combination of geopolitical factors, the high interest rates, the fact that a lot of

Caroline Winnett: new funds are having more trouble fundraising. And I think it’s to some degree, confusion about what is the right thing to invest in, and right? I think the days of dot com era, throw money at everything are over.

Alejandro Cremades: you

Caroline Winnett: and And investors, you know, one thing about investors that they they pay attention to the lessons of history. And they realized, I can’t just throw a bunch of checks around. I really have to do this thoughtfully. So what they’re doing and what we’re focusing on at SkyDeck is which companies are really addressing a specific pain point by people who understand that pain point and can build something that really is useful as opposed to let’s throw some generative AI at some problem somewhere and see what happens. So we’re really looking for founders who not only can build very sophisticated products,

Caroline Winnett: but really understand what problem they’re solving or what opportunity they are creating.

Alejandro Cremades: And I guess in in that sense, you know as you’ve been coaching all these founders, what have you seen in terms of um you know some of those traits and and pattern recognition when it comes to the successful founder mindset?

Caroline Winnett: So i’ll go back to that word I used earlier, discipline. it There’s no way to dress it up. A startup is brutal hard work for years and years and years. It is like, we like to call it a marathon of sprints where you constantly feel like you’re sprinting and then you have to do it the next day and the next day and the next day. And if you haven’t been trained somehow through something you’ve done in life, or you havet you you have a mindset geared toward discipline, you’re not gonna make it. You’re just not. So that’s number one. wet We wanna inspire our founders and give them not just all the tools they need, a great community, but also you know a positive experience. At the same time, we know they’re working really hard. So we use that discipline and practice over and over again.

Caroline Winnett: I would also say there’s a unique combination of pig-headed determinists and coachability that is the mark of a successful founder. So one way to put it that I think clarifies is you’re determined to start your company and make it succeed, but you’re agnostic as to how you get there. So you don’t give up, you’re absolutely determined your you’ You’re focused like a dog with a bone, but you’re always open to people giving you advice on the best way to do that.

Caroline Winnett: That’s a somewhat unique mindset combination. It’s a combination of humility and and massive confidence at the same time.

Alejandro Cremades: I love it. So now imagine that you were to go to sleep tonight, a Caroline, and you wake up in a world where the vision of Skydink is fully realized. What does that world look like?

Caroline Winnett: Ah, oh, I love that question. So we’re doing what we’re what we are have always been doing, which is creating an amazing experience for founders and helping them move very, very fast. And there’s a bunch of exits in our belt. Some some big returns have come to the fund. The general partner has donated half of that to campus. And UC Berkeley is well resourced for education, for research, for innovation, and all those things that that we want to do as a campus. And we’re not one of those universities with a massive endowment with many billions of dollars floating around to keep us through. We got to fight for our dollars at Berkeley. We got to work hard as a public university.

Caroline Winnett: We don’t get a lot of money from the state. In fact, you’ll be surprised to hear of the 100% of the budget that we spend at Berkeley, the amount that’s covered by the state now. It used to be 100% right back in the day. It’s currently about 12%. All of the rest of that money we have to raise. And as you know, our tuition is capped. Which is a good thing because then we can bring in students who can’t necessarily afford a gigantic tuition. So that’s a good thing. But it means Berkeley’s always having to support itself. And if we could realize our vision of finding the next Tesla, Apple, Google to help support education, that would be meeting our goals.

Alejandro Cremades: So let me ask you a question here. Let’s say I’m taking you back in time. It’s the year of 1990, where you’re now coming out you know of the MBA program from Berkeley, and you’re venturing into the world of business, into the world of really building and scaling stuff. And let’s say you’re able to have a conversation with that younger self, that younger self that is about to get into it. And you’re able to give that younger self one piece of advice before launching a business. What would that be and why? Give me what you know now.

Caroline Winnett: That’s a great question.

Caroline Winnett: but This isn’t so much what advice I would give, but but kind of partially. So back then, you know the the mean I don’t think I’ve even used the word start up. Compared to today, there was just nothing out there to help you start a company. Now you can just go to Google, press a button, and mil you have so many resources to help you understand how to start a business. So I think what I would have said is spend a little more time looking for people who have started a company and whatever I was starting. Because I started a bunch that failed, quite a few.

Caroline Winnett: and you know I like to make a joke if people ask me, what did you do before Skydeck? I like to say, I was a serial killer. I mean serial entrepreneur, because most of them died. Most of them were learning opportunities.

Caroline Winnett: so So I think I would say, and this is advice I would give today, make sure that you have looked into every resource you can. you know This open mindset I talked about earlier, you know this humble mindset of, of make sure that you’ve tapped into every resource you possibly can.

Alejandro Cremades: you

Caroline Winnett: So you make as few mistakes as possible because you’re going to make mistakes. But the benefit of talking to people who’ve done this before you is often it’s not so much we as coaches are telling you what to do, it’s that we’re we know what won’t work. And and we’re we’re kind of like guard rails, like, don’t go there, you’re gonna fall off the cliff. Don’t go there, are you’re gonna fall off the cliff. And then the entrepreneur figures out where to go. We just keep them on that path. So i would i that’s what I would say to my younger self. And as I think about it, that’s what I tell entrepreneurs today.

Alejandro Cremades: I love it. So Caroline, for the people that are listening that would love to reach out and say hi, what is the best way for them to do so?

Caroline Winnett: so our So our website is skydeck.berkeley dot.edu. You can find me on LinkedIn. If you’re an entrepreneur and and you want to find out more about SkyDeck, just email me winnet at berkeley dot.edu. And applications open July 16. I know this in a few days, so this this podcast, not sure when it’s airing, but our applications are open in July and August and we welcome applications from anywhere in the world.

Alejandro Cremades: Amazing. Well, hey, Caroline, thank you so much for being on the Dealmaker Show. It has been an absolute honor to have you with us today.

Caroline Winnett: It’s been a pleasure.

*****

If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at al*******@pa**************.com“>al*******@pa**************.com

 

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