As I compose my first post, I wonder, does the world really need another blog about early stage investing? There are lots of good ones already from Jeff Clavier, Brad Feld, Bill Gurley, Dave McClure, Fred Wilson and many other men. Not too many by women, in part because there still aren't that many women angels or VCs.
Despite controlling 50% of our nation's wealth, women do less than 10% of early stage investing. I'm on a mission to change that. If just 20% of women's wealth, currently sitting on the sidelines, was allocated to early stage investing, it would be game-changing. There'd be a lot more capital available to bridge the "Valley of Death," and there'd be a wider access net to women-led startups, most of whom have a harder time raising capital by virtue of not being or knowing "good ol' boys." And as women investors gain experience and confidence in early stage investing, there'd be a lot more professional angels like me and a lot more women on company boards. And perhaps no need for my blog. But right now, it's a voice that needs to be heard.
I co-founded the Phenomenelle Angels Fund to serve a hugely underserved market: women-led tech startups in the Midwest. I also like fishing in productive waters other boats haven't found yet! There are so many favorable drivers for our fund: The Midwest has great research universities, a highly educated work force with an enviable work ethic and little sense of entitlement, a huge lack of local capital--even the best deals have little competition so valuations are reasonable--and the Midwest offers a much lower cost of doing business than the coasts. The other big trends Phenomenelle tap include the fact that an increasing number of women are graduating with science and business degrees, 3 out of 4 new businesses are started by women, women-led companies generally have a lower failure rate and are more capital efficient, and over the past 15 years, companies with women on the Board and/or on the C-level team have had better post-IPO performance.
I often wonder why more firms don't focus on these hugely underserved markets. Unfortunately, there are very few angel groups or VCs that focus on women-led firms and even fewer located in the Midwest. We at Phenomenelle consider our geographic niche and focus on women a major competitive advantage--both in generating deal flow and in differentiating ourselves for capital raising. When we interviewed various women entrepreneurs about the need for a fund focused on women, we got a unanimous YES. In fact they told us that they preferred to have women investors. All of our fund's LPs are successful women entrepreneurs or business execs or are organizations with a lead woman investor. We have significantly more deal flow than we can handle. Means we'll need to raise a bigger fund next time round!
I also invest personally and through my early stage advisory company, SCIO Corp. I'm in 30 companies so far, with of a goal of 100 early stage investments. This blog will share my perspectives, learnings and the occasional rant. I hope to start some good conversations.
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