Connect with Karen

https://www.linkedin.com/in/karen-sheffield/

VC Uncovered's View

Meet Karen

https://www.linkedin.com/in/karen-sheffield/

Key Quotes

Original Responses (Lightly Edited for Clarity and Flow)

Background and Personal Journey

Unconventional Belief

Climate tech scales fastest when backed by corporate partnerships, not just venture capital. This is something I observed first-hand working at large Fortune 100 corporations like American Airlines, PepsiCo, and Visa. This is something I’ve believed in for a while now, but it seems that only recently are the news headlines giving it attention.

I firmly believe we’re past an ESG-only era for large enterprises. It is about so much more than just checking a few boxes and calling yourself “compliant”. It is about realizing the fact that climate and nature/physical risks = financial risks. The recent surge of interest in climate tech by corporates is driven by the bottom line. In order to minimize increasing pressure on operational costs, they know they need to invest in technologies that can address these challenges.

As an early-stage VC investing in climate tech, I bring this perspective to how I source, pick, and support deals. We need climate solutions that will win in the market and that will only happen when we build on a strong foundation that supports sustainable unit economics and a real market pull from these large customers.

Balancing Intuition with Data

Before I became an early-stage VC, I was leading strategic finance and operations at Fortune 100 companies for 16 years. I love hard data and finding patterns, gathering insights, and modeling different scenarios while pressure testing underlying assumptions.

When I started angel investing during the pandemic while I was still working at PepsiCo, I had to quickly learn to get comfortable with uncertainty as very little data is available so early on in a company’s journey: you are faced with a spirited founder with no revenues and, sometimes, not even a product. I told myself: “Karen, your models don’t work here… Wanted to nerd out using DCF, Monte Carlo simulations, etc.? Too bad. All you have is the person in front of you.” It was like learning to use the other side of my brain.

In my due diligence today, I still want to see a financial model in the data room, if for no other reason than to understand the management of cash flows, run rate, operating expenses, and the capital journey.

However, I am starting to get more comfortable leaning on my intuition about people and whether they have what it takes to grind for a long time with a grand vision and a maniacal bias for execution.

• Do they obsess about the BIG problem to solve or are they easily distracted by the product and features?

• Do they understand that, while they might love their elegant solution, the best one might be staring right at them and know when it’s the right time to pivot to that one instead because that is the one that will bring in customers and achieve PMF?

• Is this their life’s work or are they looking for their next role already?

• Are they hopelessly committed to solving this problem and can this passion carry them when, not if, things get really, really hard?

These are the type of questions I won’t find answers to in my beautiful Excel spreadsheets.

Best Advice Received

The best advice I ever received came from my mom, who told me since I was really young that “You have to knock on 100 doors before the right one opens”. This mentality has served me very well in life and it gave me the super strength of perseverance. It also, in an odd way, hinted at the power law that would define my career today.

Resilience and grit are probably the best traits I learned from my mother, who worked 3 jobs as a medical doctor in Peru to put all her three kids through college. My father, too, was an inspiration as he was an agronomist who held field sales roles.

Lastly, I got to witness my parents’ persistence through thick and thin in the many businesses they ran as they were also entrepreneurs themselves. My parents ran a bakery (selling Peruvian donuts called “picarones”), a pharmacy, a video rental shop (anyone remember Betamax and VHS?), a video game rental parlor, and my father even drove one of the main transit bus lines in Lima. It’s no surprise then that I inherited their entrepreneurial gene and “can-do” attitude, which color my every interaction and decision to this day.

Philosophy and Insights

Investment Philosophy

When raising venture capital as a climate tech founder, realize that this should only be a sliver of the capital stack you should optimize for. You will also need: non-dilutive sources of funding, debt instruments, corporate/strategic partners, complex infrastructure financiers, among others.

This philosophy emerged from my 16 years in Fortune 100 finance leadership, where I witnessed firsthand how enterprise customers provide the fastest path to $100M+ revenues and how 95% of climate tech exits are corporate M&A. At Fortune 100 companies, I saw brilliant technologies fail in the "valley of death" between prototype and scale, not because they lacked innovation, but because they couldn't access enterprise customers.

