Sarah Hinkfuss

Hinkfuss is from Wisconsin and grew up on the shores of Lake Michigan. She has described coming from a very politically active, public service–oriented family, and said that her family and the way she was raised gave her a very strong understanding of environmental justice and public service. She grew up sailing.⁠[1][1][2][2]

She earned a BA in Economics, Environmental Science & Public Policy from Harvard University, where she studied the intersection of economics and environmental engineering with a focus on water pricing. She recalled spending every summer in the Middle East working with the World Bank and different national governments on water pricing. She had planned to pursue a PhD in economics and then work at the World Bank, but became disillusioned with the distance between evidence and actual policy and turned to the private sector.⁠[3][1][1][1][1]

After graduating, she joined Applied Predictive Technologies (APT), an enterprise SaaS company that used experimentation to help large companies such as retailers, restaurants, hotel companies, and insurers measure the impact of new products, marketing programs, and operational changes, applying the same methodology she had used in her thesis research. She spent six years at APT; when the company was acquired by Mastercard in 2015, she was a Senior Vice President in Client Services, helping lead business engagements and sales and business development efforts.⁠[2][1][1][1][2]

During her last year at the company after the acquisition, she reflected on her direction, then moved to California to attend the Stanford Graduate School of Business, where she earned an MBA. In her first year there she worked with early-stage venture capitalist Aileen Lee and her team at Cowboy Ventures. She then moved into private equity with a growth fund at KKR for a couple of years; her first investment there was ForgeRock, a company offering identity and access management software.⁠[1][1][3][1][1][1][2][2]

In an interview recorded in April 2023, she said she had joined Bain Capital about three years earlier. At BCV she was particularly interested in backing founders with personal experience in the market they were creating, led the team’s efforts at the intersection of fintech and application software in the growth stage, and focused on themes including the future of work, compliance and insurance management, and vertical SaaS with embedded fintech.⁠[1][1][3][2][2]

In an article published by BCV, she wrote that generative AI tends to give the 90% answer while financial services demand 100% accuracy, which is why financial services had not been at the top of the list for generative AI companies. She argued, however, that it was a mistake for the two to write each other off: generative AI could be a critical ingredient in the way financial services are delivered and make humans 10 times more productive.⁠[2][4][4]

She appeared on the Capital Series of the MCJ podcast. BCV had not historically been a climate-focused investor but was increasingly paying attention to and getting active in the area, with her leading the effort. She said that climate was not going in the direction it needed to, and that at the same time BCV’s partners were interested in engaging in the space, but it took someone willing to raise their hand and put in the groundwork. She built bridges and got to know people in the field, brought the approach and framework BCV used in its other investment areas to climate, and worked to formalize BCV’s climate investing approach.⁠[1][1][1][1][1][1][1]

She published a guide for founders on board meeting decks at BCV. She advised starting preparation at least four weeks in advance, drawing most of the content from the dashboards the team already uses to run the business, and being candid about what is not going well. She wrote that the biggest red flag is anything hidden, missing, or omitted, and listed eight key sections that every board deck should include.⁠[2][5][5][5][5]

In her article “Gross Margin is a BS Metric,” she described the “gross margin myth”: the idea that the highest-quality apps companies are those with the highest gross margins. She wrote that this held for the SaaS companies of the past two decades but not for AI apps companies, whose low gross margins today are not indicative of their gross margins at scale and can even signal business strength, for structural, strategic, and financial reasons. She noted that, on top of costs such as hosting and customer support, AI apps companies bear the additional compute cost of model inference, but that these costs are declining.⁠[2][6][6][6][6][6][6]

Bain Capital Ventures: Official website: https://baincapitalventures.com/ (opens in a new window).⁠[3]

X: Public account: https://x.com/SarahHinkfuss (opens in a new window)⁠[2]