Kate McAndrew On Co-Founding A $100 Million Venture Fund To Support Founders And Businesses At The Frontiers Of Technology And Design

In today’s rapidly evolving venture capital landscape, one of the most exciting developments is the rise of investors like Kate McAndrew. Kate, a visionary founder and leader, recently launched Baukunst, a $100M fund.

Baukunst has attracted funding from top-tier investors with whom Kate and her co-founders had built long-term relationships.

In this episode, you will learn:

• Kate McAndrew launched Baukunst Ventures, a $100M pre-seed fund that focuses on high-conviction investments in innovative companies.
• Her journey from Pasadena to Silicon Valley exemplifies resilience, ambition, and a passion for leadership, fostered from an early age.
• Her venture career began with Bolt, where she gained hands-on experience building a fund and managing portfolios, eventually inspiring her to start her own.
• Baukunst’s strategy centers on high ownership stakes and a focused approach. It aims to support seasoned professionals revolutionizing their industries.
• Kate emphasizes the power of relationships in fundraising, securing two-thirds of her fund from personal connections and trusted collaborators.
• Baukunst combines technology with design, championing an eco-centric model that values creativity and collaboration over technology alone.
• Kate’s recent book, The Goddess Guide to Branding, encourages founders to elevate their brands through archetypes that resonate with modern audiences.

 

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About Kate McAndrew:

Kate McAndrew is Co-Founder and General Partner at Baukunst, a $100M venture fund based in San Francisco. Kate leads pre-seed rounds for startups at the frontiers of technology and design.

She is passionate about backing women-led startups that have the potential to transform industries by providing radical new solutions to pressing problems.

Along with her sister Jane McCarthy, Kate is co-author of the new book The Goddess Guide to Branding: Your Blueprint for Building an Abundant & Authentic Feminine Brand.

Connect with Kate McAndrew:

• LinkedIn
• NFX
• Crunchbase
• RocketReach

Read the Full Transcription of the Interview:

Alejandro Cremades: alrighty Hello, everyone, and welcome to the Deal Maker Show. so Today, we have a very exciting investor. investor you know We can also call her a founder. you know She’s launched a launch that really exciting venture capital firm and a fund right now that is pretty big, $100 million to invest in pre-seed, which is something that you don’t typically see often. She also recently published a book,

Alejandro Cremades: where we’re going to be talking about all types of good stuff you know on how to elevate brands, how to elevate the conversation, and then also you know like some of the patterns when it comes to investment, when it comes to finding you know great entrepreneurs. Again, the building, the scaling, the financing, the exiting to that, she probably sees you know most likely on everything you know that she has. a ah Right now, um a a finger on the pulse,

Alejandro Cremades: And then also a recent investments, as well as some of the companies that she has invested in that she’s the most proud of. So again, brace yourself for a very inspiring conversation. And without further ado, let’s welcome our guest today, Kate McAndrew. Welcome to the show.

Kate McAndrew: Thank you for having me, I’m delighted to be here.

Alejandro Cremades: So originally born and raised in Pasadena, California. Give us a walk through memory lane. Kate, how was life growing up for you?

Kate McAndrew: You know, life was pretty great, I’m not gonna lie. I had um very hard working parents and I think they set me off with this belief that I could do anything. um if i If I worked hard enough and if I really followed my heart in that,

Kate McAndrew: And while they weren’t entrepreneurs, I grew up with the entrepreneurial bug. I was the classic person, you know, making my friends peddle Oreo cookie milkshakes around the neighborhood, selling them. And I really grew up with its entrepreneurial spirit and really with a lot of powerful women around me. I went to an all-girls school and all-girls camp and I grew up in a kind of high achieving sisterhood and I think it really made me who I am today.

Alejandro Cremades: So how do you start dreaming about being a CEO when you’re you know such a young age?

Kate McAndrew: You know, it’s really funny. I think the the word for me was like, oh, I want to be the boss. You know, I think I just had this um leadership quality and I’m someone who loves the new. I love to break new ground and go into new new territory. And it just felt exciting to me. And something that naturally happened was I was very clear about what i was good at and what i wasn’t good at and i was really magnetized by people who had complimentary skills and i love inspiring them to come with me on whatever mission i was on and i just found that i did my best work in teams using even as a very young person.

Kate McAndrew: And I also was enough you know around the business world enough to understand that you know companies were really just excuses for groups of people to come together and make things that they believe in. And that has continued to play out in my life as I’ve gotten deeper and deeper into company building. But it really was plantating me as a child and was very clear that I i wanted to run the show.

