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M.R. Asks 3 Questions: Cindy Padnos, Founder, Illuminate Ventures

By October 9, 2018Article

Leveraging 25 years of high tech industry experience, Cindy is the founder and managing partner of Illuminate Ventures. Cindy has been an active member of the venture capital community for more than 10 years and has helped raise and deploy $100’s of millions in venture financing for early stage tech companies.

As a serial entrepreneur, she helped deliver successful outcomes for several venture-backed startups, most notably as founder and CEO of Vivant, one of the earliest on-demand SaaS companies. Cindy was named one of the “most influential women in Silicon Valley” by The New York Times and one of the “most influential women in technology” by Fast Company.

I spoke with Cindy to find out how she got the moniker “Queen B2B,” if she thinks we’re in a bubble, and why diversity in tech is not just a pipeline problem.

Can you talk a little about how you got the name Queen B2B and what that’s about?

It all started back in 2010, shortly after forming Illuminate, when the head of the AlwaysOn conferences called me to invite me to serve on a B2B-focused panel. When he could not come up with any other people that were investing exclusively in B2B, he decided to change the panel to focus on unique funds across several categories and dubbed me the “Queen of B2B.” He actually introduced me to people at the conference that way, which made all of us laugh.

Shortly thereafter, in an article about some of the leading enterprise software VCs, VentureBeat modified the wording a bit and gave me the moniker “Queen B2B.” It stuck. Our team thought it was so funny that ever after when they introduce me, they will say “You must know Cindy. She’s Queen B2B.”

It’s a silly name that I am actually proud of, since it reminds me of our initiative to be one of the first to see the significant potential of a focused B2B investing strategy. The name actually helped us to attract the right deal flow for our investing thesis and to avoid being distracted by opportunities that would not be a fit. That benefited both us as a firm and entrepreneurs.

You’ve been on different sides of the VC system for more than 20 years as both a founder and as an investor/advisor. How has the environment for companies changed in this time? Are we in a new bubble?

I’ve now been on the investing side of high tech for nearly a dozen years, after a long and rewarding career as an entrepreneur and operator. During that time so many things have changed, some quite dramatically that I hardly know where to begin. For example, when I founded my company, Vivant, I didn’t have any choice but to go out and raise capital because the public cloud did not yet exist. Back then, people actually had server rooms in their offices and needed special air conditioning!

Today, with nearly free resources from groups like Amazon AWS, Azure and Google Cloud, entrepreneurs have the opportunity to start building a business part time from their homes and to do so without raising outside capital. That difference is a distinct positive for both entrepreneurs and investors. Entrepreneurs have the opportunity to experiment and validate what they’re doing before seeking capital and all of the pressure and distraction that can entail. Investors then benefit from the reduced risk of an investment in a company that is a bit further along.

The emergence of this bootstrapping phenomena over 10 years ago drove me to launch Illuminate as a seed stage VC firm. It became obvious that companies no longer needed a traditional $4 million to $6 million Series A round to get started. They could leverage the robust, but low-cost, resources of the cloud, collaborate remotely with teammates to build an MVP and then raise a much smaller initial round of financing that would be less dilutive.

Fundamentally, the venture capital ecosystem goes through cycles. Those cycles aren’t always about boom or bust. They can be driven by new technologies of course, but also by new business models. I have lived through several transitions including the impact of the transition to the internet to mobile, to SaaS and now AI. Equally important has been the shift from traditional enterprise licenses, to open source, subscription pricing and freemium business models.

I love the fact that evolution of the tech sector is continuous. Just because we have many useful enterprise systems today doesn’t mean they won’t be replaced tomorrow by something better, faster, less expensive, more flexible, and with a whole different user experience. In fact, they will be, and that is why investing in the enterprise space is so exciting.

As a successful woman are you starting to see any change in the diversity of founders or investors on the scene? 

I am certainly seeing and hearing a lot more about diversity in tech than ever before, but some of us have had a focus in that arena for quite some time. At Illuminate, more than half of our portfolio companies have at least one woman as a cofounder. That balance was achieved in spite of the fact that we never use gender as part of our investment criterion.

The fact of the matter is that the lack of diversity in tech entrepreneurship is not primarily a pipeline problem. There are many things that need to happen for non-traditional entrepreneurs to have a more reasonable shot at access and success. At Illuminate, we have conducted our own research and shared our learnings broadly regarding the current state of diversity in tech entrepreneurship. Based on this research we have identified quite a few hidden barriers and myths, and taken steps to try to ensure that Illuminate offers a level playing field for any talented entrepreneur.

For example, in creating our 40-plus person strong business advisory council – we sought diversity well beyond gender, including race, nationality, education, geography, experience and more. We have done the same with our student internship programs. As a result, our deal flow is disproportionately more diverse than the norm. 


M.R. Rangaswami is co-founder of Sand Hill Group and publisher of