On the Top Decile Podcast, Decile Group's Connor Sattely talks with the emerging managers building tomorrow's top funds. This time he sat down with Karen Sheffield, founder of Pachamama Ventures, a pre-seed fund that helps climate founders win over the large companies that decide whether new technology ever scales.
You can watch the full Top Decile Podcast episode with Karen Sheffield on YouTube, or listen on Apple Podcasts and Spotify. Below, we share the ideas from the conversation that we think matter most to founders and to anyone who's thinking about launching a fund.
The Gap Shows Up at the Sale
Karen sees the same pattern across hard tech, deep tech and climate tech, where a team can build something that works and still stall at the sale to a large company. "You can prove that it works," she said. "But then the problem is how to manage that and bring it to enterprise adoption."
Her answer comes from her own career. Pachamama's Fund I announcement describes 16 years of Fortune 100 operating experience across Visa, PepsiCo and American Airlines, and Karen said that time gave her a network of executive decision makers that reaches well beyond the companies where she worked.
She described the way that world works as "kind of like a secret handshake," and she pointed out that those unwritten rules are something first-time founders often don't know about or don't have access to when they walk into their first big meeting.
Picture a young energy startup across the table from a company the size of PepsiCo or Shell. The first thing those founders tend to ask her is a question nobody inside that company will answer for them: who do I go to, and who's the person who can actually say yes to this?
That's why we think her story matters so much to founders. A pre-seed check helps, but an investor who knows how large buyers make decisions can shorten the path from a promising pilot to a real customer, and that's the value Karen has chosen to build her whole fund around.
Climate Started in the Mountains of Peru
People who knew her finance background expected a fintech fund, or maybe a consumer goods fund because of her time at PepsiCo, and she said, "I surprised a few with the thesis of the fund."
The reason goes back to Peru, where she grew up in Lima in a family of entrepreneurs and in one of the most biodiverse countries in the world, with natural ecosystems that gave her an early and lasting reason to care about climate.
Her father was an agronomist, and as a girl she rode along on his road trips to visit the mountain farmers who were his clients. She remembers those farmers teaching her father in return, showing him low-cost techniques such as cover crops that they used on very limited budgets.
She studied economics and finance, first in Peru and then in the United States, and she took classes on natural capital economics that kept the subject in the back of her mind for many years while her corporate career grew.
Corporate finance seemed to pull her away from climate, yet she kept seeing that every business she worked with depended on the same natural resources to operate and grow, which she summed up in three words: "Water, land, energy."
Angel investing came during the pandemic, and she said that while some people were baking sourdough bread, "That was my new pandemic hobby at the time." Over time it led her to a clear conclusion: "I finally realized that I had a role in investing in climate and being part of the solution with capital."
Cost and Performance Come First
Karen talked through two Pachamama portfolio companies to show the range of what the fund backs, and both appear in the fund's public announcement. Matereal is building an alternative to petrochemical polyurethane, a material found in a huge range of products, and it's starting with fashion and textiles.
That choice stood out to her because many bioplastics companies start with packaging, where she said "the margins are really, really thin," adding, "I do know that from my time in finance at PepsiCo." Fashion offers healthier margins and a very large market, which makes it a smart place for a new material to start.
ElectricFish builds a battery-backed, bi-directional EV charger that can help gas stations add EV charging. Karen sees the two companies tackling very different problems with the same advantage, which is industry partners drawn from the Fortune 500 network she's spent her career building.
A green premium is very hard to sell, and she said, "No one is investing in that model really anymore." Her view is that "you have to compete in cost and performance," and we think that's a useful lens for any founder pitching a climate product to a large buyer.
Learning Venture From the Inside
Karen called the move from angel investing to running a fund "the biggest chasm" between people who invest as a hobby and people who do it professionally. Part of the reason is that venture has very little formal training, and as she put it, "no one goes to school for venture capital."
She read books and talked to people, but forming a fund was a different challenge, and she said that "coming across VC Lab was a lifesaver" in that process. VC Lab is our free, 14-week accelerator for emerging VCs, and it's part of a community of 1,000+ investors in over 88 countries.
She also credits VC Lab with teaching her that if you build something worthwhile, "there are people probably that were already looking for you." She described her approach as finding the right people rather than persuading the wrong ones: "The journey of the fundraise was about finding the people who already believe."
Graduates like Karen can run their firm on Decile Hub, the agentic operating system for a VC firm, handle fund operations through Decile Partners, or start out with a Start Fund, which can be operational in about a day.
A GP Who Builds Community
Karen runs events that bring founders and LPs into the same room, and her stated goal is "to remove myself as much as the middle woman" so the two groups can build their own relationships. Many of the people in her network are operators, so founders gain connections and skills that reach past her own.
She hosts in-person gatherings, annual meetings and webinars where she interviews portfolio founders, so both sides keep meeting throughout the life of the fund. When Pachamama announced the final close of Fund I, she celebrated with portfolio founders speaking to a room of LPs, and she said the LPs love meeting the founders.
Connor described what she's building as a community, and Karen agreed. "Venture capital can feel very insular," she said, which is why she believes someone has to create the space where founders, operators and new investors can meet, and it's a role she has clearly made her own.
What Founders and Future Fund Managers Can Take Away
For climate and industrial founders, Karen's message is to plan for the sale as carefully as the science, to compete on cost and performance, and to look for investors who already understand how large buyers make their decisions.
For people who want to invest professionally, her path shows how a deep operating career, a personal reason to care about a sector and a network built over many years can come together into a clear fund thesis. Read more about her journey in our earlier case study on Karen Sheffield and Pachamama Ventures.
About Pachamama Ventures
Pachamama Ventures is a pre-seed and seed fund backing founders who build breakthrough materials, energy systems and industrial platforms for what it calls the Second Industrialization. Karen Sheffield founded the firm after 16 years of Fortune 100 operating experience, and Pachamama has publicly announced the final close of Fund I.
This article is for educational purposes only and isn't investment, legal or tax advice, or an offer to buy or sell any security.
If you're ready to build your own firm the way Karen did, apply to VC Lab and explore our programs for emerging VCs, LPs and future investors.