Alejandro Cremades: Now, in that regard, you ended up a going to ah Montreal for studies to McGill University. And from there, you went into Lululemon. You also had your consulting practice. How do you land in the world of ventures, in the venture world?

Kate McAndrew: In the absolute most unlikely way possible, I actually um took a year off from consulting to build houses with Habitat for Humanity. i um I really wanted to give back and I was also trying to think about getting some spaciousness to make a big decision about going to business school or starting a company.

Kate McAndrew: : And in that break, I ended up connecting with a group of angel investors who wanted to start an accelerator program. I’ll never forget standing on the side of a building, you know a house you were building installing scaffolding, or sorry, installing installing siding, and this angel investor asking me if I wanted to help them start this accelerator program.

Kate McAndrew: And it’s a huge turning point in my life. And the biggest turning point was I just did not understand under how investment worked, right? I thought that if I wanted to go get a business education, I had to pay for it. And when they told me that accelerators were about people you know investing money into entrepreneurs and then helping them start the business. It really blew my mind of how information could flow, how money could flow, and truly how businesses got built. And so I took that opportunity, I ran that for two years, and very quickly I turned around and knew I had to come to Silicon Valley, and and I did.

Alejandro Cremades: So tell us about going to Silicon Valley. How was that a arrival and what were you seeing around and and and how was that for you?

Kate McAndrew: Well, it was a very special time. I had invested in one startup through the Accelerator that was ah hardware a hardware biotech company. And they all lived in a big communal warehouse in Soma. um And they threw crazy parties. And it was an incredible ah brain trust of really genius people who have gone on. They’re now running OpenAI and you know head of Google AI, really interesting people.

Kate McAndrew: um And they created this universe and just welcomed me into it. And so I feel like I had an incredibly um deep cut into what was happening in San Francisco and the people who were truly passionate what they were making.

Kate McAndrew: So I literally slept on the floor of their warehouse for the first month because I couldn’t afford an apartment. One of them falsified an employment letter so I could qualify for my first apartment. And then very shortly thereafter, through networking and going to events, I got my first real venture job. um And so it was really a story of young people showing up for young people who were excited about the real work and really community, um kind of helping one another find great opportunities. And so those folks are some of my closest friends you know to this day.

Alejandro Cremades: So tell us about Bolt, because Bolt was a pivotal experience for you. You were there for close to eight years. You went there from the lowest of the ranks you know from, let’s say, associate all the way to making it to partner. How was that how was that journey like?

Kate McAndrew: It was totally transformational. um Never in my life had I had a group of people who believed in me so completely and who just gave me the room to run. It was extraordinary. And I joined just prior to closing up the first fund, which was a pre-seed fund, 32 million. And I was the only employee in San Francisco. Everyone else was on the East Coast.

Kate McAndrew: And they basically told me nothing about what I should go do. They just sort of unleashed me onto the city. And I really think you know in those years, I not only learned who I was as an investor, right? What I was what i was great at. um I also learned what it took to build a fund and so I was very lucky that there was a senior partner there who had been in venture for 30 years and I got the rare experience of getting to have an apprenticeship really and and to learn under him the ins and outs of

Kate McAndrew: Not only how do you source great deals, but how do you manage them? How do you become a great board member? How do you manage a portfolio? How do you exit stock? How do you do M and&A transactions? The the soup to nuts of the practice of venture capital, which I think has has been sadly lost by a lot of, kind of in in many instances, so with GP funds. I got the best of the best, but it came to that apprenticeship. And I also got to do the crazy fun interesting thing of building a venture brand all from scratch, right? So this was not ah a big fund with a lot of process and clear rules. This was really building the plane while you’re flying it and I absolutely loved it. So it scratched the entrepreneurial itch and I learned so much, so much there and I’m really grateful for for that time.

Alejandro Cremades: So at what point does it become, you know, and an opportunity, right? Like an idea that comes knocking to you after almost eight years, you know, hey, maybe I can build one of those on my own, you know, and and and and create my my own destiny.

Kate McAndrew: So.

Alejandro Cremades: I mean, at what point does that become clear?

Kate McAndrew: You know, it’s interesting because I harken back to what I was saying about kind of who I’ve always been since I was a kid. And I think that ultimately I knew that I wanted to own the thing that I was making.

Kate McAndrew: And while Bolt was an incredible platform and training ground for me, I was also really investing against someone else’s thesis, right? Bolt was very focused on this intersection of hardware and software.

