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Changing the VC Funding Landscape

- 54% Founders are Women of Color & 70% Women are First-Time Funders

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Germany, New Zealand, Taiwan, Iceland, Finland, Denmark —all countries led by women have fared better against coronavirus — and are just the latest example of the Athena Doctrine and 21st Century Leadership in action. In the startup world, studies have shown that women-led companies are more capital efficient, with 35% higher ROI and 10% more in cumulative revenue over a 5-year period. In addition, according to BCG, diverse management teams lead to better innovation and financial performance.

In spite of this, according to Pitchbook, deals with startups founded exclusively by women dropped from 7.1% in Q1 2019 to 4.3% in Q1 2020, and the median pre-money valuation for startups founded solely by women was $12 million, compared to $33.4 million for companies founded solely by men. In addition, over the last decade, only .06% of funding went to startups led by Black women.

Don’t Wait, Don’t Wait — Switch the Game!

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At a time of rising public protests against injustice and inequity and in spite of a lot of talk about diversity in Silicon Valley, according to Crunchbase, only 11% of venture partners in the US are women and an HBR article documents unconscious bias and How the VC Pitch Process Is Failing Female Entrepreneurs.

By 2043, America will be majority-minority with innovation and an economy driven by women and Black, Asian and Hispanic entrepreneurs. How Women Invest is not waiting for the system to change; instead, it is taking advantage of the funding gap for women founders and research showing that female-led startups perform better when financed by VC syndicates with female lead GPs.

Access, Access, Access — for Founders & Funders — Women of Color

There is no shortage of talented women founders, innovative women-led startups or accredited women investors. Switching the game is all about breaking barriers and providing access. According to How Women Invest General Partner Erika Cramer (a successful Latina VC), “unlike the first forays into Gender Lens Investing (GLI), How Women Invest is GLI 2.0 — providing not just investment, but access and connections via a comprehensive ecosystem”.

The How Women Invest Fund 1 gives women founders access to investment and offers accredited women funders access to venture investing and superior returns by leveraging the How Women Lead network of 13,000 senior women executives — entrepreneurs, technologists, industry experts, venture capitalists, investment bankers and lawyers — for robust deal flow, rigorous due diligence, operational support and both strategic and compassionate board support.

Unlike larger funds that must cap the number of LPs to 99 and require larger investments, the How Women Invest Fund 1 is capped at $10M to provide greater access and accommodate 249 LPs. The Fund rapidly raised $5M in pandemic times, when first-time funds hit a 7-year low and is on track to close $10M in the next quarter.

With minimum investments of $25k, the Fund has made venture investing accessible — over 70% of the 107 limited partners are first-time accredited investors; 90% are women and 54% are women of color. About 15% of limited partners in the fund are experienced venture capital and private equity professionals.

13,000 Strong Ecosystem of Accomplished Executives
— of Women, by Women, for Women

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Even before the official launch of How Women Invest Fund 1 and at a time when no face-to-face meetings are taking place, just by word-of-mouth, the network of 13,000 women with experience in big data, analytics, AI, AR/VR, blockchain, fintech, life sciences and other technologies, sourced over 60 deals and over 60% of these startups are led by highly educated, experienced and accomplished women of color.

During a pandemic that has shutdown the world and brought down first time financing to the lowest levels in 10 years, the Fund has refocused it’s investment criteria for a post-pandemic world by leveraging the network’s deep technical and savvy investment expertise to establish a transparent due diligence process and advanced conversations with a growing pipeline of women-led startups.

Accelerating the Athena Age

Change to the gender imbalance in Tech and Venture is taking way too long. Having one or two women around the table is not enough. Critical mass is key to creating a hospitable environment where women are not just present but fully empowered.

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How Women Lead CEO and How Women Invest General Partner Julie Castro Abrams actively supported the passage of SB826 (the historic California law requiring one woman on public boards by 2019 and two-three by 2021) and a portion of proceeds supports the mission of How Women Lead — preparation and placement of women on boards, education on venture investing and leadership development — accelerating the Athena Age, a feminine approach and 21st Century style of leadership.

I am privileged to be on the Executive Board of How Women Lead and a Founding LP of How Women Invest. Join us in changing the VC funding landscape for women-led startups!

. . .

A serial entrepreneur, Monica Pal has been co-founder, CEO, and CMO at B2B startups in cyber intelligence, enterprise security, and big data. She is a frequent speaker on cyber security, big data, entrepreneurship, diversity and leadership. Monica’s passion for women’s leadership and gender justice have led her to develop mentorship programs for women leaders in resilience building techniques practiced during a 15-year exploration of meditation and mindfulness. Monica is a Founding LP of How Women Invest and on the Executive Board of How Women Lead.

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Breaking Barriers, Raising Awareness

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