There has been a recent shift in focus to identity in venture capital— how investors are paying more attention to the intangibles of what world they want to lead and what kind of people they want to raise money for. This is changing both the roles of founders and VC firms alike, and jumpstarting the emergence of more identity focused funds.
Specifically, female focused venture firms have recently been gaining traction. These firms focus on providing capital to female founders. Admittedly, there are less than 100 such funds in the United States, and together they hold less than one billion dollars for investing. However, in the context that female founded companies only recieved 2.7 percent of total venture capital funding in 2019, this is only the start to closing the gender gap.
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Here are a few venture firms that are paving the way for female entrepreneurs:
Built By Girls Ventures
Also known as BBG Ventures, this $10 million early stage fund began in 2014 and is run by Susan Lyne and Nisha Dua. Focused on female-founded consumer tech startups, BBG’s portfolio consists of companies such as Glamsquad and goTenna. The fund roots from AOL’s #BUILTBYGIRLS initiative, which is focused on empowering the next generation of female leaders in the technology world. This initiative extends far beyond BBG Ventures, and has actually created an inclusive community for women transitioning from school to the workplace. Their WAVE mentorship program connects students with working professionals in the technology industry. Members also have access to a community of other female and non-binary students, as well as the Built By Girls blog which shares advice for networking, internships, and jobs.
Bumble Fund
Stemming from the Bumble social networking app, Whitney Wolfe Herd started the Bumble Fund in 2018 as a way to further her mission of putting women at the center of her business. Herd began Bumble with the mission to empower women through making the first move and form meaningful, respectful, and new relationships. As a technology company focused on equality and headed by a female founder, Bumble Fund is led by the company’s chief operating officer, Sarah Jones Simmer, and Sarah Kunst. The fund invests in early-stage companies being led by underrepresented groups, with a primary focus on female founders. When Bumble Fund launched in 2018, it already had initial commitments with BeautyCon, CleoCapital, and Mahmee. Recently, they partnered with Black Girl Ventures, which places more specific focus on investing in Black or Brown woman entrepreneurs.
Halogen Ventures
Halogen Ventures is a Los Angeles based fund founded by Jesse Draper in 2016. After hosting “The Valley Girl Show,” Draper gained experience in working with early and later stage technology companies, which provided a strong background before starting Halogen. The firm invests in pre seed, seed, and series A consumer technology companies with females in the founding team. In the CEO’s own words, “female-led businesses represent a massive opportunity. With women making 80% of household purchasing decisions, we are betting on early stage female founded companies with billion dollar potential.” Halogen’s investment porfolio spans a variety of sectors — including fashion, health and wellness, social media, smart cities, interior design, and parenting technology.
Golden Seeds
As one of the first angel groups to invest exclusively in female-led start-ups, it has grown to become one of the biggest and well-known. They are one of the nation’s most active investment groups that look for companies wth high growth potential and long lasting impact. Golden Seeds also runs three venture funds which provide additonal capital, and has invested over $120 million in 170 companies since 2005. Some portfolio companies include Poshly and Cognition Therapeutics, however Golden Seeds’ portfolio spans across the consumer products, enterprise technologies, and healthcare sectors.
Female Founders Fund
Female Founders Fund is a seed stage venture fund that began in 2014 by a Anu Duggal. The fund makes early-stage investments exclusively in female-led B2B, consumer, healthcare, and fintech companies. Female Founders’ first fund raised $6 million and invested in over 30 companies. Their second fund of $27 million was backed by prominent investors like Melinda Gates and Jenny Fleiss. Since 2014, they have become a leading source of institutional capital for seed stage women entrepreneurs, with more than $3 billion in enterprise value. Billie, Zola, and Tala are some of the many notable portfolio companies that Female Founders have taken a stake in.
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Taking a deeper look into the funding that these women-led startups are recieving, there are evident emerging trends that show hopeful for the future. Geographically, some of the leading metropolitian areas for female entrepreneurial investments are San Francisco, Boston, and Denver. The chart below shows the top 25 areas of investment capital and number of deals between venture firms and female start-ups.
While there is still a way to go to close the gender gap within the venture capital industry, the data and evident emphasis on supporting female entrepreneurs continues to be optimistic. This landscape is changing rapidly, focusing more on identity. Venture capitalists are furthering the importance of identity within business and encouraging greater diversity.
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Sources:
https://www.inc.com/magazine/201810/kimberly-weisul/female-founders-funding-guide.html