Kate McAndrew: I was developing my own areas of interest and thesis areas that were you know a little bit adjacent to that and i was pushing at the edges of what bolt was about and i also knew that if i was gonna build something and dedicate ten more years of my life to it i wanted to own it and i really wanted the lps to be betting on me right believing in me um and so.

Kate McAndrew: There were a lot of recruiters. you know If you’re ah someone who’s especially a woman who’s been in venture for almost a decade, i you know it’s in great deals. and i felt I got recruited to big funds all the time. and It was very easy for me to say no to those roles. um But when the opportunity came to really start something new on my own, um you know, with partners. But it was just, it took me about 30 seconds to think about it. Even though there was a ton of risk, it was just clear that this is what I had to do. If I was going to continue to to be an investor, i I wanted to make my mark. And that’s how Balconist was born.

Alejandro Cremades: So how was it that process too of of meeting your partners and getting the bank together for the fund?

Kate McAndrew: Yeah. So, you know, we actually all met at Bolt and a couple of us were, one of us was on engine, we had an engineering team. One of us was a principal. I had just been promoted and then the original senior partner.

Kate McAndrew: And we had to decide if there was going to be another bolt fund or not. um And it was very clear to us that, and to to me, I’ll speak for myself, there was a bigger opportunity out there ah beyond hardware and software, right? That wasn’t about, you know, just that staying in that vertical. We wanted to do more.

Kate McAndrew: And um I also know that the grass isn’t greener on the other side. When you have a team of people who you trust and like who execute at the highest caliber, like that is something to hold on to. And so we really decided that um a few of us wanted to spin out and go start this new thing, and we did. And actually, we’re very lucky to have are one of our investors from Bolt anchored Balconst and kind of stepped up and anchored our fund and that really put us in business and we were then able to raise the hundred million dollars really on the Balconst strategy which is quite distinct from the the Bolt strategy but I think that um

Kate McAndrew: One of the things that has guided me in my life and in my career is just work with the absolute best people that you can. like You are only as good as the team that you’re playing on. And so you want to be with people who raise your game. And whether that person is your analyst, or your admin, or your co-founder, everyone has to be raising one another’s game. And I know that I’ve got the best team in the world. So it’s really an honor to play with them.

Alejandro Cremades: What was the ah journey like of um raising? Because $100 million to invest in pre-seed is say so unbelievable, right? So that’s a lot of checks that you can write. So how was that journey of of really raising all that money, especially for a first time fund?

Kate McAndrew: It was incredibly hard. I mean, it’s so interesting. Because we had this really big successful fundraise, a lot of people think, oh, it must have been really easy. If you raised $100 million, it must have been really easy. And let me tell you, it wasn’t. um Not only did we need to raise $100 million, but I was also a new mom. ah So I kind of became a mother because coming out of the pandemic and raising this fund,

Kate McAndrew: um all at the same time. And i I actually think that something that Phil Knight talks about you know in his book about Nike, it sort of you do it when you don’t have any other choice. Failure was not an option for me. where I was doing this with it with a baby on my knee and um failure was not an option.

Kate McAndrew: And I think that I look back on kind of the insane guts that we had to even target 100 million, you know, and I’m i’m really proud of us for setting that goal. it was It was audacious, but we wouldn’t have, you know, we wouldn’t have um We wouldn’t have reached it if we hadn’t reached for it. So I think like one lesson that I had was go big, right? Go big, dream big. um And then I think in terms of the fundraise, it was a terrible time to fundraise. It was a horrible market. There were wars starting. you know it was It was just a very difficult time to raise. um And any manager will tell you that. But there were a couple of things that worked. So I’ll talk about what worked.

Kate McAndrew: So the number one thing that worked were personal relationships. And that sounds so obvious, right? But we spent a lot of time pitching the usual cast of characters that you would think should invest in an institutional pre-seed fund. And none of them converted.

Kate McAndrew: Right. Like it it was not um the the usual suspects, the people who you think are putting content out there about how great it is to be an LP and how they should back emerging managers. They were not the people that came through for our Fund One. The people that came through were people that we had been on boards with.

Kate McAndrew: right People that we had worked with, people we had built relationships with and they had seen us in action and they knew that there was work ethic and craft and thoughtfulness behind what we were pitching. So ultimately, um it was personal relationships and and folks that folks that had really seen us and our track record um as board members, as investors that ended up and creating the bulk of the fund, about two thirds of the money came from that. um So it was difficult and really you I had to forget everything that I thought I knew about fundraising and everything that people tell you about fundraising ended up being not true for our fundraise and um I think having the

Kate McAndrew: the insights to stop going you know after everyone who people tell you to go after and to really double down on our personal relationships was definitely what what made it work for us.

