Announcing Fund II
Female Founders Fund launched four years ago in early 2014 as a NYC based seed-stage fund investing in the next generation of female founders building the exciting technology companies of tomorrow. As a female founder turned first time fund manager, I strongly believed that we were at a pivotal moment in time. More and more women were at the helm of high-growth companies like Stitch Fix, Rent the Runway and more. While there were still few examples of large venture-backed exits started by women, there were exciting macro level changes happening. Many women were working at large-scale tech companies like Google, Amazon & Facebook, helping these companies scale and developing the right skill-sets to build startups. Data was showing that diversity in management was imperative to overall success. And finally, there was an opportunity to take advantage of an investment area largely ignored by more traditional male venture capitalists.
When I launched the fund, female founders weren’t on magazine covers. Raising a fund to invest in female founders was relatively novel and certainly not easy. But thanks to a fantastic group of strategic LPs, Fund I launched with more than $5M under management. Over the last four years, strong female leadership has emerged from Fund I companies like Zola, ELOQUII, WayUp, Tala, Primary Kids, Maven Clinic, Rent the Runway and more. Many of these companies have gone on to become market leaders, building brands that are redefining success and setting new standards for their respective industries. As a first-time fund, we’ve had the incredible opportunity to participate in this new wave of talent coming out of NYC’s tech ecosystem and have a small part in helping these companies scale.
Fast forward to today, May 9, 2018. We are proud to announce Female Founders Fund II, a $27M institutional early-stage fund. With a 5X increase in fund size, we are incredibly excited to continue building and expanding on our thesis that it is possible to achieve outsized returns by investing in women, and to build the strongest ecosystem of female founders and investors worldwide. Our team has expanded to include Sutian Dong, our second partner who brings a wealth of experience from her days as an investor at FirstMark Capital, and a small but amazing team who have helped us scale operations. This fund has an incredible base of investors, both institutional and strategic, including Melinda Gates, Katrina Lake, Selina Tobaccowala, Hayley Barna, Whitney Wolfe Herd, Elizabeth Cutler, Jenny Fleiss, Linnea Roberts, Manuela Zoninsein, Howard Morgan, Josh Kopelman, Andy Dunn, Bill Helman, Barry Sternlicht, David Bonderman and more. We’re also proud to welcome our own portfolio company CEOs as investors in Fund II including the CEOs of Zola, Maven Clinic, BentoBox, Manicube, ELOQUII, LandIt, Tala and more. Their participation builds upon our vision of a larger community of female founders and operators.
Navigating the institutional investor landscape is not easy and we want to especially thank fellow GPs Patrick Chung, Nihal Mehta, and Kathleen Utecht who have been incredibly generous with introductions and advice. In addition, Nikki Quinn, Michael Romano and the Lightspeed team have been an incredible source of learning and support.
There is a long way to go in achieving parity in venture financing for women, but change is happening as exemplified by the results we’re seeing.
Since 2014, our 30 portfolio companies have not only reached millions of consumers, but also raised over $500M in venture funding from some of the most well-respected VCs in the industry, employing over 2,500 people.
With Fund II, the fund’s investment thesis remains focused on working with female founders at the seed-stage, leading or co-leading seed rounds. By investing early in a company’s life cycle, we like to play a meaningful role in the company’s growth through five key differentiated areas –
- Community: Connections to other founders and to the F3 Expert Network to explore partnerships, best practices and general business building advice.
- Hiring: A robust hiring system within our portfolio companies to address HR needs.
- Fundraising: Fundraising strategy support including pitch deck feedback, follow-on investor strategy, and syndicate building.
- Events: Over 40–50 events a year ranging from monthly CEO breakfasts, quarterly press dinners, office hours at Facebook & Instagram, and more.
- Press: Introductions to journalists at all top business and technology publications.
In the last four years, the breadth of companies started by female founders has expanded into exciting areas like fintech, digital health, VR, enterprise SaaS, marketplaces, real estate, social platforms and more. Often, these founders have recognized opportunities early that are unique to them as consumers and have built brands and businesses with this lens of consumer authenticity.
Looking forward to Fund II, we are excited about the following areas:
Alternative Communities: The decline of organized religion in the US has caused individuals, especially those of the Millennial and Gen Z population, to search for meaning and community in new ways. From SoulCycle to meditation, we have seen online and offline communities around secular beliefs gain incredible traction. Examples of this in the Fund II portfolio include Peanut, a mobile community for modern motherhood, Co — Star, a company building connections through algorithmically generated horoscopes, and Hip Sobriety, a digital community-based alternative to Alcoholics Anonymous.
Brands of Tomorrow: The beauty industry is ripe for disruption, as brands are eliminating middlemen and going direct to consumer by leveraging strong social media identities to build audiences and drive revenue. Millennials want brands that speak to them, and we have seen this affect the market with successes like Glossier. Examples of beauty and skincare companies in the Fund II portfolio include Winky Lux and Billie.
Fintech: We remain excited about the opportunities that exist to help younger audiences learn how to save and manage their personal finances. These companies are scratching an itch that the younger consumer identifies related to digital experiences that solve very specific problems in the financial sector from buying a home, to budgeting for families.
New Commerce Experiences: Consumers are drawn to commerce experiences that are multi-channel, and also have an authentic brand voice. Social influencers and celebrities are leveraging their organic followings to launch products that speak to a consumer who spends significant amounts of mobile browsing time on Instagram and Snapchat, and new platforms are being built to entertain consumers while she is shopping online.
The Confluence of Healthcare and Wellness: As early investors in Maven we understand the power of the female consumer in health care and the massive opportunity to disrupt the industry across products and services. Women want more — better fertility experiences, more personalized care — and we are excited to dig deeper into this space.
Finally, on a personal and professional level, we’ve never been more committed to building a brand that invests, supports and champions female founders. Over the last eighteen months, the venture industry has been rocked by case after case of sexual harassment. As the industry works to repair and re-examine the status quo of treatment towards female founders, this has resulted in many positive changes. Almost all of the largest venture funds have brought on their first female partners, and many of these women partners have been instrumental in leading their funds into investments run by female founders. As these companies continue to grow and demonstrate economic returns, we are confident that the industry will continue to shift and recognize the true potential of female founders. At Female Founders Fund, we are excited to support our female founders and in doing so, help lead this charge.