The average B2B sales cycle is 18-24 months, and 70% of climate startups fail to secure Fortune 500 partnerships simply because they don't understand enterprise buying processes. I realized that my unique positioning, having direct relationships with 500+ Fortune 100 executives and deep understanding of corporate procurement, could bridge this critical gap. The name Pachamama, meaning "Mother Earth" in Quechua, reflects both my Peruvian heritage and our mission to heal the Earth through practical, scalable solutions that corporate partners can actually implement.

Values When Working with Founders

I operate on 4 core principles that stem from being an operator, not just an investor.

1. Authentic partnership: I provide access to corporate partnerships, expert-level operational excellence, fundraising support, and strategic guidance because founders need hands-on help, not just capital.

2. Enterprise readiness: I only invest in B2B companies with breakthrough technology that can serve Fortune 500 customers, because that's where 75% of climate tech demand concentrates.

3. Operational rigor: Drawing from my P&L ownership experience managing multi-billion dollar divisions, I help founders refine go-to-market strategies, optimize enterprise sales processes, and build financial forecasting that actually works.

4. Speed to market: My direct procurement relationships accelerate the typical 18-24 month sales cycle, providing an 18-month advantage in reaching revenue and corporate pilots.

I expect greatness from our founders, but I also believe in being supportive, pushing them toward excellence while providing the networks and expertise to get there faster than traditional VCs can offer.

Measuring Success Beyond Returns

Success means accelerating solutions that heal our planet while building sustainable businesses that survive and thrive. I measure this through three key metrics:

• Enterprise adoption velocity: 100% of our portfolio companies have secured Fortune 500 customers, proving their solutions work at scale where it matters most.

• Revenue acceleration impact: our portfolio achieved 9x revenue growth in 2024 versus 2023, showing that corporate partnerships truly accelerate scaling.

• Systemic change creation: each investment should address critical climate challenges while creating acquisition pathways with strategic buyers, since 95% of climate exits are corporate M&A.

Beyond metrics, success means honoring the Pachamama philosophy, as Mother Earth sustaining life, our investments should genuinely contribute to planetary healing. Success is measured by the magnitude of positive environmental impact multiplied by the speed of corporate adoption, creating a sustainable ecosystem where doing good and doing well aren't mutually exclusive.

Trends and Future Vision

Misconception About VCs

A common misconception is that VCs are supposed to know it all and that our role is much bigger than it really is. While I will be the first to say that VC makes the transformational innovations we all use in our everyday life possible, the true heroes are the founders willing these creations into existence and out of thin air. I am just lucky to be along the ride if/when I join as a strategic investor.

I think an argument can be made that emerging managers act a lot like founders, we are building our own firm from scratch with many things going against us. Personally, I can say that I definitely have empathy for their tough journey ahead and my portfolio founders know they can message me or call me at any time and I will respond. It takes 2 to tango, as they say, so investors who get down in the trenches with founders are built differently.

Improving the VC Ecosystem

Less FOMO investing and more using your own conviction, please! Pattern matching is the proverbial VC skill, but I want to remind investors out there that the only way to find true outliers is by navigating outside of the norm. By definition, an outlier will not come from where the norm lives. The grand slams in VC were all big surprises.

If it feels safe or like a sure bet, it won’t likely become your portfolio darling and/or it means that you are too late. Is it scary to be the only VC in a round or go against the grain? Sure, but if you have built your own conviction around a bet informed by something you know that the market doesn’t, you know you are onto something. Asymmetric information is what makes private market investments worth the risk.

Your job as an early-stage VC is to find the outliers, de-risk them as much as possible, and bet on them early before the market reveals their rightful price.

Challenges for Early-Stage Founders

The valley of death for most early-stage founders is customer acquisition. In climate tech, 70% of early-stage B2B startups fail to secure Fortune 500 partnerships. This will make or break a VC investment. The best investors roll up their sleeves and help bridge this chasm by connecting portfolio founders to enterprise customers.

I’ll say something that other fellow emerging managers hate hearing: it takes more work than a simple email introduction. Fortune 500 companies have 30,000 or more employees and finding the right decision-maker can be a challenge. You have to know who that is and each company is different.

But, finding the right decision maker is only the start, you also have to understand what they are looking for and what their incentives, targets, and strategic angle might be, not to mention, their time horizon.

My call to action for founders is to bring investors to your cap table who can truly unlock this type of customer because large corporations will allow you to scale much faster once you partner with them. You will be able to leverage their best-in-class playbooks, infrastructure, distribution channels, supply chain, and multi-national presence.