Alejandro Cremades: What kind of LPs did that end up looking like?

Kate McAndrew: So we have three major buckets of LPs. ah The first major bucket is very large multi-billion dollar family offices who all have entrepreneurial roots to the capital.

Kate McAndrew: So we found that like entrepreneurs got it, right? They really got it. And so we have a number of um very large multi-billion dollar single family offices who have fairly sophisticated investing practices. um And that’s about a third of of our LPs.

Kate McAndrew: um The next third were corporate strategics who we really admired and had long-term relationships with the C-suite and we focus on the frontiers of technology and design and so we have a couple of corporates who represent, so it’s a small number, who represent a third of the capital who are really at the bleeding edge of you know leading $10 billion dollars plus market cap public companies who are the leaders in you know software at the frontiers of technology and design. So there’s a kindred spiritness to kind of what we were excited about, what they’re doing, and and those have been phenomenal relationships for us.

Kate McAndrew: um So that was the second third. And then the last third was individuals. Many of those individuals were folks who we had invested in the past. So we had a lot of founders we had backed. We had exited their companies, come and invest in in us. We had folks from our former operating backgrounds. you know One of my partners was on the core iPhone team at Apple. So a lot of Apple DNA um in the in the individuals.

Kate McAndrew: designers, engineers, really people who are phenomenal builders in the categories where we are investing came in and invested in the fund. And many of those have become a very powerful collective for sourcing investments and supporting them, et cetera. So a third multi-billion dollar single family offices, a third corporate strategics, and then a third individuals.

Alejandro Cremades: So it’s interesting because it’s a lot of money to invest in pre-seed, right? So out of the 100 million, how many pre-seed investments are you thinking about doing there? What’s going to be the following strategy? Give us kind of like the 30,000 foot beyond the way that you guys are thinking about this 100 million.

Kate McAndrew: So we modeled a very, I would say, concentrated strategy for pre-seed with this size of fund. So we are very ownership focused. We’re big believers that if you get to conviction on an investment at pre-seed, go all in. um So we do we’ll do roughly 30 to 35 investments.

Kate McAndrew: The check size ranges from 500K to 1.5 million, but the majority of the investments we’ve made so far have been in the 1.2 range, so kind of on the larger side ah size of that range. And then our average entry ownership is very high. So we’re modeling 15% average entry ownership, and we’re actually beating that in the fund. And the the reason why I think that’s really important is because Right now, the pre-seed market is very fragmented. right There aren’t a lot of angels out there. If you’re getting money from angels, you know the checks are relatively small. There are small pre-seed funds who are doing maybe 250K, maybe a little 500K.

Kate McAndrew: But if you’re a founder and we we back a lot of folks who are kind of mid-career, you want to raise that money and you want to get to work, right? And you want a high quality partner that is going to help you on that journey. You don’t want to go raised from 30 people. And so we really solve the whole financing problem for the entrepreneur.

Kate McAndrew: by having the guts to figure out how to diligence and how to underwrite founder market fit and the opportunity before there’s traction. And so by doing that, we’re writing a big check very, very early at pre-seed and we’re commanding the ownership that I think is super important if you want to have a valuable fund in the long run, given future dilution, et cetera. So we’re big believers in investing off of high ownership.

Kate McAndrew: and big believers that kind of really solving the financing problem for that high quality founder allows you to command that ownership. um So that’s that’s kind of the the the basic fund model.

Alejandro Cremades: So what does the, um when you find like, ah oh my God, you know, type of um founder or deal, but what what does that typically look like when it comes to pattern recognition?

Kate McAndrew: and

Kate McAndrew: So I would say the core archetype in our fund is really an experienced professional who is in the top 1% of their field. And they are starting a company.

Kate McAndrew: to revolutionize that field. right so We have a of a company in um the collaborative manufacturing space, let’s say. The CEO of that company, he ran the Model X manufacturing at Tesla. He ran the R1 launch at Rivian. This is someone who was at the top of the manufacturing game, right? He was also called the Elon Whisperer, right? he is He’s taking his experience as being the top 1% of that field, and he’s building the software tool that he wish he had to kind of help the rest of the manufacturing world catch up to what he knows. Similarly, we’re um investors in an interesting company that’s revolutionizing publishing, that’s kind of taking influencers and turning them, or taste makers and turning them into publishers.

