GCV Powerlist 2017: Natalie Hwang

Natalie Hwang is the managing director of Simon Ventures, a multi-stage corporate venturing unit oriented towards innovation for “the future of retail and commerce” on behalf of parent corporation Simon, a Standard & Poor’s 100 company and one of the largest real estate enterprises in the world.

Currently a one-person investment team following the departure of founder Skyler Fernandez this year, Hwang graduated with honours from Duke University – awarded Best Honours Thesis in her class for public policy studies. She went on to study at University of Virginia Law.

She started her professional career at law firm Simpson Thacher & Bartlett, which later helped her dive into the world of venture investing. At the time she was involved in “a lot of deals, including private equity and hedge funds investments as well as M&A side work, many of which were highly-publicised transactions”.

Subsequently, she joined Blackstone Group. She said: “I had the good fortune to study the art of business building with some of the best professionals at Blackstone.”

She also ran, “on her own time”, a personal early-stage fund focused on retail and commerce, “leveraging a lot of the insights from my experience there to making early-stage investments in the next-generation commerce and retail tech space, and participating alongside top-tier VCs like Thrive Capital.”

Today she directs a corporate venturing unit with a clear preference for enterprises from those fields, albeit at a later stage of development. Simon Ventures’ investment philosophy places a substantial weight on the financial side.

“Under my leadership, Simon Ventures is now pursuing a risk-adjusted approach to venture capital investing that is unique for the industry and especially well suited for companies innovating in the next-generation commerce and retail tech space given their unique growth, capitalisation needs and exit profiles,” she said.

The role of financial returns and potential is, undoubtedly, pivotal for Simon Ventures. “Our investments will exhibit common characteristics that are fundamental to our investment, risk management and portfolio construction philosophy, demonstrating extreme capital efficiency in their ability to achieve profitability, coupled with rapid scale.”

Hwang has backed five companies at Simon Ventures from the retail and e-commerce space that represent her investment strategy – Grailed, a curated community marketplace for men’s clothing, Dirty Lemon Beverages, a next-generation beverage platform, Appear Here, a platform described as the “Airbnb of retail real estate”, MeUndies, an e-commerce underwear company, and multimedia agency FabFitFun.

With enviable experience under her belt in companies from these fields, she said she understood their unique needs, which often differed from traditional tech companies funded by VCs. She said she was also aware that, as a corporate venturing investor, Simon’s unit had to provide additional value to portfolio companies.

She added: “We are also building a highly strategic platform that offers companies access to the best across assets in real estate, brands, technology, capital partners and proprietary social networks to impact their growth trajectory. All the services we provide can be considered a form of dilutive capital that comes at no additional cost to founders’ equity and do not require a trade-off in terms of incentive alignment.”

Rather than a challenge, she sees this as a differentiating factor, which could help enhance the image of corporate venturers among startup and entrepreneurial communities.

“I believe that good investors will ultimately be recognised for their insights and for the value they bring. Increasingly, the best entrepreneurs are looking for investors that can provide them value-added resources and industry specific insights that will give them a competitive market advantage.”

That is why, looking ahead, Hwang is optimistic that such relationships between corporate venturers and emerging retail and commerce companies will change the image of CVCs. “As corporate venture capital activity becomes increasingly widespread and as new hybrid models and fund structures increase to challenge the notion of how a CVC typically operates, traditional viewpoints will evolve to reflect the realities of this dynamically evolving industry, which carries with it the potential for tremendous impact. Simon Ventures for instance, is financial-return-oriented and operates a model that is unique for this space.”