She Sold A Company To Nielsen And Has Now Helped 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.

In this exclusive interview, Caroline talks about the lessons she learned from being a professional violinist and her experiences with coaching several founders. She also talks about how fundraising trends have been evolving through COVID and recent times.

Listen to the full podcast episode and review the transcript here.

The Early Years: From Berkeley to Brown and Beyond

Caroline Winnett’s roots lie deep in Berkeley, a city known for its culture of questioning norms and fostering innovation. Growing up in this environment left an indelible mark on Caroline, instilling in her a spirit of curiosity and a drive to challenge conventional thinking from a young age.

Her journey took her to Brown University, where her initial path was set toward a conventional career. However, her passion for music, cultivated since the age of six with the violin, took center stage during her college years.

What started as a hobby evolved into a serious pursuit, leading Caroline to a detour into the world of professional music. She recalls joining a conservatory intending to spend a year but ended up graduating from there since she loved it.

This phase, she recalls, taught her invaluable lessons in discipline which she learned when becoming a professional violinist—lessons that would prove instrumental in her entrepreneurial journey later on.

From Music to Entrepreneurship: The Birth of NeuroFocus

After dedicating herself to music professionally, Caroline Winnett pivoted towards her long-standing interest in business. Armed with a newfound discipline from her musical career, she pursued an MBA at Berkeley, despite having no prior business experience.

As Caroline explains, she comes from a family of entrepreneurs, including her father and grandfather. She had always known that she would do something in starting companies or would work with young ventures.

After graduating from the MBA program, Caroline worked for a very small company doing recycling plans, which was fascinating and interesting.

This leap of faith by Berkeley would later come full circle as Caroline dedicated herself to nurturing new entrepreneurs in the same community that once took a chance on her.

During her entrepreneurial journey, Caroline co-founded NeuroFocus, a groundbreaking venture that utilized EEG headsets to measure brainwaves for marketing insights and branding. The venture quickly scaled and went from zero to acquisition and revenues of $0 to $25M within five years.

Its phenomenal success captured the attention of industry giants like Nielsen, which eventually acquired NeuroFocus. This achievement underscored Caroline’s ability to innovate and execute on a global stage, catapulting her into the realms of venture capital.

Caroline describes her journey as similar to most entrepreneurs which involved investing their entire life savings, time, energy, hopes, and dreams into the company. They worked hard and with a little luck, it paid off.

The NeuroFocus Business Model

If you look below the surface, NeuroFocus is a lot more than EEG headsets measuring brainwaves. Essentially, the device was replacing traditional copy testing where brands would test ads. Caroline and her team started by testing ads, messages, and actual products one by one.

They ran projects where they tested how the brain reacted to Cheetos for Frito-Lay, which was fascinating when Frito-Lay won an award.

Eventually, Caroline and her team ended up running onsite neural labs for large clients like Unilever, Coca-Cola, and Frito-Lay. They could pick from a menu of the ads and products they wanted to test with messaging.

NeuroFocus was a turnkey neuroscience consumer research operation. as opposed to just doing one-off tests one by one. That’s what led to its growth, financial success, and eventual acquisition by Nielsen.

Caroline looks back to the time when they realized they would need a neuroscientist and approached Dr. Robert T. Knight at UC Berkeley. Dr. Knight ended up becoming the chief science advisor and co-founder of NeuroFocus.

Talking about her entrepreneurship experiences with building companies with her husband, Caroline attributes their success to having a strong relationship. They contributed different skills to the partnership and trusted each other 100%.

Caroline also reveals how Nielsen was NeuroFocus’ only investor that joined their series A round. Nielsen’s CEO joined the board as a value-adding advisor and eventually acquired the company.

After NeuroFocus, Caroline co-founded another company called BoardVantage which was acquired by NASDAQ.

Lessons Learned and Giving Back: The Berkeley SkyDeck Era

After raising her family, Caroline was ready for the next phase of her life. She was keenly interested in starting her incubator since she loved the idea of working with lots of startups. Having gotten a taste of being an advisor and investor, Caroline started looking around for partners.

At the time, Berkeley’s SkyDeck was a small operation and Caroline met with Rich Lyons, the dean of the Berkeley MBA program.

She pitched the idea of starting a second Berkeley SkyDeck location. Incidentally, Berkeley was looking for a new executive director and Caroline was offered the position.

Caroline Winnett’s transition into venture capital was marked by her role at Berkeley SkyDeck—a startup accelerator deeply rooted in the ethos of UC Berkeley. Under her stewardship, the program has flourished, becoming a global beacon for aspiring entrepreneurs.

The accelerator’s success is not just measured in terms of startups nurtured but also in the contributions it makes to Berkeley’s educational goals through a dedicated venture fund. Caroline looks back at the time when she first came to SkyDeck around 10 years ago.

The biggest challenge she faced with helping startups was funding which was not available at Berkeley since it was a public institution. To get around the problem, Caroline found a fund that today has around $85M AUM and invests in the companies that the startup accelerator tracks.

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They have a legal agreement document signed by the university, and a fund manager according to which the fund manager will donate half the carry back to Berkeley. In this way, they have a unique public-private partnership.

SkyDeck receives lots of funding to support education, and that ignites the nearly 600,000 living Berkeley alums. Caroline talks about how they leverage alumni support to mentor startups and thus benefit Berkeley financially.

Essentially, they have successfully built a community of partners that are interested in supporting education while helping startups succeed.

The Funding Landscape Today

As Caroline opines, although investors are on the lookout for the next big hot startup using generative AI and disruptive ideas, they are also cautious with their capital.

A lot of factors come into play including geopolitical factors, high interest rates, and the fact that new venture funds are having more trouble fundraising.

Similar to the SkyDeck objective, investors focus on companies that are addressing a specific pain point. They invest in founders who understand that pain point and can build something useful as opposed to investing in random innovations.

Investors now only support companies that can build very sophisticated products and understand the problem they’re solving, or the opportunity they are creating. On their part, founders now possess some of the traits and pattern recognition of a successful mindset.

Insights and Advice

Reflecting on her journey, Caroline Winnett emphasizes the importance of discipline, resilience, and a willingness to learn from others.

Her advice to aspiring entrepreneurs is clear: tap into available resources, seek mentorship, and maintain a humble yet determined mindset while learning from their mistakes.

As Caroline reveals, at SkyDeck, the objective is to create an amazing experience for founders and help them move very fast. The program has had some successful exits and some big returns have come to the fund. The general partner has donated half of that to the campus.

UC Berkeley is well-resourced for education, research, innovation, and all those things that it wants to do as a campus. However, Berkeley is not one of those universities with a massive endowment of billions of dollars and has to work hard to stay operational.

Berkeley has to support itself since the state only provides 12% of the funding. The rest of the money needed has to be fundraised.

However, since the tuition is capped, the school can bring in students who cannot afford a big tuition. Caroline’s vision is to find the next Tesla, Apple, and Google and to help support education.

The Future

As Caroline continues to shape the landscape of venture capital at Berkeley SkyDeck, her story remains a testament to the power of interdisciplinary thinking, perseverance, and community support.

Her journey from violinist to venture capitalist exemplifies how diverse experiences can converge to drive innovation and change.

Listen to the full podcast episode to know more, including:

• 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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