Kate McAndrew: And that company is started by the former head of product for patreon, who also has been in the you know book startup world for a long time and a book packaging executive of 20 years, right? So these are people who are in the top 1% of that field and they’re coming together to totally transform the field with technology. So that’s the core archetype of of what we’re what we’re looking at.

Kate McAndrew: um We have a couple folks in the portfolio who are, you know, they’ve exited previous companies for a billion dollars or they were formerly the CEO of publicly traded company. and That’s like a so a slimmer part of it. And we have a couple of um kind of younger first time founders, but with the bulk of who we’re looking at are seasoned professionals revolution revolutionary there revolutionizing their profession through technology.

Alejandro Cremades: and So let’s say i yeah um you have the opportunity of going to sleep tonight, Kate, and you wake up in a world where the vision, you know, of your guys is fond of, packaged, is fully realized.

Alejandro Cremades: What does that world look like?

Kate McAndrew: Oh, that’s a beautiful question. Well, Baukunst means the art of building. um So Bau means building um in German, ah and like Bauhaus, and then Kunst is art or craft. And so really the goal of our fund is to advance the art of building companies at the frontiers of technology and design. And I really believe that The core drivers of value, monetary value and also cultural value come from that mix of technology and design. And I believe that the venture capital asset class has become a bit too obsessed with technology in isolation.

Kate McAndrew: and has not been thinking enough about the ways that design and technology can transform things for the better. So I really believe that if we’re successful, we will advance the art of how we build companies towards a more eco-centric instead of ego-centric model and that we will also think critically about um how design and technology come together to build products that really center a world that we want to live in right and doesn’t just fetishize check for tech for tech’s sake. um it can It can feel dystopian sometimes to ah to sort of see what’s getting funded and ask yourself, are people really thinking about the world that this is going to create? right

Kate McAndrew: and So we’re we’re certainly not anti-technologists, but we we do believe that that design piece is really critical to creating a more abundant version of capitalism.

Alejandro Cremades: So for the entrepreneurs listening now, when we’re talking about building great companies, what will be the one piece of advice that you will give them before launching a business?

Kate McAndrew: oh Pick the smartest person that you don’t think you can get. The ungettable VP, the ungettable co-founder, reach higher for your collaborators. The thing that I’ve seen with the companies that break out versus the ones that they do okay and get aqua-hired, they become good businesses, but not great businesses, the great businesses.

Kate McAndrew: are all founded by CEOs and founders who go and find people who they perceive to be even better than themselves and they are intimidated by that greatness. They are called to that greatness and they go and make the impossible possible. There is there is just this boldness to believing that their mission is worthy of the absolute best and a totally brazen attitude about bringing people onto to that mission. So I really do think that the first 10 people that you attract to that company will set the tone for how that company is built, the quality of that company, the creativity of that company. So really going and getting that ungettable talent is the number one thing that I would tell people to do.

Alejandro Cremades: I know that you also came up with a book that you wrote with your sister. ah Your sister is more in, you know, more of a brand strategy. is So you’re more on the investment side. So tell us about what can people find in this book?

Kate McAndrew: So we wrote this book, The Goddess Guide to Branding, together as a sister project, kind of bringing together our our expertise. And in the book, we introduce founders and wannabe founders to eight goddess archetypes.

Kate McAndrew: And we introduce you to Diana, the free, and Athena, the wise, and these deep feminine archetypes that blow past the paper thin stereotypes that we have seen um so many brands built on you know in in decades previous.

Kate McAndrew: And then we show how these archetypes are alive in thriving, powerful, profitable, big businesses today. So in the book, you know we speak to leaders like Sally Krawcheck from Ellevest, a fintech company to Laura Modi from Bobby, which is an infant formula company that I backed at the pre-seed level you know way back in 2018.

Kate McAndrew: and We really show how these archetypes are alive in businesses today thriving businesses today. and Then we take the founder through the journey of finding an archetype for their brand. Whether you’re starting you know a cybersecurity company or a preschool co-op, you need a brand. right You need to be able to tell a story of who you are,

Kate McAndrew: you know what you’re offering, why people should care. And so this book is really an accessible, fun, powerful way to um connect with you know female founders and builders um and show folks how to do that. So it’s a really fun book and I’m so excited for it to find its people.

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

Kate McAndrew: So I’m on TikTok and I’m also on LinkedIn. And those are great platforms to get to know me on. I’m super responsive to comments and love interacting with folks on this platform. So those are great ways to get to know me.

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

Kate McAndrew: Super fun. Thanks for having me.

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